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In June 2022, after rising inflation CEOs continued to rank labor and skills shortage as one of their most pressing external issues. This is expected to continue to influence and disrupt business and talent strategy for the foreseeable future. Within contact centers, this disruption is especially acute. Increased employee turnover and hiring challenges make matters worse as we’re emerging from the pandemic. Increased workloads and long hours, commonly experienced in the contact center environment, result in contact center positions prone to hiring issues and higher than normal attrition in the workplace.
Contact centers have long been a focal point for cost reduction. While historically there have been many incremental opportunities organizations have been able to leverage, the step-change in the use of self-service technology and automated processing has made remaining activities within these departments more and more complex. The increased complexity, paired with stressful work conditions and historically tight wages, has made it even more challenging for companies to recruit from talent pools they’ve typically been able to utilize. Further, and based on our experience, many companies are reluctant to post higher wages in the marketplace, fearing potential earnings impacts across broader operations.
Outsourcing, then, has become a top priority for many organizations currently exploring how to implement or expand outsourcing in the short term without extensive organizational transformation. While many are able to implement creative solutions with world-class partners, taking a minimalist, last-ditch approach increases challenges to short-term staffing. Most organizations delay hiring or outsourcing until they receive too many complaints or when peak season requires “surge resourcing” (anywhere from 25–500 individual contributors) plus contact center, claims agents, or other resources at short notice.
While outsourced models can provide flexibility, most outsourcers run on tight margins and typically have limited unutilized (“bench”) staff available on short notice. Typically, contact center and related outsourcing providers plan portfolios of clients two to three years in advance of ramping up resources. Outsourcing providers align the seasonal demands of their portfolios and constantly move individuals across accounts to ensure their staff are highly utilized. Further, when outsourcing providers hire, they often target limited seasonal work to maintain a positive image in local markets as a desirable employer. If outsourcing providers must hire seasonally, they often pay a premium that further inflates cost to their clients.
If your organization is considering outsourcing due to the current talent crisis, we recommend leveraging existing relationships to identify outsourcing providers with available, capable resources to address the business need. For example, if potentially augmenting staff for accounts payable, consider your collections provider. If it’s customer service, talk to your IT help desk provider. If you’re unable to take advantage of existing relationships, it’s likely that a solution will require carving off part of the business for a longer term (a two- or three-year contract) to establish a new outsourcing provider relationship that is positioned to help your organization with staffing challenges caused by the current unpredictable talent outlook and future talent challenges. If this is the most likely route given organizational circumstances, increasing the likelihood of success engaging an outsourcing provider will require considerations including variety of talent, location costs, time or language differences, and year-round/seasonality availability of staff.
Author: Jaden Herrin
Consulting Managing Director | C&M DC US
Deloitte Consulting LLP