As I write this on January 20, 2021, Joseph R. Biden is being sworn in as our 46th president. Turning the page to the new administration will bring many changes to our society and our economy.
Predictions as to what these changes may be are fraught with peril. President Biden’s narrow majorities in both houses of Congress are insufficient to assure passage of some of his most ambitious legislative goals. Our nation continues to be victimized by the COVID pandemic, and until this is brought under control, other initiatives may have to take a temporary backseat.
But COVID notwithstanding, customer engagement executives must stake out plans to achieve their goals, and this process requires making reasonable assumptions about the future business environment.
Based on what is known and what can reasonably be conjectured, we cautiously present some thoughts on the potential impact on our industry.
Labor Policy
Marty Walsh, former mayor of Boston, is the new Secretary of Labor. Among other roles Mr. Walsh served prior to becoming mayor, he was president of the Laborers’ Union Local 223. He was elected secretary-treasurer and general agent of the Boston Metropolitan District Building Trades Council and ultimately named to lead the union in 2011. President Biden is a strong supporter of organized labor and pledges to submit legislation that makes it easier for workers to form a union and bargain collectively. Legislative actions will include protecting the Right to Organize Act, card check, and supporting union and bargaining rights for public service employees. A keystone pledge is to increase the federal minimum wage to $15 per hour. It is noteworthy that, as of May 2020, the median hourly wage for customer service representatives in the United States was $16.69 per hour with 35% earning $14 per hour or less.
We can also anticipate more generous sick and medical leave regulations. The Biden plan would reinstate the CARES Act paid sick and family leave benefits that expired at the end of December, and extend these benefits to workers employed at businesses with more than 500 employees and less than 50, as well as federal workers who were excluded from the original program. Under the Biden proposal, people who are sick or quarantining, or caring for a child whose school is closed, will receive 14 weeks of paid leave. The government will reimburse employers with fewer than 500 workers for the full cost of providing the leave.
Over the longer term, there will be pressure to revise the current Family Medical Leave Act which currently requires businesses with 50 or more employees to provide up to 12 weeks of unpaid medical leave for such purposes as welcoming a new child or carrying for a family member.
Additionally, we can anticipate legislation to harmonize the definition of a contingent worker. State laws vary in the way they define “independent contractor.” This lack of clarity has resulted in misclassifications, which enable employers to avoid providing benefits and overtime pay to individuals who are for all practical purposes acting as employees.
Consumer Rights
The new administration has ambitious goals for strengthening consumer protections. High on the list is reviving the previously comatose Consumer Financial Protection Bureau. Mr. Rohit Chopra has been appointed to head the CFPB. Chopra, an ally of Sen. Elizabeth Warren, previously served as a commissioner of the Federal Trade Commission and as assistant director of the Consumer Financial Protection Bureau.
We can also anticipate the revival of the Obama era “Consumer Privacy Bill of Rights.” Legislation that incorporates the core tenants of this proposal would confer, among other things, the following consumer rights:
- The right to exercise control over what personal data companies collect from them and how they use it.
- The right to easily understandable and accessible information about privacy and security practices.
- The right to expect that companies will collect, use and disclose personal data in ways that are consistent with the context in which consumers provide the data.
- The right to secure and responsible handling of personal data.
- The right to access and correct personal data in usable formats, in a manner that is appropriate to the sensitivity of the data and the risk of adverse consequences to consumers if the data is inaccurate.
These principles are not unlike legislated rights already incorporated in the European General Data Protection Act and the more recent California Consumer Privacy Act. There is considerable momentum for strengthening consumer privacy rights. The U.S. is alone among major nations having federally spelled out privacy rights for individuals, and this could well change under the new administration.
Additionally, the Biden administration is expected to propose legislation that would make it easier for individuals to secure credit. One proposal is to use a person’s cash flow to underwrite a loan as opposed to their credit score.
Finally, we can anticipate strengthening the Dodd-Frank era reforms that protect consumers from unfair, deceptive and predatory lending practices by financial institutions and provide greater access to credit financial services to a broader cross-section of Americans.
"People hoping to defer mortgage or credit card payments, collect unemployment, cancel airline flights or locate missing shopping orders are all running into unprecedented waits for customer service by phone." —WASHINGTON POST
Impacts on Contact Centers
Crush of contact traffic
In an article entitled, “Amid Pandemic, Perfect Storm for Customer Service Issues,” the Washington Post reports that: “People hoping to defer mortgage or credit card payments, collect unemployment, cancel airline flights or locate missing shopping orders are all running into unprecedented waits for customer service by phone.”
With so much going on, many organizations will become overwhelmed with calls and text messages from people seeking clarification on initiatives they read or heard about in the media. Banks and lending institutions will be most directly affected, but there will also be significant demands on healthcare institutions and state and federal social service agencies.
In an otherwise unpromising employment environment, the contact center space may shine like a bright beacon. With the COVID-19 economic impact hanging over us, there should be plenty of candidates for the new jobs that will be opening up. This will bring training challenges. The good news is that the administration pledges to provide skills training programs around digital, statistical and technology skills, which will be funded by the Labor Department.
Review salary schedules and time-off benefits
For many years, the median salary of customer service representatives has remained flat or moved up only a percentage point or two year-to-year. The CSR is your company’s voice to the public. How well that CSR performs can have a significant benefit for customer engagement and customer retention.
The CSR’s salary schedule should be commensurate with their contribution and now, with an anticipated increase in the federal minimum wage to $15 per hour (already in effect in some localities), there is added pressure to put some space between the median CSR salary and the minimum federal requirement.
Organizations should also review paid-time-off policies. The COVID pandemic has forced many otherwise reliable workers to take time off to care for loved ones and attend to medical care for themselves. This cannot always be anticipated and planned in advance. There will be legal and regulatory pressure to extend and liberalize paid-time-off benefits.