How to realize cost savings and talent retention benefits through virtual call centers Featured

9:01pm EDT May 31, 2011
How to realize cost savings and talent retention benefits through virtual call centers

Executives frequently face gut-wrenching decisions while seeking alternatives to cash-guzzling call centers. Off-shoring the work is a popular choice, but it eliminates jobs for U.S. workers and alienates customers who have to overcome language and cultural barriers while conducting phone transactions with overseas agents. Some companies have even relocated centers to lower-cost states or counties, but they are dismayed to find that the move produces only a temporary reprieve from exorbitant turnover and growing labor expenses, as competitors often follow and ignite a recruiting war.

While most executives continue to grapple with the problem, a few innovative companies have solved it by quietly tapping underutilized pools of talent and allowing the employees to work from home.

“The benefits of this model far exceeded the expectations of most firms who participated in our recent study,” says Gloria Gowens, director of Towers Watson’s Rewards, Talent Management and Communications initiatives for call centers. “Retention was so much better that brick-and-mortar cost savings were just the icing on the cake.”

Smart Business spoke with Gowens about the unexpected benefits of deploying virtual contact centers.

What can we learn from studying the success of early adopters?

We surveyed 16 companies, most of which utilized the model for a period of one to six years and deployed 18 to 1,500 home-based workers each. They expected to reap savings from closing or repurposing facilities, but, surprisingly, 75 percent discovered that home-based workers outperformed their on-site counterparts as measured by key performance indicators such as productivity, work quality and customer satisfaction. And, 40 percent found the engagement scores for home-based workers were higher than the scores for their counterparts in brick-and-mortar operations. Turnover of home-based workers averaged just 5 percent to 28 percent, which was an improvement when compared to the attrition rate for on-site agents.

Why is the virtual model so advantageous for talent management?

Essentially there are no boundaries when recruiting home-based workers, so employers can tap less-competitive or even rural areas to source the best talent. In fact, employees only need reliable high-speed Internet service, a quiet space to work and a landline phone, so the talent pool is practically endless. Working from home also attracts non-traditional part-time employees who need flexible hours, like students, teachers and stay-at-home parents, and who often have a hard time finding suitable supplemental employment. Benefit cost for some at-home workers tends to be lower, because they average about 20 hours per week. A key satisfier for home-based workers is that they don’t incur the ancillary costs of working outside the home like commuting, parking and business attire.

Is it difficult to manage a remote work force?

Contrary to popular belief, the data shows that remote workers don’t need constant supervision and in-person bonding opportunities to thrive and, though it sounds like a cliché, these employees have lower absenteeism and are more productive because working from home suits their lifestyle and preferences. New workers can be trained in the brick-and-mortar site, or in a virtual classroom. Thin client technology and automatic call distribution makes it easy to monitor agent activity, add or delete users, and route calls to home-based workers; in fact agents can even bump difficult calls to supervisors. Managers enjoy greater span of control since they communicate with employees via chat rooms, instant messaging and traditional conference calls; in fact, one innovative manager engages his group by holding virtual donut-eating contests. Best of all, some firms found it’s easier to staff difficult split shifts and they no longer worry about phone coverage on snow days.

How can executives assess the viability of transitioning to a virtual model?

Employers should conduct a feasibility study that considers the critical success factors and lessons learned by those with successful deployment experience; include these factors:

  • Structural considerations. Develop the work force configuration model, deployment strategy and the projected costs.
  • People considerations. Establish the desired candidate profile, recruiting and selection strategy, compensation and benefits structure and the performance expectations for remote workers.
  • Process considerations. Consider employee training, scheduling, agent career paths and the communication process.
  • Technology considerations. Assess the equipment requirements, tech support needs and the protocol for system downtime.
  • Management considerations. How will team leaders coach the agents and keep them motivated and engaged?

What are the next steps once the feasibility study is completed?

Employers could launch a pilot program, assess the outcomes and refine the model before scheduling full deployment. Early adopters found that hiring new employees wasn’t the best way to test the model, because it compared the performance of rookies with veterans. Instead, allow experienced agents to work from home during the pilot and slowly integrate new hires, because it simulates a realistic scenario. They also resoundingly endorse the need for structured deployment, as it allows companies to optimize savings by strategically shuttering one call center at a time.

Gloria Gowens is director of Rewards, Talent Management and Communications at Towers Watson. Reach her at (949) 735-2933 or