Staffing in the Age of Angst

We now live in “The Age of Angst”: of fear and insecurity, facing a bleak future with social upheavals, pandemics, natural- and human-caused or worsened disasters, and political chaos. All taking place in an uncertain economy amidst rapid [and notably artificial intelligence (AI-driven)] technological change.

So how is the tenor of and the issues in this age impacting the ability of contact centers to recruit and retain agents? For insights, we had virtual conversations with Molly Clark, Managing Director, The Northridge Group, Brent Holland, Founder and CEO, Intelliante, and Mark Pereira, Trainer and On-Site Manager.

Q. What are the top trends and changes that you are seeing in contact center recruiting and retention? What are their drivers?

Molly Clark:

There are four trends that are driving recruitment and retention in today’s contact center.

First, an increased demand for high-quality agents, specifically with the explosion of cloud-based solutions and omnichannel support. The complexity of customer interactions has increased, creating a need for highly-skilled agents: the result of exceptional training and solid tenure.

Second, a change in demographics as millennials and Gen Z workers enter the workforce looking for options that weren’t previously available in traditional contact centers.

Third, there’s an increase in talent as companies differentiate the customer experience (CX), improving their CX numbers. Organizations that can attract the best talent have a better way to differentiate their brands in the market.

Fourth, and the last one, is the rising rate of labor costs. Contact centers have traditionally been viewed as cost centers, and companies need to flip their ideas of what increased labor costs look like.

Brent Holland:

Here’s my take, based on my understanding of what is happening.

First, contact centers increasingly use AI and machine learning to streamline hiring processes and identify candidates with the right skills and attributes. These technologies analyze large volumes of data from various sources, such as resumes, assessments, and social media, to identify the candidates most likely to succeed.

Second, data analytics help identify factors contributing to employee turnover, allowing contact centers to implement targeted retention strategies.

Third, centers recognize the importance of creating a positive work environment that fosters employee satisfaction and reduces turnover.

Strategies such as flexible work arrangements, career development opportunities, and recognition programs can improve employee engagement and retention. Additionally, contact centers are reportedly investing in employee wellness programs and mental health support to address the unique challenges and stressors associated with contact center work.

Fourth, attracting employees from diverse backgrounds through targeted recruitment and inclusive workplace policies, such as creating a more inclusive environment, can improve the CX.

Fifth, contact centers are exploring alternative recruitment and retention strategies to address the changing nature of work. Remote and blended work options are reportedly still gaining popularity, even with the return-to-office (RTO) conversations, as they allow contact centers to tap into a larger talent pool and provide employee flexibility to provide a superior business-growing CX.

Moreover, although not necessarily new, more contact centers are experimenting with gig economy models, where individuals can work freelance or contract, providing flexibility for both the contact center and the workers.

Mark Pereira:

Here are a few trends I’ve noticed:

• Experienced agents today are skilled and discerning, carefully choosing their employers.
• To make informed decisions, agents are turning to social media and to job boards, such as Indeed, for research on companies and job opportunities.
• In cases where social media provides insufficient information, agents actively seek answers by engaging with call and contact center groups. These inquiries often revolve around the company’s reputation, the interview process, and the specific tasks.

As a result, companies have a unique opportunity to shape the narratives around their recruiting and retention efforts; when companies treat their agents well, their agents become walking talking billboards to attract and retain good talent. Further, when your agents have a referral bonus, they will shout from the rooftops that you’re hiring.

Agents prioritize two key factors when looking for a call or contact center to join. One, decent pay (based on the city and state). Two, the ability to work-from-home (WFH) or a role where they may need to come into the office once a month.

While agents value benefits, work-life balance, and provided equipment, these factors typically come after the top two on their checklist.

“Experienced agents today are skilled and discerning, carefully choosing their employers.” —Mark Pereira

Also, to reduce instances where agents may not attend a video interview due to their lack of technology literacy, recruiters should provide simple and easy-to-follow instructions for using any video platform. This will help agents feel confident and ensure they do not miss out on an opportunity due to technological challenges in our digital age.

Q. AI-driven ChatGPT, like Generative AI, has burst on the scene. What impacts and implications, if any, will it have on the demand for agents, agent turnover, agent recruiting, assessment, and labor costs, including wages, benefits, recruiting, and training?

Molly Clark:

That’s the million-dollar question. The problem is that when you think about the fundamentals of implementation - people, processes, and technology - companies are throwing technology at CX.

The trends associated with AI, cloud, and automation are getting very crowded, and we cannot lose the fundamentals of people, processes, and technology, especially when driven by each brand’s business requirements. Overall, I think everyone will use ChatGPT or some type of AI functionality, but it will never replace the agent.

One big area where technology can help is agent turnover because agents will not be required to perform remedial tasks like data entry. Removing these tasks can increase employee satisfaction. Emerging technology can also screen agents, reducing the time and energy traditional staff would typically spend on this critical task.

What’s important when you think about the labor costs of ChatGPT and AI in any arena is to ensure businesses are executing the change management pieces alongside coaching and agile maintenance.

“One big area where technology can help is agent turnover because agents will not be required to perform remedial tasks...” —Molly Clark

There will always be an investment of time, energy, and resources when embracing this type of technology. It is a change that can be disruptive. That is why it is important to view people, processes, and technology as a whole and not just rely on tech to solve everything.

Brent Holland:

Agent Demand. Large Language Models (LLMs) can potentially automate some tasks and processes, such as handling routine customer inquiries or providing basic information.

The net impact of automation is that it reduces the need for human agents, especially those who perform repetitive and low-complexity tasks, as reported in a 2022 research article, “Impact of Industry 4.0 adoption on workload demands in contact centers,” published in Human Factors and Ergonomics in Manufacturing & Service Industries.

Agent Turnover. LLMs’ impact on agent turnover is unclear. These technologies can offset burdensome tasks contributing to agent burnout and turnover, as reported in the article, “Burnout on contact center: a literature review,” published in Interdisciplinary Social Studies, allowing agents more time to focus on complex and fulfilling customer interactions.

However, LLMs could also create agents’ job insecurity because of the potential to replace their roles, which risks leading to higher turnover.

Agent Recruiting and Assessment. Integrating LLMs into agent jobs will change essential agent skills and qualifications.

“...applicants are turning to LLMs to help decipher personality, situational judgment, and cognitive ability tests.” —Brent Holland

One such skill is the capacity to recognize LLM hallucinations (i.e., misinformation produced by AI tools). Agents must possess deep system and procedural knowledge and problem-recognition skills to evaluate whether LLM recommendations are valid. Further, centers may prioritize applicants with the capacity to communicate effectively, solve problems, and collaborate with LLMs to bolster performance.

Although headlines (like in the Harvard Business Review) often focus on talent assessment applications of AI, many applicants use LLMs to improve their test performance and game the system. That is also made possible by most companies allowing prospective frontline workers to apply and complete pre-employment testing remotely.

There are growing concerns that applicants are turning to LLMs to help decipher personality, situational judgment, and cognitive ability tests. Applicants need only enter the test question and response options into an LLM to get a recommendation on the best answer. To the extent that applicant behavior undermines a test’s predictive power, the pre-employment test stops being useful.

Labor Costs. Incorporating LLM technology can reduce long-term labor costs. By automating certain tasks, contact centers hope to reduce headcount, leading to cost savings in wages, benefits, and training expenses. However, LLMs require considerable ongoing administrative and worker training costs.

Mark Pereira:

Generative AI has made a considerable impact on customer service. Since most companies want to reduce costs to increase profits, they are turning towards reducing their customer service teams and looking at AI as their one-stop shop for all customer service interactions.

And employees, current and prospective, know it. I came across an Ipsos study via LinkedIn which reported that many younger workers feel that this technology will cost them their jobs.

This trend seems like a nearsighted error as I believe these companies have left their customers behind, as customers are left screaming at a chatbot or AI voice assistant and demanding to speak to a human customer service agent.

Don’t get me wrong. I feel Generative AI has several benefits to offer customer service teams, such as helping new agents find answers to customers’ questions fast, thereby improving AHT or summarizing complex information into digestible chunks, or even assisting agents to take better notes by summarizing a call.

I’ve also noticed that AI has been used for a few years to shortlist resumes with specific keyword(s), which is especially true for companies receiving many resumes for a single job posting.

“[Companies] are turning towards reducing their customer service teams and looking at AI as their one-stop shop...This trend seems like a nearsighted error...” —Mark Pereira

Regarding agent turnover, I’ve noticed systems that collect agent absenteeism and their metrics, such as schedule adherence and AHT to name a few, to recognize trends and identify agents high on the scale to leave a company. Once the agent(s) are identified, the agent’s team lead or supervisor can discuss with the agent how to possibly turn things around.

As to training, it is required if the team is supposed to use the new feature. If it’s a chatbot for the team, then a simple microlearning course is created and deployed through MS Sway.

Q. Is WFH and hybrid working affecting contact center staffing and retention?

Molly Clark:

Especially for content centers and CX workers in general, WFH and hybrid are the New Normal, and you can see the benefits from the employee perspective and the employer considerations.

For employees, this is table stakes now. It allows for flexibility and a work-life balance, especially for younger generations demanding it as a requirement. Employers with established WFH or hybrid models can reach more resources and have some flexibility geolocation-wise to bring in better talent.

Brent Holland:

WFH and hybrid working arrangements have reportedly become more prevalent in contact centers, especially since the COVID-19 pandemic. Centers adopted WFH and hybrid models to ensure employee safety, maintain business continuity, reduce office-related expenses, and, most critically, supported by research (like that published in the International Journal of Industrial Management), retain employees.

However, despite the push to rein in WFH in many sectors, the contact center industry appears poised to continue using WFH as a recruiting and cost-saving strategy.

Even so, some studies (like those by CraftJack and by the National Bureau of Economic Research) have highlighted the challenges employees face WFH, such as shared working spaces, personal privacy, and the presence of children, which can impact family satisfaction.

Additionally, the increased use of remote work and hybrid models may require organizations to adapt their workforce management practices, including workload, productivity, and employee wellbeing, because workers are alone, without supervisors to check in on them.

Burnout among staff during the transition to remote or hybrid work is also a concern, without having managers to guide them into the new environment.

Mark Pereira:

I believe that WFH and hybrid working are becoming the New Normal. This trend helps organizations reduce operational costs associated with maintaining a physical or smaller office and saves employees time and money. It also reduces the cost and time for commuting and reduces childcare expenses while at the same time provides disaster resilience.

With agents by and large liking WFH, and companies now tapping into a broader talent pool rather than focusing on a specific geographical area, they will likely find and retain longer, high-quality candidates.

But contact centers need, as we have found with the COVID-19 pandemic, to have applicants who have sufficient bandwidth, self-discipline, the ability to solve minor technical problems, and who have quiet work environments with minimal distraction, like from family and pets. Centers will need to screen candidates on these attributes when hiring.

Hybrid centers have also found ways to leverage this trend and its benefits. However, they may need to fine-tune their recruiting strategy to target candidates within a specific mileage range from their facility.

Q. Contact centers have traditionally turned to employment/staffing agencies for temporary and permanent hiring. But are they doing so now? Please discuss.

Brent Holland:

My take, albeit anecdotal, is that contact centers rely less on staffing agencies than in previous years. From discussions with customers, it appears the shift is due to the increase in remote work and the need to reduce recruiting-related expenses.

Advances in recruiting technology may also be a contributing factor because centers are better able to find and hire talent than a decade ago.

Mark Pereira:

I’ve noticed and even worked in a few call and contact centers that used a variety of staffing agency models, such as:

1. Temporary (short-term): agents working for the staffing agency who are assigned to clients for peak call volumes or short-duration projects.
2. Permanent hiring: where agents work for the staffing agency for the entire duration of the agency’s contract with the client.
3. Temporary to permanent (temp to perm): agents working on a trial basis for the client and, if successful, are brought on board for it permanently.

Contact centers tend to use the permanent hiring approach if the candidate perfectly matches or exceeds their expectations and when hiring for smaller call or contact center teams such as a team of 12 agents or less.

However, for medium to large centers, staffing agencies are a norm. Usually, you will see a temporary to permanent approach.

Regarding special projects, such as introducing a new product or service, agents are temporarily brought in by a staffing agency and then moved to another project.

Further, some centers may bring an agent in through a staffing agency and leave them with the staffing agency for their complete tenure, and this may be based on contractual agreements.

Q. What are your recommendations to contact centers to ensure they have the needed staff?

Molly Clark:

To recruit and retain staff, employers need to offer competitive wages and benefits. You can see how retail and healthcare are improving in the CX space because they understand their competitive advantage is their experience.

The firms that can pay more will bring in higher-quality talent, which goes back to flexibility and the work-life balance, especially in the contact center space.

After compensation, investment in employee development and training is the second greatest aspect of ensuring your contact center is correctly staffed.

We often poll our clients about how much time and energy they invest in training their resources. Yet the responses show that it is often a second or third priority.

The takeaway here is that training should be a higher priority for contact centers. You want to pay employees well, and you want them to have flexible time, but are you also providing the skills in a way that translates to improving within the organization or that makes them a little more valuable?

“The firms that can pay more will bring in higher-quality talent, which goes back to flexibility and the work-life balance, especially in the contact center space.” —Molly Clark

The answer to this question is all a part of creating a company culture curated at every level: using AI and ChatGPT to improve job efficiency and training and creating a culture that attracts good people.

Brent Holland:

There are many steps centers can take to ensure they have the right people when needed. However, for brevity’s sake, I outline eight suggestions to create the biggest and most immediate impact.

“Companies make the wrong hiring decision most of the time. It’s a longstanding and challenging problem but is solvable...” —Brent Holland

1. Expand recruitment and opportunities to include older workers. As outlined in the March 2023 Contact Center Pipeline article, “Looking Beyond the Wrinkles”, older workers are more reliable, stay longer, have lower absenteeism, upskill the workforce, and do not cost more to employ.
2. Optimize staffing levels. Adopt a capacity planning tool to determine the optimal number of staff required to meet service level targets while minimizing costs.
3. Implement safety staffing rules. Consider adopting safety staffing rules that ensure idle agents can handle unexpected spikes in call volume.
4. Review and update recruitment guidelines. Regularly evaluate recruitment and staffing guidelines to align with changing jobs, industry trends, and best practices.
5. Enhance training and support. Invest in continuous training programs to equip agents with the necessary skills and knowledge to handle customer inquiries effectively.
6. Improve working conditions. Create a more positive work environment by addressing salary, facilities, and working conditions on-premise. Ensuring remote employees have the right working conditions allows them to work safely, effectively, and comfortably.
7. Monitor and address burnout. Implement strategies to track and manage burnout, including workload management, regular breaks, and promoting work-life balance.
8. Improve hiring accuracy. Companies make the wrong hiring decision most of the time. It’s a longstanding and challenging problem but is solvable with the right tools, monitors, and partners.

Mark Pereira:

My final thoughts to ensure call and contact centers have the staff they need include the following.

Competitive compensation:

• Pay agents a competitive wage, considering local norms, and add a 20% or more premium to attract top talent.

Comprehensive benefits:

• Provide flexible work arrangements, such as WFH or hybrid, aligned with agent preferences.
• Offer holistic wellness benefits to support agents’ physical and mental wellbeing.
• Create opportunities for career growth, including tuition reimbursement and access to learning platforms like Lynda or Udemy.

Ongoing support and communication:

• Regularly check in with agents, especially during their initial year, to demonstrate ongoing support and a commitment to their success.
• Ensure agents have the tools and transparent performance metrics to excel in their roles.

“Inspire a sense of purpose among agents to maintain their motivation to come to work.” —Mark Pereira

Personalized coaching and recognition:

• Implement personalized coaching programs to offer constructive feedback, fostering agent development.
• Recognize and celebrate agents’ accomplishments to boost morale and motivation.

Continuous training and education:

• Provide comprehensive training on the basics but also soft skills, such as conflict resolution, time management, and accountability, to name a few, and keep educating agents because as they improve, your customer service team and your company improve.

Purpose-driven work:

• Inspire a sense of purpose among agents to maintain their motivation to come to work.
• Acknowledge that competitive pay alone may not ensure long-term retention.

Engagement assessment:

• Conduct engagement surveys, in-person interviews, and observations to gauge agents’ current level of motivation.
• Act on agent feedback to make tangible improvements based on their valuable input.

Fostering camaraderie:

• Create opportunities for agents to build camaraderie through team meetings, team-building events, and a chat room for sharing experiences and information.

Promote diversity and inclusion:

• Prioritize diversity and inclusion in the hiring process to foster a more inclusive workplace culture.
• Leverage agents’ diverse experiences and perspectives to bring varied ideas and help agents connect with customers.

Technology and cybersecurity training:

• Consider technology and cybersecurity training. When implementing new technology, ensure that you are trained on every aspect of the technology to train your team on its features. This helps ensure you’re making the most out of your technological assets.
• Further, since agents work increasingly remotely, use microlearning courses to train staff to protect your company from cyberattacks.