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White Paper: Assessing 'In-House' versus 'Out-House' Call Center Agents: The Good, Bad, and the Downright Dirty

by Thomas Christenson, President, Contact Center Solutions, Computer Generated Solutions, Inc. - September 8, 2014

White Paper:

 Assessing ”In-House” versus “Out-House” Call Center Agents: The Good, Bad, and the Downright Dirty

By Thomas Christenson, President, Contact Center Solutions,
Computer Generated Solutions, Inc., tchristenson@cgsinc.com, cgsinc.com 


Who answers when customers call your contact center? Are the agents full-time employees in a secure, controlled, professional environment? Or are they at-home, independent contractors working in bunny slippers and pajamas from the “comfort” of a “home office,” extra bedroom, or … bathroom? (Don’t ask). Today, most callers can’t see whether agents are dressed in business casual, Wolf of Wall Street chic or couch potato grunge, but they can hear the barking dogs, the neighbor’s kids, the plumbing, the lawnmower or Days of Our Lives in the background. Your customers can and do hear EVERYTHING in the background and it impacts their experience with your brand.

Fundamentally, callers care most about the knowledge and helpfulness of agents and how quickly the agent can resolve their issue. So is there really a difference between “In-House” versus “Out-House” agents? Is one better than the other? In most cases, yes and in-house is better – despite the counterarguments you’ll hear from firms that rely on the out-house model.

For basic customer service requirements the at-home model can sometimes be appropriate and very successful. But it is not a one size fits all solution – and this is especially true when you factor in privacy and compliance concerns when agents handle sensitive customer information or when the nature of the call is technical or specialized.

The objectives of this white paper are to shed light on the true history of the out-house model; detail some of the good, bad and dirty results from out-house agents; and finally to help your organization make an informed decision about how to leverage the model, if at all.

A Little History Lesson: How Did Agents End Up in the Out-House?

There’s a simple answer: economics. Traditional call center vendors sent agents home for two reasons:

· They Ran Out of People – Around the mid-90s, the trend was to build call centers in lower cost third and fourth tier cities in the U.S. Typically, 500-1,000 seat centers were built in cities with populations fewer than 100,000. After factoring demographics, commute times, skills and desires to work in a call center, that leaves a total work pool of 5,000-10,000. Predictably, within 10 years those call centers churned through all the possible employees that could commute on a daily basis. Simply put, they ran out of people. These massive facilities have now been converted to “universities” or “centers of excellence” for the region and they bring in new agents for training and refresher courses from hundreds of miles around.

· They Ran Out of Space – Another reason traditional vendors embraced the out-house model is that they ran out of space and sending agents home was less expensive than investing in additional real estate and infrastructure in the U.S. market. In fact, many out-house vendors actually classify these agents as “contractors” requiring them to purchase their own computers, telephony and Internet access even though they do not provide basics like healthcare insurance or a guaranteed number of work hours! This reduces cost overhead for the vendor, but is it the best approach for the client, agent or customer on the other end of the line?

Newer competitors who are exclusively focused on the out-house model entered the market after innovations in the cloud enabled “virtual” contact centers. They were started by executives from traditional vendors who were really good at selling the low capex concept to private equity investors. They are committed because their investors are committed.

Either way, regardless of how the vendor got started with this model, the results are the same.


The “Good”

At-home evangelists have perfected their sales pitch for the out-house model:

· Purported Higher Skilled Labor – The premise here is that people who work from home are often spouses or stay-at-home partners and are better educated than a traditional contact center employee. When you actually say that out-loud it sounds pretty terrible and dubious. So, we tested it. When CGS posted a job listing for the same role, same salary, same metropolitan area with at-home versus in-office as the only differentiator there was no statistically significant difference in the degree of experience or education in the populations that applied. Myth debunked. In fact, we got twice the number of resumes for people who wanted an in-house position. So selection criteria could certainly be more stringent when hiring agents.

· Potentially Flexible Capacity – The evangelists will tell you that behind every out-house are three to four times the number of people that would otherwise be in a cubicle. Probably true. Theoretically, the capacity would be there to flex up. Realistically, if at-home agents are comfortable with flexible schedules or “school-friendly” hours when their house is quiet – how realistic, or sustainable is it to expect them to change their hours or work extended hours? Will the flexible workforce be there during holiday season or will they be shopping? What about during vacation time in July and August? If the job is more of a distraction or something to help pass the quiet time, what happens when it’s inconvenient for the “well-off” at-home agent to log in because the Viking repair technician is at the door (again)? If the job is truly that much of a “luxury” then how committed is the agent? When an out-house agent is pushed to the limit, the results can get dirty.

· Supposed Physical Disaster Recovery – Call Centers are built with extreme redundancy – back-up generators, hardened data rooms, etc. They are up 99.99 percent of the time and have 24x7 IT staff on premise to address any problems. Call centers also have detailed disaster recovery plans (which may include at-home capabilities). An at-home agent relies on cable or telephone company broadband. Enough said. When considering this as a positive selling point for the out-house model, make sure your vendor shares the data about where your agents are actually sitting. If they are all within one metropolitan area and that area has a black-out, you’d be better off with a physical call center – and so would your out-house agents, it can get dirty in a disaster.

· Alleged “Greener” Business Practices – Most corporations have a commitment to “green” initiatives to lessen their impact on the Earth and reflect the needs and passions of their customers and investors. Working from home sounds like it reduces the carbon footprint by eliminating a commute. Well, each out-house agent is now lighting, heating and cooling their entire home rather than adjusting the thermostat for efficiency in a central working environment. Each out-house agent is now making a special trip for groceries and supplies that otherwise would have been part of a daily commute. The abandoned call center that is now a “center of excellence” is still being lit, heated and cooled. Studies have shown that density enhances efficiency (http://www.fastcoexist.com/3024554/visualized/a-map-of-the-carbon-footprint-of-all-31000-zip-codes-in-the-us).

Admittedly, an at-home model can work when the agents are simply assisting callers with activities that callers could do for themselves on a good website. Either the callers don’t want to do it themselves or they may not be Internet savvy. Regardless of the reason, at-home agents are simply facilitating a simple process. This very basic and generic customer care has the best potential of success in an at-home model, especially if no personal information is passed from callers to agents. At best, one should be skeptical of the “good” that is proselytized.


The “Bad”

While out-house vendors hype the “good” potential outcomes discussed above, it’s important to realistically assess areas where the at-home model is challenged. Several of these areas are key differentiators between a high-quality and low quality customer experience despite the sound of a dog barking in the background:

· Less Engaged with your Brand – CGS has extensively studied the impacts of agent engagement with our clients’ brands. The more our agents are aligned with the brands they support the higher the C-Sat scores. You need your agents to be a part of your corporate culture. Assess your own corporate culture, if your best workers are remote then perhaps your brand can embrace and engage at-home agents. If your own experience is mixed then your experience with your at-home agents will likely be a complete failure. Call centers provide dedicated space, brand aligned initiatives and an extension of your corporate culture – it is this environment that creates effective Brand Ambassadors.

· Impersonal Coaching and Mentoring – Who was your most influential or effective mentor? Most likely it was not an avatar or a voice on the phone. People learn from people. Coaching, mentoring, managing escalations, etc. are all critical components of developing super agents and delivering high quality contact center experiences. A work-at-home agent experiences the vast majority of their feedback remotely and without effective coaching or mentoring they rarely improve the quality of service they deliver.

· Weaker Technical Expertise – Specifically on technical queues – but also on any dynamic queue with evolving policies, new products and rapid changes – it’s important to be able to conduct on-the-spot training. A robust knowledge management tool is critical to the success of any contact center agent, but it is not a replacement for a team huddle or an impromptu learning session to walk through a new feature or policy. As such, supporting technical products and services presents a significant challenge for the out-house agent model.

· Zero Team-Building – Contact centers are all about building community. The best centers have social events, charity drives, friendships and engagement activities to build spirit, camaraderie and excitement. A lone agent working from home rarely has any of these opportunities.


CGS has conducted several tests with at-home agents. We regularly test our disaster recovery models (which include at-home capabilities) and we often extend some of these tests to fact-check our gut. Approximately 80 percent of the time we send an agent home for more than three months that agent sees a 10-20 percent reduction in quality and efficiency. We’ve also heard from customers who have experimented with the at-home model. In one test, they sent home their top 25 percent of agents. In less than six months those agents were re-ranked into the second or third quadrant.

In all cases when we interviewed the once “super agent” about their experience and performance we hear that the agent felt isolated. They were lonely. They didn’t feel challenged. They didn’t feel “on their game.” The fact is, they missed the community, the team and the daily interaction with colleagues and mentors.


The “Dirty”

At the risk of pushing the metaphor too far and being too cheeky, an out-house model puts your organization at far more risk of a very messy situation.

It’s the two words that any CEO fears most: DATA BREACH.

In a world where hackers make weekly headlines breaking into systems - stealing credit card, social security and telephone numbers, email addresses, dates of birth, and other personal information – security is paramount, regardless of industry. Contact center vendors are equally vulnerable to penetration and attack.

Traditional in-house contact centers have strict privacy procedures to meet PCI, HIPAA, ISO 9001, and other industry security regulations. These requirements go beyond data security and server security to include physical security procedures. All secure contact centers require agents to walk in the door and immediately drop off their personal items – including cell phones – before they go to their desks. In-house agents have no pens or paper at their desks, so they cannot copy down customer information, nor do they have their cell phones to snap a photo of the screen.

Now imagine the same customer support transaction handled by an out-house agent. Pens and paper are readily available. A cell phone with a camera and video recording devices are at arm’s length. Your customer’s credit card numbers, address and phone numbers spoken aloud or on-screen, clearly visible to an agent’s kids, neighbors, and cleaning person. Over the course of two weeks, a single out-house agent could capture 500+ valid identities. In the work-at-home environment, there is nothing to prevent the theft of personal customer data. Period.


Making an Informed Decision: A Guide to Asking the Tough Questions

Is the at-home customer support model right for your business? What are call center vendors really offering you when they push you toward at-home agents? Here are six key areas to explore with your potential out-house vendor – and questions for you to consider – before you sign on the dotted line:

1. Why is the vendor pushing the out-house?

Really understand the vendor’s motivation. Are they pushing the model out of necessity? No more room? No qualified agents nearby? Activist private equity investors? If you know why the vendor is pushing the out-house you will be better equipped to ask the next several questions and to understand their true intent.


2. Can the out-house vendor provide real data about the agents that will be on your team?

Since you will be sold the virtual model without the benefit of meeting any actual agents (they are all at-home, remember…now that’s a tough site visit!) you need data. How many are contractors? How many are employees? What are the terms of the contract between the at-home contractor and the vendor? What is the real education and experience level of the agents? How many are part-timers? What is the real attrition rate (people, not FTEs)?


3. How does the out-house vendor engage their at-home agents and build teams and affinity with your brand?

What is a week in the life for an at-home agent? How often do they physically engage with their manager? What about other employees? How does the vendor supply at-home agents with branded trinkets and baubles?


4. Can you do a site tour with your at-home agents?

What tools and mechanisms does the vendor provide so you can see your agents? Can you monitor not just their voice and screen, but also their environment? Can you randomly “remote in” to see an agent working from their home “office”? What is the audit policy of the vendor to inspect their at-home agents’ work environments?


5. How does the out-house vendor provide training, mentoring and coaching to at-home agents?

It’s a red flag if the vendor replies that training is only provided electronically through an online “virtual classroom” versus direct, live coaching or instruction. Online training has its merits, but it cannot replace the advantage of agents learning from experienced customer support experts providing immediate, live feedback.


6. How does the out-house vendor ensure data security?

You and your IT teams know how to assess a traditional contact center for data security. Check certifications, visit the site, stress test IT systems, etc. How can you satisfy yourself that the out-house agents cannot and will not steal data from their secure terminals? How can the vendor provide the same degree of security in the physical environment at home as in office? How many additional pipes and access points are created by creating VPN tunnels to hundreds of individual homes? How do you keep your CEO out of the Wall Street Journal with the headline, “10,000 Credit Card Numbers Stolen – A Suspected Inside Job; At-Home Agents Photographed 100s of Numbers a Day for Two Weeks”?


Conclusion: What’s best for your business?

When your customers engage with your contact center, you want them to deal with a trained, enthusiastic, professional person who can solve their issues. Know your customers and their expectations for support and the agents’ levels of product knowledge or technical expertise. Consider your potential liability for regulatory compliance in terms of keeping sensitive customer information secure and away from unauthorized eyes. Most of all, ask your existing or prospective contact center vendor the tough questions – and if you get any red-flag answers, you may want to move cautiously as the out-house could get stinky.



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