Making the call

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As the next breed of global contact centers will have to figure out how to keep costs low while raising quality and demonstrating customer benefit, it is likely that traditional forms of outsourcing will no longer suffice as a winning strategy on their own. Take a read of this new ebook to find out what trends are happening and what it will mean for the call center of the future.

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Making the call

  1. makingthe callWhy customers andstaff will embrace thenext outsourcing waveJim Bradley
  2. 2 | making the callIntroductionContact centers have been at the forefront of new and innovative employment models for over a decade.They are often subjected to cost–cutting and outsourcing, and they continue to suffer among the highestvoluntary attrition rates in the service sector.But, this is nothing compared to what’s on its way.There are a number of unstoppable demographic and social changes that are rocking the worldwideworkforce. Employers of all shapes and sizes will have to get to grips with these changes, and contactcenters are among them.Traditional forms of outsourcing will no longer suffice as a winning strategy on their own. Instead, the nextbreed of global contact centers will have to figure out how to keep costs low while raising quality anddemonstrating increased customer benefit. They’ll need to do this for the following reasons:1. High quality is the only way to justify the cost: Contact centers are expensive and cumbersome. If they’re not building customer loyalty, they’re eroding it, and businesses just won’t be able to justify the costs in increasingly competitive markets if the return isn’t there.2. It’s your reputation on the line: Many brands already know the damage that poorly delivered, outsourced service can wreak. Contact centers are requiring increasingly complex training and product knowledge to deliver great service, and there is a limit to the number of markets that can provide great service with low cost. Traditional outsourcing won’t work for every product and every brand.The future contact center has to be smarter, more diverse and more flexible. It’s not about innovation—it will be about survival. With attrition rates higher than virtually any other job category in the servicesector, contact centers are ripe for innovation—and the way forward is going to critically challenge manyorganizations and their management styles.
  3. 3 | making the callWe’re getting older. Today’s global workforce isundergoing an unprecedented transition—companies everywhere arefaced with the need to recruit and retain talent from an aging workforce.In all countries, people are living longer past two decades, but in recent years, has For the contact center environment,and working longer. People over the flattened and is now declining. this means three things:age of 50 constitute a larger part of the 1. The fresh-faced candidate who sawoverall population, and a larger part of the Since December 2007, the number of contact center jobs as a step into theglobal workforce. prime-aged workers in the U.S. labor force workforce and a way to support their has declined by 0.7%, while the number of studies is becoming more scarce;Since 1980, the percentage of workers aged workers over the age of 55 has increased by 2. Contact center management will need to50 and above in the U.S. has risen from 26% 7.6%. In fact, the number of workers aged 55 attract and retain a more diverse mix ofof the population to 37%. And by 2050, and older is higher now than any time since generations in their workforce—and thisthe share of workers aged 55 and older is 1948 and they are expected to comprise 24% will mean some big changes in operatingexpected to reach 19%, up from just over of the workforce by 2018. style; and14% in 2002. In the European Union, the 3. As the broader workforce struggles to fillnumber of people over the age of 60 will More than 78 million Baby Boomers are increasing talent gaps for all industriesclimb by nearly 50% by 2050. being followed by a far smaller cohort of only and role types, less desirable work will 45 million Gen X workers, so there will be a become, well, even less desirable. FillingFrom a demographic standpoint, “prime- shrinking pool of prime-aged workers to fill the seats in contact centers is going toaged” workers are 25 to 54 years old. This the gaps. get harder and new strategies to attractgroup has grown significantly over the workers will be needed.
  4. 4 | making the callThere are 7 billion of us, but notenough skilled workers. As populations age,they also decline, and this compounds recruitment difficulties.As Figure 1 shows on the following page, For contact centers, which already have a Increasing populations in developingthere are simply too few children being born long history of outsourcing to places like nations will instead have their own equallyin developed countries to supply the skilled India, it may appear that they have nothing perverse outcomes. Southeast Asia will likelylabor that employers need. The ‘replacement’ to worry about. Yet, higher fertility rates in see its workforce grow by 58% within the nextfertility rate is around 2.1 children per developing countries do not balance out the 30 years. The developing world will likelywoman, and most countries in the developed shortage in developed countries, because have a growing surplus of unskilled labor at aworld are well below this. Instead, across developing countries simply do not have the point in time when the demand for unskilledmuch of the world we now face an imbalance educational infrastructure to convert these labor is actually declining.between the supply and demand of skilled newborns into skilled workers.labor, which employers will have to change Contact center workers require a unique andtact to confront. Even if there were a sudden, miraculous growing set of skills to deliver the kind of rise in fertility rates, the effects wouldn’t service that customers expect and demand.South Korea’s fertility rate is less than half be felt for decades. Babies born today will Turning to unskilled labor pools in otherthe replacement rate, 1.08; Japan’s is take a minimum of 22 years before they enter parts of the world simply will not solve theseslightly higher at 1.26. It’s only in developing the workforce. problems, and instead may compound themcountries where fertility rates are at abundant and create new problems as well.levels—for instance, Nigeria at 4.91, andGuatemala at 3.47.
  5. 5 | making the callFigure 1:Global demographicand social trends The current European Union (EU) nations face Russia: simultaneous high unemployment shrinking labor pools:* and skills shortage. • The number of people aged 20–59 years will Baltic Region: skills shortage and decrease from 208.7M in 2000 to 151.2M in 2050. simultaneous high unemployment. • During the same period, the number of people over the age of 60 will climb from 82.1M to 125.1M. China: rapid labor force growth and a skills shortage. Southeast Asia will see its workforce grow by 58% within the next 30 years. Japan: predicted to be hit hard by labor shortages, and is expected to experience the squeeze first, of all developed nations. India: the number of Australia: expects a shortage of 500,000 Central and South America: high fertility working-age people will workers by 2020. rates and high levels of unemployment, in East Africa (i.e., Eritrea): increase to 335 million addition to northern migration. skilled workers shortage. by 2030, a number almost as large as the total Sub-Saharan Africa: labor working-age population New Zealand: already has shortages South Africa: skilled labor shortage; unskilled shortage predominantly in of the EU and the U.S. of skilled workers in local building and labor surplus. agriculture. combined in 2000.* manufacturing industries. (Local PR).* Source: EU Information—Demographic and Social Trends Issue Paper. Europe’s Changing Demography Constraints and Bottlenecks. Fact Sheet: Living Happily Ever After.The Economic Implications of Aging Societies. Watson Wyatt Worldwide & World Economic Forum. No data provided.
  6. 6 | making the callWe’re more generationally diversE. For the first time,employers are challenged by the phenomenon of four distinct generations comingtogether in the workplace simultaneously. Each generation has its own unique attitudetowards work, and those diverse approaches often result in intergenerational conflict.For contact center environments, this are willing to jump from job to job to The four generations in today’s workforcegenerational mix provides distinct challenges pursue growth and opportunity. Theyand requires transgenerational solutions. can be cynical of, and frustrated by,A quick snapshot of some of the key, tradition and hierarchy. One-third of 33% Generation Xdefining features of the generations Gen X comprises working parents 16% Generation Ydemonstrates this: looking for balance. 2004 7% Silent generation1. Older generations are retiring later and 3. Generation Y and Z (or Millennials) show a 44% baby boomers looking for flexible work to improve their high tolerance to diversity and difference. lifestyle. Most Baby Boomers (80%) will Ambitious and demanding, they question continue to work as contractors or free everything and need constant feedback agents part-time, or for part of the year. at work because they get it in every other 33% Generation X They are typically loyal, strong performers aspect of their lives. If they don’t see a 37% Generation Y and have higher retention rates than good reason for working late or making 2012 3% Silent generation younger employees. a long commute, they usually won’t do it. 27% baby boomers Loyalty to one company is not their strong2. Generation X are the best-educated suit, although they are generally very loyal generation in the workforce today (40% to their profession and the people they have a college or university degree) and Source: Bureau of Labor Statistics work with.
  7. 7 | making the callWe’re more generationally diverse. continuedGenerational differences may pose for flexible ways to stay in the workforce, And there’s another generation waiting inchallenges for employers who want the contact center will no longer be an the wings to make its debut—and they’reoptimal performance from their entire environment that lends itself to a one-size- likely to make the biggest impression in theworkforce. Yet the diversity of experience fits-all approach. Generations will have to largest numbers in workplaces like contactand knowledge offered by four distinct work together to solve problems and deliver centers. So, now is the time to get to gripsgenerational mindsets can provide tangible consistency in service—and management will with managing the generations differentlybenefits, if managed well. have to help them find ways to do this. and to get the best results. This type of diversity isn’t going to go away, it’s onlyWith four generations in the one workplace, Through our own research, when we look going to increase.all working on one (similar) hierarchical level, across the generations we see a pictureand completing the same tasks—but perhaps emerging of a workforce that is morein very different ways—contact centers have a dynamic and flexible. We see people seekingunique challenge on a large scale. greater engagement with work and wanting to reach new levels of skill. They have a moreWith Gen X workers often looking for short- global approach to work; where certain jobsterm payoffs with immediate feedback and can be performed in many different parts ofrewards, Millennials looking for ‘meaning’ the world.in their work and older generations looking
  8. 8 | making the callWe want to be ‘free agents’. Throughout the past decade, a strongtrend has emerged towards building more flexible, project-based workforces. Beginninglong before the current recession, this is a trend that was made possible by moderntechnology allowing people to connect and work together from wherever they are.One of the most important workforce trends The Kelly Services Employment Trends Growth of free agents in U.S. populationof the past two decades has been the rise of Survey undertaken in early 2011 shows that FREE AGENTS 2008EIGHTthe new breed of free agents—consultants, the percentage of the U.S. population that 44% 2011ELEVEfreelancers and contractors. describes themselves as free agents has 26% 2011 virtually doubled from 26% in 2008 to 44% DIRECTLY EMPLOYEDFree agents are not traditional “9 to 5” 56% 2008 in 2011.employees working for one employer. They 74%are untethered, independent professionals Free agents are a growing part of theor consultants, temporary or contract Source: Kelly® Employment Trends Survey, 2011 workforce and they offer benefits toemployees, and they move from project to employers that traditional workforces doproject, location to location. They span all not. They allow employers to expand andages, professions, incomes, and educational contract their workforce quickly according Free agents are generally better educatedlevels, and they are interested in working for to changing needs. So, contact centers that and more highly skilled than the generalthemselves. Free agents prioritize freedomand flexibility over the security of traditional adopt technology solutions, which enable population, so attracting them to contactemployment models, and they are always them to tap into at-home and distribtuted center roles requires removal of the strictkeeping an eye out for more interesting or workers (free agents) can significantly reduce time-and-place barriers that currently existrewarding assignments that afford the best their labor costs. around workforce planning models.work–life balance.
  9. About the AuthorJIM BRADLEY is Senior Vice President, Centers of Excellence (CoE), ProjectPractices for Kelly Services, Inc. He joined Kelly Services in 1996 as vicepresident of the Service department and later added IT Field Development tohis role. In 1999, he was promoted to senior vice president, Administration, until2008 when he became head of Kelly Outsourcing and Consulting (KellyOCG)global operations. Prior to joining Kelly Services, Jim served as director offinancial services for Automatic Data Processing in Roseland, New Jersey. He also worked as aproduct manager for Software Plus in Rutherford, New Jersey. He holds a bachelor’s degree inFinance from Fordham University in New York.About KellyconnectKellyConnect is a global service line of Kelly Services®, a U.S.-based Fortune 500 company anda global industry leader in workforce solutions. KellyConnect® is an innovative, comprehensiveapproach to contact center workforce solutions. The KellyConnect program provides full servicestaffing and management solutions for a variety of contact center environments including customerservice, sales, market research, collections, and help desks.About KellyKelly Services, Inc. (NASDAQ: KELYA, KELYB) is a leader in providing workforce solutions.Kelly® offers a comprehensive array of outsourcing and consulting services as well as world-classstaffing on a temporary, temporary-to-hire and direct-hire basis. Serving clients around the globe,Kelly provides employment to more than 550,000 employees annually. Revenue in 2011 was$5.6 billion. Visit www.kellyservices.com and connect with us on Facebook, LinkedIn, & Twitter.This information may not be published, broadcast, sold, or otherwise distributed without prior written permission from the authorized party.All trademarks are property of their respective owners. An Equal Opportunity Employer. © 2012 Kelly Services, Inc. EXIT

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