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New Study Shows Contact Centers Feeling the Crunch in Slow Economy

October 01, 2008

The downturn in the economy has not escaped the contact center industry. While this industry has traditionally experienced significant pressure to improve operations while reducing costs, the intensity has been increased as consumer spending habits have changed and companies are feeling the effects of reduced revenues.

According to research carried out by ContactBabel (News - Alert), the contact center industry is feeling the increase in pressure. Organizations throughout the world are implementing salary freezes, while suffering high attrition and absentee rates.

“The UK Contact Centre Operational Review - 6th Edition (2008)” is a survey of more than 200 U.K. contact center operations and their HR, technological, strategic and commercial issues.

When evaluating the HR side of the contact center, the study showed that new agent salaries have experienced a slight decrease in 2008; attrition has stayed at 30 percent, with finance and telecoms experiencing the highest levels overall; and a lack of upward opportunities and low pay driving high attrition.

ContactBabel also found that only 13 percent of contact center staff leaves their current center to work in another contact center; 81 percent of respondents indicated they were looking to increase headcount in the next year; and recruitment and growth is seen as the number one issue for contact centers.

Steve Morrell, the author of the report, commented in a ContactBabel statement: “There are contradictory pressures on the UK contact centre industry where HR is concerned. As ever, attrition is a problem for most operations, and worse, most departing agents do not move between contact centers, and their skills and experience are completely lost to the industry. In addition to this, the majority of contact centers are planning recruitment drives in 2009.

“Yet agent salaries are not increasing - in fact there has been a very slight decline in average starting salaries since 2007 - and this is shrinking the labor pool further. There is a danger that contact centers will have to lower their recruitment standards to meet their headcount targets, which would have the double negative effect of lowering quality and increasing attrition.

“However, the current economic crisis and concerns about future employment prospects may well reduce attrition rates as employees in general will become more risk-averse, preferring to stay in their current role.”

It is still unclear as to how the overall economy will impact the contact center industry in the long term. The reality is that companies are still fighting for differentiation in the market and their customer service levels play a large role in that, requiring that they place priority focus on their contact centers.

It is still anticipated that many contact centers will continue to morph into revenue centers as agents will go from customer service representatives to customer sales professionals. As it becomes even more essential to lower the cost of contact center operations, the argument for the transition to sales becomes even stronger.  
 
Don’t forget to check out TMCnet’s White Paper Library, which provides a selection of in-depth information on relevant topics affecting the IP Communications industry. The library offers white papers, case studies and other documents which are free to registered users. Today’s featured white paper is The Compelling ROI Benefits of Contact Center Quality and Performance Management Technologies, brought to you by Voice Print International (News - Alert).

Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com. To read more of Susan's articles, please visit her columnist page.

Edited by Tim Gray

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