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Staff Composition

Direct labour costs are the single largest cost element in every call or contact center. In most organizations this cost is 60-70% of the total operating expense. With this level of investment effectively configuring, managing and retaining staff in your center is one of the most important challenges any manager faces.

The chart below illustrates the breakdown of operating costs in a call or contact center.

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Effective decisions related to the mix of staff, their hours, compensation and scheduling has a significant impact on an organizations ability to meet their performance and budget targets. This document will focus on developing the most effective staff ‘mix’ or composition.

When looking at what is the optimal make up of your call center staff we must review a number of factors that drive call or contact volume to the center, these include:

• Hours of operations,
• Call volume by day-part,
• Customer profile, by industry segment
• Desired performance standards,
• Local wage and benefit costs,
• Depth of Knowledge and Training required,
• Company policies related to; hours worked, exempt/non-exempt employees and company and/or state regulations related hours worked as .Full Time, Part-Time or Casual/Temporary staff..

By reviewing the above ‘drivers’ and variables we can get a picture of when customers call, the busy (peak) and slow periods of the operating day, what the local (labour) market supports in terms of wages and what constraints may exist either based upon company policies and procedures of based upon government regulation.

In virtually every call or contact center a mix of staff is employed. Very few centers today operate with only a single class of employees (i.e. full time only). Best Practices vary by center with the most common split being 75% Full-Time and 25% Part-Time staff. In centers with a high degree of seasonality and volatility in their call center volumes you will often see splits such as 40% Full-Time, 40% Part-Time and 20% Casual or temporary.

The benefits of optimizing your staff mix include;

Staffing that more accurately matches call demand. By having the flexibility to schedule staff in smaller hourly blocks you are able to work to four hour (and in some cases 2 hour) minimum staffing blocks, this is significantly more efficient that staffing only in 8 hour blocks of time.

Improved flexibility to ramp up capacity quickly. Due to the nature of part-time or casual/temporary staff, you are able flex up or down their hours to match the increases or decreases in call volume. This improved flexibility also allows you to respond to changes in call volumes and arrival more quickly.

Reduced overall labour costs. Part-time staff generally commands a lower hourly wage than full-time staff. In most organizations part-time staff receives little if any benefits. Both of these factors serve to reduce the overall operating expense in the center.

Reduced staff ‘burnout’. The usual response to high volumes in a center is to try to get the existing staff to work longer and/or handle more calls. While this approach is viable for the short term, it will lead to burnout and staff turnover if it continues over a protracted period of time. The ability to increase part-time staff hours provides and alternative and protects the full-time agents from burnout and the turnover associated with it.

There are some challenges in moving towards a balanced staff mix that must also be considered. These include;

1. Increased training costs. All staff will need to be trained, regardless of the agent class (Full, part-time or temporary/casual). If you move from 100% Full-Time staff to a 50/50 split between Full and Part-time you will increase the total number of agents by 25% and have a corresponding increase in training costs.

2. Due to higher number of total staff, if the conditions which are driving turnover of call center staff are not simultaneously addressed you can see an increase in turnover. This is due to the mathematics of the situation a 25% increase in staff means that if 10 people left last year at a 20% turnover rate (there are 50 agents therefore in the center) and we increase the staff by 25% to 60, we still would lose 20% or 12 staff, with the associated costs.

In fact if the recruiting and hiring processes aren’t adjusted to communicate the correct positioning of the position to part-time staff you can also see turnover of this staff based upon an expectation that they are expecting full-time hours and will leave once they realize they will not get these hours.

The additional cost of training is a cost required to secure the greater flexibility within the call center and this is a one-time expense.

The increased center flexibility can be substantial and provides a more cost effective alternative to extending full-time staff hours. In our hypothetical call center with a shift from 100% full-time staff (earning $11.53 per hour ($24,000 per annum) and attracting a 35% benefits load) to a 75% Full time and 25% part-time (earning $10.50 per hour and a 10% benefit load) structure. Will see a reduction in costs as outlined on the chart below;

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The savings from this change in staff mix reflects a 6.5% reduction in overall center costs, which in our model is over $100,000 per annum.

Employing the model above will also allow the center to better manage spike in volumes which require additional hours and/or staff to handle to the same Service Level. The chart below illustrates the impact of 5% to 20% increases in staffed hours required.

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The use of part-time staff to absorb additional demand hours will cost effectively allow the center to manage the increased demand. Caution must be taken however to only employ this tactically as permanently increasing part-time staff hours to approaching that of full-time will in some states (or company policies) require the movement of the staff from part-time to full-time status.

Similarly this approach can be employed to reduce part-time staff hours if volumes are reduced without impacting the fulltime staff. Reductions in hours that are too severe or longstanding can increase turnover of part-time staff so caution must be employed.

To place the training costs into context; if we once again look at our hypothetical center which employs 50 FTE’s and moves from 100% full-time staff to a split of 75% full-time and 25% part-time they will require 25 part-time staff (Some of this staff may move from the full-time ranks which will shrink by 12 staff). If we assume a three week training program for the new staff the cost of training will be $34,700. This cost when compared to the annualized saving of $104,000 provides a return on investment of under 3months.

The challenges around turnover and recruitment can be limited, mitigated or overcome through addressing both of these issues simultaneously with the implementation of part-time and/or casual/temporary staff. Issues surrounding company policies and/or state legislation require attention to ensure that even tactical increases of part-time hours will not contravene such policies.

The adoption of an appropriate staff mix to your centers line of business, hours of operation and seasonal fluctuations provides a more effective and more efficient call center that is better able to absorb variations in call volumes while still maintaining the Service Level.

Let us know what you think of this article or any suggestions you have for future issues by email at
feedback@thetaylorreachgroup.com.

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