Is the UK’s call centre industry under threat? Are low-wage economies, such as India, sucking the lifeblood from teleworking heartlands like Glasgow? You would be forgiven for thinking so. The offshoring phenomenon has created complete hysteria among politicians and certain sections of the media on both sides of the Atlantic.
Yet an independent report commissioned by the DTI and published in May 2004 predicts that the number of people employed by UK call centres will rise by 245,000 to more than one million by 2007. What is more, the leading domestic players are making a lot of money. LBM Solutions, which runs outsourced call centres and provides data services to blue-chip firms, was recently ranked among the 100 fastest-growing companies in the UK by Real Business magazine, based on organic revenue growth over a four-year period.
Two years ago, LBM had about 300 staff, based at its headquarters in Altrincham, Cheshire, across the street from its first call centre. Today, it has 1,350, with additional call centres in Bredbury and Middleton, and a sales office in London. The Middleton facility opened in August last year and has already filled 350 of its 500 teleworking seats.
Such explosive growth has created big challenges for operations director Tony Bailey, whose responsibilities include HR and recruitment.
“The main challenge for any company like ours is recruitment,” he says. “Many people think call centres are sweat-shops, so the idea of working for one is not widely promoted by colleges and schools. Also, the industry has a transient working population. It employs a lot of students, for example, who have to go back to college after their summer vacations.”
Slowing down staff churn
According to Bailey when he joined LBM in early 2003, staff churn (taking into account the natural shedding of temporary workers) was as high as 30% a month. Today, that figure is down to 10%. So how did he reduce the turbulence?
One major factor was the support Bailey received – and continues to receive – from Paul Beck, LBM’s co-founder and chief executive. “I was headhunted to bring structure to the company without taking away its entrepreneurialism,” Bailey says, explaining that Beck knew that a proper HR function would support the next stage of his company’s growth and free up more of his time.
“Paul has a very strategic view of HR. Nine times out of 10, he has given me the money I need to take things forward.”
The first processes to be initiated by Bailey were, he says, all common sense. At the top of his list was a rigorous system for 360-degree feedback. The value of gathering detailed information, not only from clients but also from staff and other stakeholders, was something he had learned in his previous job at Vertex, the telecommunications company. There he was a business support manager with responsibility for HR, recruitment and management information, again in a call centre.
“Today, LBM constantly asks: ‘Where do we need to improve?'” Bailey says. “We meet clients face to face once a month. We constantly seek feedback. We want people to tell us what is going wrong.”
All staff are given a detailed monthly update of the company’s financial performance. Managers take staff away from their phones to present the latest information. Then, about a week later, a business process team surveys 10% of the staff, chosen at random, to see if they understood and were satisfied by the update. Each interviewee can choose to give this feedback anonymously, if they wish.
Not like a sweat-shop
Such openness would be unusual in any industry, let alone one with a sweat-shop reputation. It is just one of the ways Bailey hopes to make his staff feel more appreciated, and therefore less inclined to take their skills elsewhere.
Another is LBM’s emphasis on high-quality training: “In many businesses, and especially in the call centre business, training is often the first thing to go [when competition hots up],” Bailey says. “We have gone the other way, not only by offering more extensive training to [teleworking] agents than our competitors, but also by creating a dedicated training facility for managers.”
A team manager is required for every 15 agents in an LBM call centre. Bailey says it is much easier and cheaper to “grow” such managers internally than to recruit them from outside.
To achieve this, in his first year at LBM, he set up a management development programme to cherry-pick between eight and 10 potential managers every three months. The programme has two dedicated, full-time trainers and its own office at Altrincham.
Retention is also aided by the variety of positions available at LBM. The company was founded in 1996 by Beck and Tim Borthwick, experts in direct marketing and data-mining respectively. They planned to offer clients a unique combination of services, managing customer data and customer services, using one to strengthen the other.
Today that plan has been realised, with customers including O2, Vauxhall and Co-Operative Bank.
“The growth and breadth mean I can offer people a lot of opportunities to move within the company,” Bailey says. “I can move agents from one campaign to another, or move them up the ladder to more demanding campaigns with better pay. Alternatively, I can offer sales management positions, supporting roles in departments such as training, or sales jobs at head office or in London.”
Another helpful aspect of LBM’s business is its focus on call centre campaigns that are more complex – and therefore more interesting and lucrative. About 70% of its agents work on “outbound” campaigns, where they initiate contact with customers for marketing purposes.
A typical campaign involves arranging phone appointments with key decision-makers at target companies (identified by LBM’s data arm, which maintains one of the largest business-to-business databases in the UK), then passing on the details of those appointments to the client’s sales team, who use them to make pitches.
Benefits for people management
Such campaigns have beneficial side-effects for personnel management, as Bailey explains.
“With an outbound campaign, you can take people off the phones in order to coach them, without any negative impact on the client. With an inbound campaign [using an outsourced customer services function], if you take someone off the phones then the client gets abandoned calls. Outbound has massive benefits on the people side, as long as you use that time fruitfully.”
The main factor in retaining staff is remuneration, and Bailey claims LBM is very competitive in this area. “Paul has invested in the staff rather than taking profits,” he says. Basic salaries for agents range from about 12,500 to 18,000, depending on the complexity of the campaign. The commission for those with a sales remit ranges from 150 to as much as 800 a month.
LBM also offers two salary increases per year to all members of staff, based on personalised performance criteria. “When people join us we give them five or six objectives related to their job,” Bailey says. “For example, a manager might be judged on the productivity, net profit and churn of their team.”
Every two months, each member of staff has a review to monitor progress towards their objectives. Every six months, they will be given a pay rise, with the percentage increase linked to how well they have done (unless they fail to hit 50% of their objectives, in which case they get no pay rise at all).
“In January this year we gave our fifth such increase, with the top performers earning an extra 4%,” Bailey says.
Bailey adds that more subjective factors such as client feedback are also taken into consideration.
“A team might achieve 100 sales only for 99 to come back as cancellations,” he says. “I have to look at the full picture.”
With such a variety of incentives and opportunities, it is easy to see how LBM is able to keep its churn figures down. All it needs to do is apply the same analytical rigour to personnel management that it uses to identify the sales leads pursued by its call centre agents.
Tony Bailey’s CV
An instinct for people skills persuaded Tony Bailey to enter the workplace straight after he finished his A-levels.
“I simply had a sense that I wanted to move into man management,” he says. He joined British Gas and worked his way up the ladder over 19 years, eventually becoming the national customer relations manager for the organisation’s retail arm.
Then he took redundancy and spent a few months working as a consultant before joining Vertex, the telecommunications firm, as business support manager, with responsibility for HR, management information and recruitment.
Over the next three years, he developed a taste for the methodical thinking that would serve him well at LBM. “The great thing about an operational role is that you get to measure your day in very quantifiable terms,” he says.
He worked in Glasgow and Birmingham, and managed call centres in Liverpool, before being headhunted by LBM, which he joined in early 2003.