Ringing the changes

HR has an important role to play in making UK call centres a more attractive
place to work – stemming the tide of companies moving this service abroad.
Caroline Horn reports

When call centres were first introduced some 20
years ago, they were meant to help improve customer services as well as lower
costs. During the past five to 10 years, however, call centres have undergone a
period of massive expansion and the focus has been very much on reducing costs.

The fact that a few companies are now relocating some of their
call centre services overseas to countries such as India reflects the continued
drive to economise.

Saudagar Singh, HR director at NPower, says: "There are
two major reasons for relocating call centres abroad. One is cost; the other is
the perception of a lack of skills and flexibility in the UK workforce."

The overseas competition has put extra pressure on UK-based
call centres to prove they can compete in terms of costs, service and
productivity. Technological developments have helped to shave costs in service
centres – for example, the introduction of voice-activated menu selections for
customers – but there has also been pressure to cut costs in areas such as
training and the working environment.

Such measures could have a detrimental effect on the very efficiencies they
are meant to create, according to Scott Watson, director of performance at
Summit Consulting & Training.

"Executives of call centres are told to cut costs and increase profits,
so they cut the number of staff," he says, "but they also want to get
more from their people and to keep customer complaints down."

As a result, firms end up with high stress levels and attrition rates among
staff which drive up costs while the quality of service suffers. That in turn
encourages companies to investigate the options.

Watson says the only way to create positive change is to change the way in
which executives actually run the call centres.

"Currently, we have sales driven by income, HR driven by getting better
results, and staff driven by the need to keep the customer happy." The
focus is on survival, rather than on long-term business development.

Instead of focusing on costs, companies could be looking at how to maximise
the quality of service they offer by providing better training, comfortable
working environments and better management. This should contribute to improving
staff motivation, increasing productivity and lowering attrition rates – thus
cutting costs.

But does it work in practice? Accenture HR Services, whose clients include
BT and Cable & Wireless, does not classify itself as a typical call centre
operation, but it does use call centre metrics to put some quantifiable
measures on its service centres.

In comparison to the average call centre, its results look pretty good. For
example, for BT, it provides an average nine second delay in answering the
phone against an industry standard of 20 seconds. It is also committed to a
maximum of 2 per cent of calls abandoned against an industry standard of 5 to
10 per cent. Moreover, attrition rates are around just 10 per cent, compared
with an industry average of 35 to 40 per cent.

Some of Accenture’s success is due to the fact that the operation is
client-specific – which is not applicable to all call centres. However, Pat
Jones, vice-president customer contact and information services, feels there
are a number of other reasons for the company’s high productivity and retention
rates.

"Part of the reason we do better is due to our philosophy on the
quality of service we provide. We want the service to be delivered at the first
point of call, so we are constantly monitoring calls and checking people have
the skills they need."

As well as improving service, skills development is a key motivator for
staff. The company also ensures its communication channels with employees are
open, and that people understand their part in the whole process of service
delivery.

The UK Call Centre Association (CCA) argues that the main players in this
industry are moving in this direction.

Colin Mackay, director of quality and standards at the CCA, says: "The
UK is moving away from cost-cutting towards proper development and training. I
don’t think that many call centres will try to compete with places such as
India in terms of cost, but on quality and delivery of customer
satisfaction."

The industry is realising that providing good working conditions needn’t
come at the expense of operational efficiencies.

NPower, which has worked hard to establish a positive culture, has also
recently reached agreements with the unions for a series of pay cuts and
redundancies. This forms part of a drive to standardise conditions, following
the acquisition of a number of new call centres by the company.

Its research has shown that the new centres were less competitive than its
existing call centres in terms of costs, effectiveness, efficiency and
flexibility of the workforce, and it negotiated hard with unions to reduce
those costs.

If the firm had simply been demanding pay cuts from its new recruits, it is
unlikely it would have succeeded in its negotiations, which were successfully
concluded in March. Instead, alongside the pay cuts, it offered a package that
reflected the company’s ethos. Personal development plans, job rotation schemes
– to allow people to develop in new roles – and bonus schemes for motivation
were also on the table.

There are changes underway in call centres, some of which are attributable
to the industry’s increasing maturity. A major problem call centres once faced,
for instance, was finding experienced staff. As call centres have clustered in
areas such as Yorkshire and the North East and towns such as Milton Keynes,
today there is a ready pool of experienced staff.

Singh also believes that the UK workforce has the capabilities and
flexibility that employers need. Any problems in call centres today do not lie
in recruitment, he says. "Getting people who are skilled isn’t the issue –
it’s what you do with them once you get them through the door."

Attrition rates show there is still a problem with staff retention. On
average, it is estimated to be around the 30 to 40 per cent. Watson blames poor
training and management techniques for that figure, along with rapid technical
change.

However, the demanding nature of the work itself also needs to be addressed.
It can be tedious and competitive, and dealing with customers can be draining.
One method used by NPower to reduce stress levels is job rotation, made
possible by having people work in teams.

There are a number of ways to make working in call centres more attractive.
Company culture is a significant issue. At NPower, Singh says: "If you
have people who enjoy the work they do, that will come through in the
results."

Companies should be prepared to invest in on-site facilities, such as a
canteen and sports club, to help staff feel more valued and involved in the
company. "It makes good business sense – a well treated workforce will
give you the dividends, so if you make the investment, you’ll get the
returns," he says.

Training can also help with motivation as well as the quality of service,
but it is an area that has been overlooked by some companies and not fully
exploited by others, says Watson. "If you look at training in UK call
centres, heads of training are usually people who do their job well – they are
good on the phone or good managers – and so they are put into training. But the
training they deliver focuses on short-term measures, such as the number of
calls people answer, and it is focused on getting them on the phone after just
one week of training."

Trainers are often unable to assess how to deliver better training and
outcomes. Moreover, the emphasis is on keeping the customer happy -not the
employee.

However, TV Travel Shop, which sells holidays for a number of tour operators
via call centres, is an example of how appropriate training can improve staff
motivation and boost productivity. It has always made training a priority,
giving new staff one-on-one training for six weeks before they move into direct
customer contact, and ensuring the workforce is constantly updated on new
products.

HR and training director Maureen McGrory says: "We are constantly
looking at our training programmes because we realise that the only way we will
remain one step ahead in a very competitive market is through the development
of our sales consultants."

During the recent difficulties experienced by the travel industry, TV Travel
Shop put even more emphasis on training, accelerating its product training
during February and March and introducing short, sharp ‘reminder’ courses on
skills. The level of inquiries received by the company has remained consistent
during the past few months despite being one of the most difficult periods for
the travel industry, and staff have remained motivated.

Another key issue for call centres to address is communication. Throughout
the period of negotiations at NPower, Singh says: "We did a lot to
communicate our values and standard practices across the company, from team
briefings and company magazines to focus groups."

Communicating its intentions clearly and informing staff of its long-term
plans was also important in keeping workers motivated. So while attrition
figures are high in some parts of the group, reaching around 38 per cent where
call centres are being closed, NPower can also boast attrition figures closer
to 12 per cent in its more stable centres. As Singh says: "It’s not just
about pay – the whole working environment and the culture of the organisation
is what counts." cu

When call centres were first introduced some 20 years ago, they were meant
to help improve customer services as well as lower costs. During the past five
to 10 years, however, call centres have undergone a period of massive expansion
and the focus has been very much on reducing costs.

The fact that a few companies are now relocating some of their call centre
services overseas to countries such as India reflects the continued drive to
economise.

Saudagar Singh, HR director at NPower, says: "There are two major
reasons for relocating call centres abroad. One is cost; the other is the
perception of a lack of skills and flexibility in the UK workforce."

The overseas competition has put extra pressure on UK-based call centres to
prove they can compete in terms of costs, service and productivity.
Technological developments have helped to shave costs in service centres – for
example, the introduction of voice-activated menu selections for customers –
but there has also been pressure to cut costs in areas such as training and the
working environment.

Such measures could have a detrimental effect on the very efficiencies they
are meant to create, according to Scott Watson, director of performance at
Summit Consulting & Training.

"Executives of call centres are told to cut costs and increase profits,
so they cut the number of staff," he says, "but they also want to get
more from their people and to keep customer complaints down."

As a result, firms end up with high stress levels and attrition rates among
staff which drive up costs while the quality of service suffers. That in turn
encourages companies to investigate the options.

Watson says the only way to create positive change is to change the way in
which executives actually run the call centres.

"Currently, we have sales driven by income, HR driven by getting better
results, and staff driven by the need to keep the customer happy." The
focus is on survival, rather than on long-term business development.

Instead of focusing on costs, companies could be looking at how to maximise
the quality of service they offer by providing better training, comfortable
working environments and better management. This should contribute to improving
staff motivation, increasing productivity and lowering attrition rates – thus
cutting costs.

But does it work in practice? Accenture HR Services, whose clients include
BT and Cable & Wireless, does not classify itself as a typical call centre
operation, but it does use call centre metrics to put some quantifiable
measures on its service centres.

In comparison to the average call centre, its results look pretty good. For
example, for BT, it provides an average nine second delay in answering the
phone against an industry standard of 20 seconds. It is also committed to a
maximum of 2 per cent of calls abandoned against an industry standard of 5 to
10 per cent. Moreover, attrition rates are around just 10 per cent, compared
with an industry average of 35 to 40 per cent.

Some of Accenture’s success is due to the fact that the operation is
client-specific – which is not applicable to all call centres. However, Pat
Jones, vice-president customer contact and information services, feels there
are a number of other reasons for the company’s high productivity and retention
rates.

"Part of the reason we do better is due to our philosophy on the
quality of service we provide. We want the service to be delivered at the first
point of call, so we are constantly monitoring calls and checking people have
the skills they need."

As well as improving service, skills development is a key motivator for
staff. The company also ensures its communication channels with employees are
open, and that people understand their part in the whole process of service
delivery.

The UK Call Centre Association (CCA) argues that the main players in this
industry are moving in this direction.

Colin Mackay, director of quality and standards at the CCA, says: "The
UK is moving away from cost-cutting towards proper development and training. I
don’t think that many call centres will try to compete with places such as
India in terms of cost, but on quality and delivery of customer
satisfaction."

The industry is realising that providing good working conditions needn’t
come at the expense of operational efficiencies.

NPower, which has worked hard to establish a positive culture, has also
recently reached agreements with the unions for a series of pay cuts and
redundancies. This forms part of a drive to standardise conditions, following
the acquisition of a number of new call centres by the company.

Its research has shown that the new centres were less competitive than its
existing call centres in terms of costs, effectiveness, efficiency and flexibility
of the workforce, and it negotiated hard with unions to reduce those costs.

If the firm had simply been demanding pay cuts from its new recruits, it is
unlikely it would have succeeded in its negotiations, which were successfully
concluded in March. Instead, alongside the pay cuts, it offered a package that
reflected the company’s ethos. Personal development plans, job rotation schemes
– to allow people to develop in new roles – and bonus schemes for motivation
were also on the table.

There are changes underway in call centres, some of which are attributable
to the industry’s increasing maturity. A major problem call centres once faced,
for instance, was finding experienced staff. As call centres have clustered in
areas such as Yorkshire and the North East and towns such as Milton Keynes,
today there is a ready pool of experienced staff.

Singh also believes that the UK workforce has the capabilities and
flexibility that employers need. Any problems in call centres today do not lie
in recruitment, he says. "Getting people who are skilled isn’t the issue –
it’s what you do with them once you get them through the door."

Attrition rates show there is still a problem with staff retention. On
average, it is estimated to be around the 30 to 40 per cent. Watson blames poor
training and management techniques for that figure, along with rapid technical
change.

However, the demanding nature of the work itself also needs to be addressed.
It can be tedious and competitive, and dealing with customers can be draining.
One method used by NPower to reduce stress levels is job rotation, made
possible by having people work in teams.

There are a number of ways to make working in call centres more attractive.
Company culture is a significant issue. At NPower, Singh says: "If you
have people who enjoy the work they do, that will come through in the
results."

Companies should be prepared to invest in on-site facilities, such as a
canteen and sports club, to help staff feel more valued and involved in the
company. "It makes good business sense – a well treated workforce will
give you the dividends, so if you make the investment, you’ll get the
returns," he says.

Training can also help with motivation as well as the quality of service,
but it is an area that has been overlooked by some companies and not fully
exploited by others, says Watson. "If you look at training in UK call
centres, heads of training are usually people who do their job well – they are
good on the phone or good managers – and so they are put into training. But the
training they deliver focuses on short-term measures, such as the number of
calls people answer, and it is focused on getting them on the phone after just
one week of training."

Trainers are often unable to assess how to deliver better training and
outcomes. Moreover, the emphasis is on keeping the customer happy -not the
employee.

However, TV Travel Shop, which sells holidays for a number of tour operators
via call centres, is an example of how appropriate training can improve staff
motivation and boost productivity. It has always made training a priority,
giving new staff one-on-one training for six weeks before they move into direct
customer contact, and ensuring the workforce is constantly updated on new
products.

HR and training director Maureen McGrory says: "We are constantly
looking at our training programmes because we realise that the only way we will
remain one step ahead in a very competitive market is through the development
of our sales consultants."

During the recent difficulties experienced by the travel industry, TV Travel
Shop put even more emphasis on training, accelerating its product training
during February and March and introducing short, sharp ‘reminder’ courses on
skills. The level of inquiries received by the company has remained consistent
during the past few months despite being one of the most difficult periods for
the travel industry, and staff have remained motivated.

Another key issue for call centres to address is communication. Throughout
the period of negotiations at NPower, Singh says: "We did a lot to
communicate our values and standard practices across the company, from team
briefings and company magazines to focus groups."

Communicating its intentions clearly and informing staff of its long-term
plans was also important in keeping workers motivated. So while attrition
figures are high in some parts of the group, reaching around 38 per cent where
call centres are being closed, NPower can also boast attrition figures closer
to 12 per cent in its more stable centres. As Singh says: "It’s not just
about pay – the whole working environment and the culture of the organisation
is what counts."

Staff turnover in call centres

Average staff turnover has risen to
24.5 per cent (from 22 per cent in 2001). Turnover rates are to be highest in
the West Midlands, the South East and London, and lowest in the North West and
Scotland.

Pay and Conditions in Call Centres 2002, IDS

Almost three-quarters of all call
centres in the West Midlands and more than two-thirds in the South East had
annual turnover rates of less than 25 per cent, one-third of call centres in
the East and half of those in the North East had annual turnover rates of
between 50 per cent and 100 per cent.

More than one-fifth (20.5 per cent) of organisations report
that the highest proportion of their leavers join another call centre. Of the
rest, 28.3 per cent take non-call centre work in the same organisation and 51.2
per cent leave the sector.

Call Centres 2002: Reward 
& Work-Life Strategies, IRS/CCA RI Report

The key factors in high labour
turnover:

– Low job control over how tasks are done and how customers are
spoken to

– The use of monitoring for disciplinary purposes

– Repeated interactions with the same customer

Sheffield University/CCA Report, Human Resource Management in
Call Centres, 2002
Source: the Call Centre Association (www.cca.org.uk)

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