Customer contact organizations are being pushed by strong tailwinds yet are facing powerful headwinds.
Customers increasingly and understandably insist on top quality service for complex and/or high-touch matters that are moving centers to provide excellent engagements by staff. Yet many organizations are experiencing challenges in attracting and retaining those employees.
To understand the staffing issues in the New Normal and provide insights we reached out to several thought leaders. They are: Molly Clark, Senior Director, Training, The Northridge Group, Brent Holland, Founder and CEO, Intelliante, and Mark Pereira, Trainer and On-Site Supervisor, Briljent.
Q. What are the top trends in contact center recruiting and retention and what are their drivers?
Brent Holland: First, centers are moving towards skills-based hiring. Frontline agent skills will separate industry leaders from the pack as consumers demand more high-quality, individualized encounters.
One negative service encounter is often enough to drive customers to competitors, reports Sitel. According to Accenture, 52% of U.S. consumers switched service providers because of subpar customer service, costing $1.6 trillion.
Identifying applicants with the right skills and capabilities to thrive in contact centers may be the most critical investment companies will make over the next 18 – 36 months.
Second, labor shortages pressure recruiters to fill training classes, and they’ve adapted by lowering standards and offering incentives.
Full training classes create the illusion that recruiting hacks create value, such as downplaying critical capabilities during the hiring process. However, these quick fix approaches almost always cause unintended consequences, including higher attrition and poorer customer experiences (CXs).
Third, contact centers are moving away from asynchronous video interviews, especially artificial intelligence (AI)-driven solutions.
“...unqualified applicants are getting jobs, creating myriad HR-related issues.”
—Brent Holland
Video interviewing disrupted the recruiting industry. The ability to automate interviewing captured the imaginations of recruiters around the world. The problem is that applicants don’t enjoy being interviewed by a computer, making them likelier to abandon the process.
One emerging issue is that companies are increasingly concerned about candidate fraud. Now, a new breed of startups promises to help applicants complete (and pass) pre-hire assessments for a fee. The result is that unqualified applicants are getting jobs, creating myriad HR-related issues.
Mark Pereira: The contact center industry is constantly evolving and changing, as are the trends in recruiting and retaining contact center employees. Here are some of the top trends in contact center recruiting and retention and their drivers:
1. Move to remote work.
The COVID-19 pandemic has forced many businesses to re-think their office space requirements, and the contact center industry is no exception.
More and more contact centers are moving to a remote work model, which has several benefits.
First, it allows businesses to tap into a larger talent pool, as employees can work from anywhere in the world. Second, it reduces overhead costs associated with maintaining a physical office space. And third, it can improve employee satisfaction and retention, as employees can enjoy a better work-life balance.
2. AI use.
Contact centers increasingly use AI to help with various tasks, from customer service to sales and marketing.
AI can assist businesses automate repetitive and low-value tasks, freeing employees to focus on more complex and value-added tasks. AI can also help companies to improve the CX by providing more personalized and human-like interactions.
Then again, with call centers struggling to attract qualified talent, the implementation of automation and AI can help meet customer demands. But I must stress that not all automation tools are created equally, and AI must be adequately trained with quality data, as well as selecting an AI algorithm that will help train and improve processes.
3. Employee engagement focus.
Employee engagement has always been critical in the contact center industry, but it is becoming even more critical as the war for talent intensifies.
Businesses are increasingly focused on creating a positive work environment and culture to attract and retain the best employees. This is being driven by several factors, including the move to remote work, the use of AI, and the need to provide a more personalized and human-like CX.
As I write this to you, I have a trainee whose inbox is flooded with job offers. It almost seems like an agent's market.
Businesses realize that it is often more cost-effective to keep existing employees than to constantly recruit and train new ones. As a result, many companies are investing in employee retention initiatives such as training and development programs, employee assistance programs, and flexible work arrangements.
4. Need for skilled agents.
The need for skilled agents is also changing with the ever-changing landscape of the contact center industry.
As new technologies are introduced, and new challenges arise, contact centers need agents who can quickly adapt and learn new skills. This trend is driven by the need to improve customer satisfaction and the bottom line.
Q. Has the recruiting and retention picture changed over the course of 2022 going into 2023 and if so, how and why?
Molly Clark: The contact center recruiting and retention picture has absolutely changed over the course of 2022.
Customer service providers in all industries are struggling to fill employment vacancies and are facing increased competition for resources. Job satisfaction levels in contact centers are low and agents are reporting that contact center jobs are more stressful than ever.
“Most potential recruits today have multiple options and can afford to be selective...”
—Molly Clark
The Great Resignation hit many contact centers hard. In addition to recruiting difficulties, our clients are seeing employee retention rates drop drastically, especially among new hires.
Those companies that require associates to be in the office full-time are seeing even greater attrition because those that are willing to offer remote work are also hiring and are considered more desirable.
Most potential recruits today have multiple options and can afford to be selective when it comes to choosing a company. Overwhelmingly, they are looking for fair compensation, flexible hours, and development opportunities.
We advise our clients that, to remain competitive in the market for high-potential employees, companies must offer remote or hybrid positions and provide employees flexibility, training and development, career progression opportunities, and competitive pay.
Brent Holland: Two developments will affect the recruiting landscape as we move into 2023.
First, AI technologies are facing increasing regulatory and legislative headwinds. All too often, algorithms create bias and discrimination. Consequently, the executive branch, federal agencies, and state and local governments are working to protect applicants and employees.
Second, capacity planning is one of the most challenging issues for recruiters over the next 12 months. Capacity planning describes what a center must spend on resources to reach its goals.
Labor shortages have made it especially difficult for contact centers to project future attrition and recruitment, further complicating capacity planning.
Mark Pereira: Here is my list of top 10 call center recruiting and retention trends for 2022 into 2023:
1. Increased use of video interviewing.
Video interviewing has been rising recently and is only expected to become more prevalent in the coming years. Call centers are increasingly using video interviewing to screen applicants, which is a more efficient and cost-effective way to identify qualified candidates.
2. Increased application of AI.
AI is increasingly used in the recruiting process, from sourcing and screening candidates to conducting interviews. AI can help identify candidates who are a good fit for a position and can also help assess their fit for a particular call center.
3. Big data.
Big data is becoming increasingly important in recruiting. Call centers use data to identify trends and patterns in the hiring process and predict future needs. Big data can also help assess the performance of call center employees and identify areas for improvement.
4. Social media.
Social media plays an increasingly important role in recruiting. Call centers are using it to connect with potential candidates and to promote open positions. Social media can also screen candidates and assess their fit for a particular call center.
5. Mobile recruiting.
Mobile recruiting is rising as more people use their smartphones and tablets to search for jobs. Call centers are taking advantage of this trend by developing mobile-friendly careers websites and apps.
6. Employee referrals.
An essential source of candidates for call centers. Call centers are offering incentives to employees who refer qualified candidates, and many are also using social media to promote open positions to their employees’ networks.
7. Niche job boards.
Niche job boards are becoming increasingly popular for finding call center candidates. These job boards allow call centers to target a specific audience of candidates, saving time and money in recruiting.
8. College recruiting.
Call centers are increasingly recruiting candidates from college campuses. College job fairs and on-campus recruiting events are becoming more common, and many call centers are working with college career centers to promote open positions.
9. International recruiting.
As the global economy grows, call centers are increasingly recruiting candidates from other countries. Call centers are looking for candidates fluent in multiple languages and with experience working in a global environment.
10. Diverse candidates.
Call centers are increasingly focused on recruiting a diverse workforce. They are looking for candidates of all backgrounds and experiences, and many are consciously trying to diversify their workforces.
As the competition for talent intensifies, companies are increasingly focused on retaining their best employees. To retain top talent, companies must offer competitive salaries and benefits and create an attractive work environment that takes care of the whole person.
Is Recruitment and Assessment Too Inflexible?
Concerns have been raised about staffing recruitment and assessment solutions and processes being too inflexible i.e., on qualifications, experience levels, education, certifications, and not accounting for candidates’ potential: which denies opportunities for candidates and employers alike.
Is this true and if so, how can they be fixed?
Brent Holland had this response:
“Unfortunately, most people-related decisions are wrong or lucky because companies unintentionally depend on guesswork, gut instinct, or inaccurate data.
“Well-informed, fair people-related decisions demand companies document job requirements accurately and thoroughly. The Uniform Guidelines on Employee Selection Procedures (1978), the U.S. government’s standards on testing and hiring, emphasizes the value of describing observable work behaviors (i.e., seen, heard, or perceived), tasks, work products, and their criticality or importance.
“Most contact centers use job descriptions to specify essential duties and requirements. The process companies follow to identify tasks and knowledge, skills, abilities, and other characteristics (KSAOs) often lack the rigor necessary to match people with jobs accurately.
“Misspecifying job requirements can create legal and financial consequences.
“Contact center jobs commonly require a high school diploma or the equivalent. These types of minimum qualifications imply that the only reasonable way for applicants to possess one or more essential KSAOs is by achieving an educational standard. Contact centers may struggle to justify high school equivalency requirements for many frontline jobs, which can lead to legal liabilities.
“In Griggs v. Duke Power Co. [401 US 424 (1971)], the U.S. Supreme Court ruled that requiring a high school diploma was discriminatory. The educational requirement (1) caused a disparate impact on African-Americans due to lower graduation rates in the relevant geographical area and (2) was not job-related and consistent with business necessity.
“Recruiting teams usually align sourcing strategies with the job. However, when job requirements are misspecified, the applicant pool is less likely to possess critical KSAOs. It’s a scenario that creates pressure on pre-employment tests and interviews to identify the most qualified applicants.
“With as many as 81% of new hires failing, most talent assessments and interviews are not solving the problem, causing centers to struggle with the cost of high attrition and poor performance.”
Q. Work-from-home (WFH) has been touted as a means to attract and retain staff by broadening labor pools and reducing commuting. But has it or do you expect it to deliver on those benefits?
Molly Clark: WFH is absolutely an important incentive that helps attract talent into the contact center. It has become exceedingly difficult to hire agents to work in an office five days per week because they can so easily find contact center positions that don’t require it.
While some contact center managers were initially concerned about how WFH would affect agent performance, the reality is that, in most cases, performance has not been impacted and the concerns have not been warranted.
In response to a survey we recently conducted, 47% of respondents reported they had knowingly spoken to a customer service associate who was at home and 72% of those respondents reported that it did not impact the resolution of their issue.
The ability to WFH creates a new benefit for the contact center agent role and attracts new talent. It broadens the labor pool by opening opportunities to those who live further from the contact center facility, those who don’t have reliable transportation, and those who don’t wish to commute for a variety of reasons.
However, in my experience, the greater flexibility that WFH produces and the more casual environment that it establishes, do make it necessary for contact center leaders to ensure there is a consistent process in place for both agent development and inspection.
Contact center supervisors must have the skills and the time needed to support and develop their teams in a remote capacity. Accurate inspection, reporting, and dashboarding have become critical to the process. Supervisors can no longer walk the floor to get a sense of activity, so they must be able to leverage reliable data sources of truth to monitor activity in a virtual environment.
Brent Holland: The contact center industry benefitted from an early-mover advantage in WFH. Between 2010 and 2020, data suggested that WFH agents often possessed better skills than brick-and-mortar employees because a higher WFH applicant-to-hire ratio allowed companies to be more selective.
“The contact center industry must find a way to balance business needs and worker privacy.” —Brent Holland
The extent to which WFH will affect attraction and retention will depend on the following three issues.
First, the competition for WFH workers is more intense in a post-pandemic world. Contact centers must create and deliver value that appeals to job applicants, including work-life balance, schedule flexibility, professional development, and opportunities for upward mobility.
Second, the contact center industry is receiving unwelcome publicity as companies implement monitoring technologies that infringe on employee privacy.
The contact center industry must find a way to balance business needs and worker privacy. Otherwise, it risks alienating itself from the most qualified workers.
Finally, WFH is not permanent everywhere. Many centers in Asia, for example, are demanding workers return to the office. Similarly, in Europe, many workers do not have space amenable to WFH, so many contact centers encourage employees to return to the office.
Gig Working and Nearshoring/Offshoring
Gig workers and nearshoring/offshoring have been promoted as contact center staffing answers. But are they? Can these agents meet customers’ expectations for superb service?
Brent Holland: Gig workers may be the answer, but it depends on the question.
If the question is how to create staff flexibility, then gig workers represent a viable alternative. Many companies (e.g., Amazon, 1-800-Flowers, and Intuit) hire gig workers for seasonal work with some success.
But suppose the question is how to create personalized CXs that let a company stand out. In that case, data on gig work are unclear.
Mark Pereira: There are upsides to both approaches. For gig workers, the main advantage is flexibility. They can often work from anywhere, which can be a great perk for employees. And for nearshoring/offshoring, the main benefit is cost savings.
However, there are a few potential downsides to both approaches. The main disadvantages for gig workers is that they are often not as reliable as full-time employees. Also, whether or not they are held to the same quality standard (in terms of call quality, rules, and regulations) as the company’s full-time agents.
As for nearshoring/offshoring, the main disadvantage is that the quality of service can sometimes suffer due to a lack of proper accent training and training agents on the company’s products and services.
I have a few friends in India and the Philippines that work for call centers. They usually ask me what a Social Security Number (SSN) is and why American callers are so sensitive when we ask them for it for account verification purposes. Most of these friends also have to deal with irate callers who have difficulty understanding their accents and why American jobs are being taken offshore.
So, ultimately, it’s up to each business to decide whether gig workers or nearshoring/offshoring are right for them. There is no one-size-fits-all answer.
Mark Pereira: A recent study by McKinsey found that 42% of American workers would like to WFH at least once. And it’s not just employees interested in WFH arrangements – a full 84% of employers say they would offer some form of WFH if they could.
There are plenty of good reasons for the growing interest in WFH. For employers, WFH can reduce office costs and increase productivity. For employees it can improve work-life balance and reduce commuting costs and time.
“WFH broadens the labor pool that a company can draw from.”
—Mark Pereira
But WFH is not a panacea. Some challenges come with WFH arrangements, both for employers and employees.
For employers, from what I’ve seen, the biggest challenge with WFH is managing remote workers. Without the ability to see what employees are doing, it can be challenging to ensure they are productive.
For employees, the biggest challenge with WFH is managing their own time. Without the structure of an office environment, agents may get distracted by household chores or personal errands.
There are also chances that agents may feel isolated and lonely without the social interaction that comes with an office environment. To circumvent this, I like to engage my team members on at least a weekly basis. Sometimes, it’s as simple as checking in to see if they have any questions or need my help on a particular request.
Despite the challenges, there is a strong belief that WFH is here to stay. The benefits of WFH are too great to ignore. With the proper management and support, these arrangements can be a win-win for employers and employees.
WFH broadens the labor pool that a company can draw from. Rather than being limited to local talent, companies can now hire the best agents from anywhere. It is especially beneficial for companies in areas with a limited pool of qualified candidates.
Q. What are your recommendations to contact centers to ensure they have the staff they need?
Molly Clark: Remote work has become a big draw for high-performing talent. Going forward, remote or hybrid options will be expected, and companies will have to provide them in order to hire and retain talent and remain competitive.
We are already finding that job postings must include mentions of remote or hybrid work options to attract the attention of top talent.
Many large companies have already decided to give all employees the option to WFH permanently. This precedent, combined with employee expectations, puts pressure on all contact centers for both hiring and retention. Those that don’t offer either remote or hybrid opportunities will be at a severe competitive disadvantage moving forward.
The key to retaining employees is to focus on development and provide growth opportunities. To do this, contact center leaders should be strategic about ensuring that supervisors and managers can build time into their schedules to develop their teams.
By focusing on metrics that measure development, coaching, and improvement, leaders can incentivize supervisors and managers to focus on developing and training their teams, which will ultimately lead to improved retention.
Brent Holland: First, contact centers should verify job requirements’ accuracy to remove misalignment. Contact centers should partner with a reputable company to document agent jobs’ tasks, KSAOs (knowledge, skills, abilities, and other characteristics), and context.
Second, verify the center’s recruiting strategy aligns well with each job’s requirements. The sourcing strategy must target people most likely to possess the critical KSAOs. The center must prioritize candidate quality over volume.
Third, hold pre-employment testing and interviewing companies accountable for results. Demand proof that pre-employment tests and interviews are fair and predict success (retention and performance) in your center.
There is a lot of misinformation and pseudoscience in the market today, so it’s a good idea to work with an external consultant to verify your provider’s claims. The Society of Industrial and Organizational Psychology offers a locator to help you find a reputable consultant.
Fourth, invest in hiring and developing frontline supervisors. The supervisor job, unfortunately, tends to be an afterthought. Still, it may be the most critical role in the center in terms of improving retention and performance.
Finally, centers should create a more robust capacity plan to align the workload with the workforce.
Mark Pereira:
1. Hire the right people with people skills.
This may seem obvious but hiring people who are a good fit for the job is essential. Contact center work can be challenging, so it’s vital to find patient people who are good communicators and have a positive attitude.
2. Train your staff thoroughly.
It’s essential to train your personnel on the systems and procedures they’ll use. But teaching them to deal with difficult customer situations is also necessary. Role-playing exercises can be helpful for this.
Please provide your staff with opportunities to upskill and provide the required encouragement when someone is apprehensive, thereby helping them become more effective at their jobs and help boost morale.
3. Give your staff the tools they need.
Ensure that your employees have access to the resources needed, whether that’s a reference manual, a knowledge base, or an expert to contact when they need help or all three, which is the best approach.
4. Set clear expectations.
Your staff should know their expectations. Set targets for performance and give feedback regularly.
5. Please show your appreciation.
Let your staff know that you appreciate their hard work. Recognize agent achievements and give them opportunities to grow and develop in their careers.
6. Utilize technology.
Several technologies can help you to manage your contact center more efficiently. ACD systems can help route calls to the right agent, while call monitoring and recording can help with quality control. Chatbots and AI assistants assist callers with simple inquiries. Automate mundane processes to increase agent efficiency.
BLS: Slowing Employment Growth, Fewer Customer Service Positions
The signposts are there that the U.S. economy is maturing from the population and labor force trends and projections.
The U.S. Bureau of Labor Statistics (BLS) released in September 2022 its employment projections from 2021 to 2031. Amongst the data points:
- Total employment is projected to grow from 158.1 million in 2021 to 166.5 million: a 0.5% annual increase, but half the rate recorded from 2011 to 2021.
- The civilian labor force is expected to increase by 7.7 million, from 161.2 million in 2021 to 168.9 million in 2031: a 0.5% annual increase that would be the same as from 2011 to 2021 but slower than the rate in the years before 2011.
- The labor force participation (LFP) rate is projected to fall from 61.7% in 2021 to 60.1% in 2031.
- Labor productivity is projected to accelerate to 2.2% annually—within its long-term historic range—but is significantly higher from 1.3% annual productivity growth in the prior decade.
- Real Gross Domestic Product (GDP) is projected to grow 2.1% annually, slightly higher than that of the previous two decades.
Undergirding the slowing employment and labor force growth is a declining population increase. The civilian noninstitutional population is projected to grow by 19.6 million to 281 million by 2031: a 0.7% annual growth rate that is a slowdown from the 0.9% rate recorded between 2011 and 2021. The BLS ascribed the population changes to declining fertility rates and decreased immigration.
For the falling LFP rate the BLS pointed to an aging population behind the falling LFP rate, but it also said that workers ages 55+ are projected to stay in the workforce longer.
“While population growth has been slowing for several decades, the projected 0.7 percent annual growth represents one of the slowest growth rates in the data series’ history,” said the BLS. “Slower projected growth in the population is expected to constrain growth in the civilian labor force over the projections period.”
The BLS in September 2022 also projected a -4% decrease in the number of customer service positions from 2021 to 2031, from 2,898,900 to 2,793,600. While it expects 389,400 openings each year on average: these will all be for replacement workers for those moving to other occupations or leaving the labor force like through retirement.
At the same time, could automation also have an impact on contact center employment? Could it accelerate in view of smaller labor pools and rising costs?
The BLS reported in July 2022 in its Monthly Labor Review that automation has displaced but also augmented many customer service and telemarketing positions. It pointed out that the number of customer service jobs had grown by 32% from 2008 to 2018, even as many positions were offshored.
The BLS noted that “some see these jobs as vulnerable to replacement as artificial intelligence improves while others view customer service jobs as less amenable to automation because customer queries make tasks unpredictable.”
Meanwhile, digital marketing, rather than AI, threatens telemarketing jobs.
“Telemarketing jobs are anticipated to fall 14.2 percent over 2019–29, which may be optimistic given previous declines of 51 percent (2008–18) and 37 percent (1999–2009), which projections research attributed mostly to the increased use of ‘do not call’ registries and caller ID functions on telephones, rather than automation,” said the BLS.
Here are the comments on these developments and projections from our thought leaders.
Molly Clark:
From my experience, I think any decline in customer service positions will be minimal despite smaller labor pools and rising costs.
While automation is replacing certain contact center agent functions, it is not replacing the need for agents entirely.
Agents are now being expected to take on more expert roles and deal with more complex customer interactions than ever before, so there will continue to be a need for highly skilled agents in the foreseeable future.
Automation in the contact center space tends to be most useful for solving easy, straightforward questions that don’t require skilled responses.
This means that the more complex issues that cannot be answered through automation will continue to fall to agents. When a customer reaches out to an agent, it is almost always for a next-step escalation. As a result, the need to retain strong, knowledgeable agents will continue to increase.
With agents fielding more complex issues, agent knowledge and tenure have become more important than ever before. Customer frustration can quickly escalate when agents cannot resolve their problems efficiently.
“While automation is replacing certain contact center agent functions, it is not replacing the need for agents entirely.” —Molly Clark
To ensure that agents are ready for more complex customer interactions than they’ve handled in the past, contact centers should invest in appropriate knowledge management systems. And in training their agents to effectively address whatever issues customers call about and accurately troubleshoot problems to get them resolved.
Brent Holland:
The BLS forecast illustrates the headwinds contact centers will face in sourcing talent over the next decade. The data have three implications for contact centers.
“...labor shortages will drive technological innovation in ways that allow workers to be more productive.”
—Brent Holland
First, contact centers must make a concerted effort to improve retention. According to our recent paper, attrition costs are far higher than most centers realize, incentivizing investment in recruiting and onboarding programs for frontline agents and supervisors.
Second, contact centers historically targeted workers aged 18 – 34. Centers will need to examine ways to configure the workplace to cater to older workers to keep pace with growth.
Finally, labor shortages will drive technological innovation in ways that allow workers to be more productive. However, centers must ensure these technologies do not unintentionally alienate consumers who crave more human interaction.
As to the projected customer service position decrease, widespread product and service commoditization is forcing companies to find new ways to distinguish themselves through more personalized CXs.
Automation will continue to accelerate, evolve, and improve, but it’s unlikely to replace personalized human interaction in the near term. According to Accenture 83% of U.S. consumers prefer interacting with humans over digital exchanges. More than 80% of people also said that live customer service would impact their decision to churn.
AI will eventually reach the point where consumers cannot recognize the difference between humans and bots.
Companies like IBM and Servion have predicted that AI will handle most customer interactions for years. Although AI and bots have become more common, most consumers are not ready to exchange people for computers.
The most likely outcome over the next few years is a hybrid model. Companies will emphasize more personalized, on-demand CXs while using AI to help agents manage the engagements more quickly and efficiently. AI and bots will continue to handle simple administrative functions.