When there are critical matters at hand - in this case ensuring the right numbers of quality contact center agents in order to retain and attract customers within budgets - it is natural to try and find out what the future portends.
But it is important to remember that when one does such crystal ball gazing what they are seeing reflects what they already know or suspect.
And while there are always unforeseen events – like the world-upending COVID-19 pandemic that struck in 2020 – in all too many cases the portents (and warnings) were there. And all too often they were unheeded, mostly because of the need to manage everyday challenges (like meeting service levels).
But the fates foreseen are not always sealed. Employing fresh ways of thinking and employing new technologies - like those driven by artificial intelligence (AI) - could help change the outcomes in a positive direction.
As we reach the midpoint of this tumultuous decade, we reached out to leading contact center staffing and retention seers for their reflections and insights.
They are:
- Mark Pereira, Trainer and On-Site Manager
- Stephane Rivard, Co-Founder and CEO, HiringBranch
- Petra Seals, Managing Principal, The Northridge Group
Q. What are the challenges but also the opportunities that you are seeing in contact center employee (agent, but also supervisor and manager) staffing, assessment, and retention going forward?
Mark Pereira:
Here are the challenges we face:
Turnover and its Costs
Call and contact centers have historically struggled with high turnover rates, particularly among younger generations who often view these roles as transitional. Industry averages show turnover rates of 30 to 45% (Nextiva). This continuous cycle of employees leaving leads to increased costs in recruitment, training, and upskilling new agents to replace those who have left.
Skill Mismatch
In our pursuit of innovative technologies that enhance efficiency, we face the costs of purchasing or developing these tools and the challenge of training employees to use them effectively.
Remote Work Issues
Post-pandemic, hybrid and remote work have become the norm. Many candidates now express enthusiasm when they learn that a role offers remote or hybrid options. However, a company lacking the right tools or experience to manage remote teams can lead to difficulties in maintaining team cohesion, company culture, and consistent performance oversight.
There is a silver lining though, which is a wider talent pool. The ability to hire across cities, counties, states, and even national borders has made filling roles easier, offering access to a broader and often higher-quality candidate pool. Roles are usually filled without the need for extensive advertising.
However, with the high demand for remote positions, it’s crucial to structure selection questions carefully to filter out unqualified candidates.
Developing Existing Talent
While employees may leave for various reasons, trying to convince them to stay through incentives or pressure isn’t a sustainable strategy. Instead, by offering clear career paths and investing in their growth through mentoring and training - things employees value - companies can reduce turnover and retain top talent.
AI in Recruitment and Training
From creating job postings and distributing them across job boards to summarizing resumes and automating communication, AI can streamline the hiring process. It can also enhance training by simplifying technical documents or personalizing training pathways, ultimately reducing the time to proficiency for new hires.
Though AI can do all these marvelous things, it’s not a Cinderella fairy godmother, and you will need to rely on a subject matter expert to verify its accuracy.
Stephane Rivard:
Contact centers continue to struggle with perennial challenges like turnover and attrition. Skills-based hiring technology, like soft skills assessment, presents an opportunity to face these problems head-on during the hiring process.
Contact centers that hired for the right soft skills saw at least a 10% improvement in retention rates, a 400% reduction in bad-hire rates, and a dramatic decrease in attrition rates by role (for every 1 top-skilled customer service employee hired, 27.3 bottom-skilled employees attrited).
These contact centers were able to improve top and bottom hiring funnel metrics, from staffing all the way to retention metrics: creating that essential - but often missing - link between hiring practices and business outcomes.
Petra Seals:
Contact centers are starting to see the generational differences in this new workforce, which is younger and has very different expectations from a work perspective.
Companies will not be able to keep employees around for 20 years, no matter how good the plan for career pathing. The newer generation of employees is staying in a contact center role on average for two to four years, so from a retention standpoint it’s not about encouraging them to stay forever, rather how can we get the most value out of the people while they are with us?
The focus in contact centers is shifting toward the employee experience. However, it also needs to include strategies for how to get employees up to speed, creating value faster. The job market is changing and rapidly moving, so we need to be focused on how we maximize the short-term contribution through more effective training and onboarding.
For supervisors and managers, it becomes a question of performance management and how effective you can be in coaching agents to the next level faster. We are seeing the emergence of some tremendous technologies that can drive significant efficiency and performance improvements in those supervisor/manager conversations.
The companies we work with that roll out coaching frameworks and emphasize training their supervisors to be better coaches are not only seeing great improvements in the customer experience (CX) but also in employee engagement and retention. So, despite the challenge of generational differences, we have seen that there are ways to create significant improvements in retention.
Q. What permanent changes, if any, have you seen in staffing and retention arising from the COVID-19 pandemic but also from other crises and major issues?
Mark Pereira:
Shift to Remote and Hybrid Work
The biggest change has been the increasing move towards remote and hybrid work, supported by the growing shift to cloud-based call and contact centers, allowing agents to work from anywhere.
Incorporation of AI and Automation
Businesses are integrating AI and automation into various operations, such as AI-powered chatbots, predictive analytics, and virtual assistants. However, concerns about data security, including growing data leaks and the evolving role of AI in business, continue to create uncertainty.
Holistic Employee Benefits
Companies are focusing on offering comprehensive benefits that support employees’ wellbeing. As agents prioritize work-life balance and mental health, providing mental health benefits is a no-brainer, especially given the high-stress nature of the work.
Diversification of Contact Channels
Diversification of contact channels is making customer service more convenient and efficient. Omnichannel applications allow customers to engage through various platforms while enabling businesses to track and manage all communications seamlessly.
“...providing mental health benefits is a no-brainer, especially given the high-stress nature of the work.” —Mark Pereira
Emphasis on Agent Training and Support
Training is now focused not only on product and service knowledge but also on developing soft skills. Companies are looking at ways to improve the agent experience with tools like chatbots, knowledge management systems (KMS), and coaching, which in turn enhances the CX.
Stephane Rivard:
500 contact centers were surveyed in North America during the COVID-19 pandemic and they predicted at least 60% of employees want to continue to work remote/hybrid. That’s a stark contrast to a recent survey of U.K. call centers where only 11% of employees are actually continuing to work from home today (although 66% benefit from a hybrid model).
Meanwhile, return-to-office orders and policies are coming into effect across all major sectors. These shifts have left contact centers with no choice but to accommodate hiring, training, and managing employees both in the office and remotely.
Candidates and employees both virtually and in-person of contact centers and other businesses are caught in between [these trends], although it’s hard to go back to the way things were.
I was talking to John Hussey, the CEO of System Requirements Lab, and he said he’s seeing this hesitation from both applicants and companies about going back to the office. His clients are saying that in addition to cost savings they benefit from a broader hiring pool when hiring remotely.
This is absolutely critical given the ongoing global talent shortage that has also emerged in recent years. McKinsey believes that a shift to skills-based hiring techniques could be the key to filling technical roles through the labor shortage. But what about customer-facing roles?
The most shocking all-encompassing example of permanent change stemming from the pandemic came from Fundraising Direct, a U.K.-based contact center that hires outbound sales agents to solicit donations for non-profit organizations.
They used to bring applicants into the contact center for group interviews, but when the pandemic hit, they switched to using a skills-based hiring platform that evaluates candidate skills virtually using Conversational AI.
“His [John Hussey's] clients are saying...they benefit from a broader hiring pool when hiring remotely.” —Stephane Rivard
Because the recommendations proved to be so accurate, this contact center stopped interviewing candidates altogether! Candidates are given the skills assessment and if they pass they go straight through to training.
The pandemic effectively revamped their entire hiring process to one that is virtual and skills-based, and they’re getting better-skilled candidates in the process who are staying longer and selling more.
Petra Seals:
What a difference a year makes! Last year, the discussion here was still squarely focused on remote and even hybrid work being a permanent change.
Since then, more and more companies are rolling back the remote and hybrid work policies that we thought would be permanent. This is widening the gap between employees’ expectations and where companies are, and it is a growing chasm that we must figure out how to bridge.
The one true change that has remained lies in companies focusing on developing a true culture versus accepting a more superficial culture.
Companies have moved away from what used to be contact center standard fare: pizza parties, balloons, and decorations. What is replacing those things is a concerted effort to engage employees through leadership and coaching, a focus on employee mental health and wellness, and a determination to make the job easier through the use of AI and other tools.
“The one true change that has remained lies in companies focusing on developing a true culture versus accepting a more superficial culture.” —Petra Seals
The employee experience is now a stated goal in almost all of our contact center conversations. Leaders are aiming to create a strong and enduring culture through these initiatives that serve as a way to retain and recruit employees.
Do People Want to Work for Contact Centers?
The other side of the coin of contact center staffing and retention is whether individuals want to be employed by them.
Traditionally, contact center work has often been regarded by many prospective employees as a better-than-being unemployed/steadier, indoor, but stressful (and often with unsociable hours), minimal-advancement, and low-paid employment option.
Accordingly, site selection professionals have long targeted high unemployment/low-wage communities with sufficiently large labor pools to offset high turnover, and preferably those with governments offering public money-funded incentives for contact centers.
But is this attitude by prospective agents changing? So, we asked “Are workforces becoming more or less interested in working for contact centers and why? Are fewer or more new agents leaving after experiencing what the jobs entail?”
Mark Pereira:
“Many individuals are attracted to call and contact centers for the opportunity to work remotely or in hybrid roles.
“However, the nature of the work, the organizational culture, the agent’s level of experience, the center’s leadership, the quality of training, and the level of floor support can all contribute to a work experience that ranges from smooth sailing to tolerable angst. Or even to the point where an agent dreads hitting the login button at the start of the day: leading to an agent leaving.
“It’s important to remember that agents are highly attuned to factors like hourly wages, company benefits, appreciation, the significance of their role, job security, and opportunities for growth within the organization.
“Additionally, with the increased use of artificial intelligence (AI) chatbots, virtual assistants, and enhanced company websites, agents are left to handle more complex and challenging inquiries from frustrated customers. As customer demands grow, and since company management often doesn’t directly interact with customers, the frontline agent becomes the face and voice of the company.”
Petra Seals:
“The skills needed in the contact center are changing (see my comments in the main article), which from what we are seeing, is driving an increased interest in working in customer service.
“As employees are asked to help build relationships and loyalty with customers, the job turns from being a transactional duty and potentially monotonous role to one that is more fulfilling. This is also driving the trend of fewer agents leaving after experiencing the job.
“As technology is streamlining the process and making it easier to find answers, the job is less overwhelming from day one making it more likely that agents stay.”
Q. Are you seeing any changes in the alignment between the basic skills and quality of applicants and contact center needs/requirements? If so, what are they and their driving factors?
Mark Pereira:
Everyone tries to put their best foot forward before, during, and on the first day of training. However, that facade can quickly fade when the training class gets challenging. I feel their attitude makes a difference between a new hire succeeding or failing.
I recall my last training class, where two trainees struggled to understand the material. Despite multiple review sessions, knowledge checks, and simulations, they were faking their way through.
So, after class, I reached out to both of them individually. One trainee brushed me off, insisting the material was too easy, and seemed offended that I even asked. The other trainee stayed behind to ask questions whenever something felt challenging, admitting she feared looking stupid in front of her classmates.
In the end, the trainee who sought support went on to pass the final exam and is now performing well, still reaching out for help when needed. The other trainee, however, resigned before the final exam.
After attitude, an agent’s soft skills - such as listening, problem-solving, and de-escalation - are crucial. From my experience listening to numerous calls from both new and senior agents, it’s clear that what truly sets them apart is their proficiency in these soft skills.
Petra Seals:
The traditional skills and needs of a contact center are changing tremendously as technology and AI become more prevalent and self-service takes the easy tasks out of the interactions. Now, agents need to have greater emotional intelligence and technical skills than ever before.
Some of the best contact center employees come from service industries that rely on human connections to make money, like bartenders and waiters.
Any interaction with a human is an opportunity to build a relationship with that customer. Agents don’t need to be able to answer every question. Instead, they need to be able to create trust with the customer while simultaneously using their tools to provide them with the right answer or next best action.
BLS Forecast: Continued Slowing Labor Supply Growth, Fewer CSR positions
The pattern of shrinking employment and labor force participation growth rates, and declining number of customer service jobs in the U.S. appears to be continuing.
In August 2024 the Bureau of Labor Statistics (BLS) released its employment projections from 2023 to 2033. It forecasts that the U.S. total employment growth rate will slow to 0.4% annually compared with the 1.3% annual growth recorded over the 2013-23 decade.
In turn, the labor force participation rate is projected to continue to fall from 62.6% in 2023 to 61.2% in 2033, with the rates for both men and women forecasted to decline.
These trends are driven, in turn, by slowing population growth with aging (and retiring) individuals accounting for the fastest growing segment.
“Population growth rates have been slowing for several decades; the projected 0.6 percent annual growth would, if realized, represent the slowest growth rate since BLS began publishing this data,” says the BLS. It adds: “Population growth is projected to be fastest in the older age groups, who are less likely to participate in the labor force.”
The BLS has also reported in its latest Occupational Outlook Handbook that the number of customer service representative (CSR) positions are also expected to decline by 5% over the same 2023-2033 period, from 2.96 million to 2.8 million. The BLS description of CSRs includes those who engage with customers in-person as well as through communication channels (phone, but also chat, email, and social media).
Even so, there will be an average of some 365,000 job openings for CSR employment each year to replace retired or transferred employees.
“There is expected to be less demand for customer service representatives, especially in retail trade, as their tasks continue to be automated. Self-service systems, social media, and mobile applications enable customers to do simple tasks without interacting with a representative,” says the BLS. “Advancements in technology will gradually allow these automated systems to do even more tasks.”
Here is the reaction and comments from one of our panelists,
Petra Seals:
“While contact centers may need fewer employees, they will need to compete for agents with higher-level skills in emotional intelligence and technical capabilities to use the newest technologies effectively.
“Because of this, we see recruiting and retention becoming more important for contact centers, rather than less important, as companies compete for a smaller pool of qualified candidates.”
Q. What are your recommendations to contact centers to ensure they have the needed quality and loyal staff as we head into 2025 and the second half of the decade?
Mark Pereira:
Invest in employee development through coaching, mentoring, and microlearning, among other initiatives, to provide continuous learning and career advancement opportunities. This enhances CX, improves job satisfaction, and reduces turnover.
Leverage AI, better-designed agent dashboards, automation, and other solutions to provide agents with the information they need when they need it the most to help lower average handle time (AHT), minimize agent frustration, and improve CX.
To ensure their wellbeing and job satisfaction, offer competitive pay and benefits, such as mental health resources and flexible remote or hybrid work options based on employee preferences.
Create a company culture that can benefit from remote and hybrid employees, which will help improve retention, engage employees, and attract top talent to your center.
Stephane Rivard:
Contact center hiring leaders need to understand that they can and should hire for the right skills; the resume is dead.
Start by building skill taxonomies to understand the unique recipes of skills needed for the roles of the organization. For example, two of the top skills we’ve observed in top salespeople are fluency and building rapport.
With this knowledge, contact centers can begin to hire for these skill profiles ensuring they are hiring people with the right skills, not just any skills.
Doing so proactively addresses problems like churn down the road, since hiring for skills has proven benefits like keeping agents on the job for longer (as said previously). It also improves the candidate experience because applicants can showcase their skills in a fairer hiring process.
“Contact center hiring leaders need to understand that they can and should hire for the right skills; the resume is dead.”
—Stephane Rivard
If I were to recommend anything to contact centers it would be to implement skills-based hiring techniques and technology, effectively ensuring their hiring process delivers a high-quality candidate experience while being able to identify high-quality candidates.
AI is the most effective and versatile tool for accomplishing this task. Leverage AI in facets of recruitment where it can make a quantifiable difference: like reducing the number of interviews or even simplifying training to improve the new hire experience once they’re on the job.
Contact centers should only embrace technologies that can deliver measurable improvements. AI isn’t just about automating tasks anymore; it’s about augmenting them for better performance outcomes.
Petra Seals:
The way you create quality and loyal staff is by providing them with the training and upskilling they need for continuous improvement and advancement in their careers.
Companies need to have strong employee engagement. One of the best ways to create that is by implementing strong coaching frameworks that provide opportunities for agents to not only learn, but also to receive praise, and create opportunities for team building.
We have seen customers have significant improvements in retention just by implementing coaching frameworks and training supervisors, managers, and leaders on how to coach more effectively.