Understand customer experience organizations’ objectives, the challenges they face and the programs in place to deliver a seamless experience when customers reach out for support.
View The Webinar
Transcript
James Cammareri (00:00):
Hello everybody. And thank you very much for joining us for this Global Benchmarking Series webinar. My name is James Cammareri from COPC and I’ll be your host for today’s session. Today is one of an ongoing series of webinars where we invite leaders and experts from COPC, in this case, Fredrik to delve into our research, and to share their views and opinions on some of the most interesting findings from our Global Benchmark Series reports.
James Cammareri (00:26):
These reports, as many of you know, are published on a monthly basis and will cover a range of topics such as contact center technology, contact center outsourcing, recruitment and hiring, employee experience, and many more. Today’s session will be focused on contact center outsourcing and joining me today is Fredrik af Klercker, Director of Vendor Management and Performance Improvement from our EMEA region. Hi Fredrik.
Fredrik af Klercker (00:51):
Hello everyone.
James Cammareri (00:54):
All right. Before we get started, let me just cover some quick housekeeping items. During the session, the attendees will be muted, but you will be able to submit some questions because we’re going to have a Q & A session at the end of today’s webinar. That’ll include about 10 minutes after the presentation to field those questions. So feel free to submit as we go. There’s a Q & A button down at the bottom of the Zoom call. As some of you may already be familiar with COPC, I’ll just take a quick moment to introduce our organization.
James Cammareri (01:32):
COPC is a global consulting firm that’s been around since the mid-90s, and we are relentlessly focused on creating meaningful customer experiences and optimizing business outcomes. We do this for some of the largest brands in the world with a focus on guiding them to continuously improve their operations that support the customer experience. As we’ve listed here on the right-hand side of the slide, our solutions include: performance improvement in strategic sourcing, consulting, training, individual and organizational level certification, and research.
James Cammareri (02:03):
The suite of services is all based on the COPC customer experience standard, which is a performance management and quality management framework covering the best practices and CX operations for in-house and outsource businesses, as well as for vendor management organization. The standard is governed by an independent standards committee made up of some of the most well-known global brands who might update and maintain the document. Many high-performing organizations follow, are compliant with, or even become certified to the standard. And just so you guys know we are a global company. We have consultants in 19 countries and conduct hundreds of operational improvement engagements, all based on the COPC standard and framework every year.
James Cammareri (02:45):
Okay. So let’s jump into some of the more interesting findings from this month’s Global Benchmark Series report. Just a quick reminder to everybody. This is a global report. We’ve been seeing a lot of excitement about the data that we’re getting and we’re getting quite a few questions about the geo-specific results. We’re happy to talk to people individually about questions you might have regarding the results specific to your region and what you might actually be seeing in your area. Just keep in mind that today we’re covering the trends and how they are affecting the entire world. So this is a global report you’re seeing today.
James Cammareri (03:22):
Fredrik, thanks again for joining us and for being on this session with me today. In this first area, we’re discussing global business processes and we’re focusing on the ongoing growth of the outsourcing industry. We’re seeing consistent growth from 2016 through the present and are expecting that same level of growth for the next several years. Does anything that you’re seeing in this data here surprise you?
Fredrik af Klercker (03:47):
Well, one of the things that is interesting to see is that even though digitalization of interactions with customers is expected to continue and moving interactions away from the humanities channels, we still see a clear growth in the BPO market. And BPOs are investing in technology, and most likely those investments will pick up some of that volume shifted into the digital space.
Fredrik af Klercker (04:20):
Also, brands are continuing to outsource operations and turning their focus into their own business processes and improvements, and their own core competencies. In this growth, we see quite a continuous challenge for BPOs to keep up with the growth while at the same time supporting the clients and maintaining high quality and greater customer experiences.
James Cammareri (04:50):
Yeah. I mean, I don’t think it’s anything surprising here, right? We’re seeing this growth continue. We expect it to do so over the next few years. And that really brings us into this next area, which is from a BPO view on why clients are outsourcing. So what key findings did you make note of here, Fredrik?
Fredrik af Klercker (05:11):
Well, looking at it from both the BPO view and the clients’ view, it’s quite well-aligned. So the main drivers being cost reduction and flexibility in ramping up and down. So we don’t really have the answer here. If that cost reduction is expected through… Is it reduced labor cost? Is it reduced volume through service during improvements, deflection to digital channels? We don’t have that information available at the moment.
Fredrik af Klercker (05:42):
It most likely will be a combination all of them. The clients rate technology capability a little bit higher than the BPOs. And there’s certainly a big interest in getting the BPOs support in actually transforming that and getting that shift into the digital channels.
James Cammareri (06:07):
I guess one key factor here might be thinking about the larger outsourcers, right? One of the interesting points here is that larger outsourcers tend to… Larger client brands, excuse me, that are outsourcing a larger portion of their business, tend to own the technology. So I’m wondering how that might affect some of the results we’re seeing here in the research.
Fredrik af Klercker (06:28):
That could be an issue of course, but being the larger brands tend to own their own technology, it might be that we might see a shift going forward with the investments that the BPOs are doing. So it’s going to be interesting to see that going forward.
James Cammareri (06:47):
Okay. And as it relates to the key objectives of the BPOs over the next 24 months, what is our research telling us here, Fredrik?
Fredrik af Klercker (07:00):
Well, we’re seeing that improving service journeys is on the top of the key objectives. An interesting note on that is that’s certainly not something that the BPO will fix themselves. It’s a joint effort together with the client and quite depending on the clients’ capability and also will to change in anything from business processes, policies, or even its products and services. The BPO will certainly be a vital source of customer insights and business intelligence to help the clients to identify where there are improvement opportunities to find.
Fredrik af Klercker (07:42):
And as mentioned, we also have this new technology here that there are quite substantial investments from the BPOs at… And part of that is set to pick up those interactions going from you and assisted channels into digital and as an alternative revenue stream, and definitely supporting the multichannel service journeys in a better way. One thing to note here is that with the last two years in changes in customer behavior, in many ways due to COVID, forecasting has become a real challenge. And seeing that at the bottom here is the question then being, is it getting enough attention for the future?
James Cammareri (08:35):
Yeah, I think some of the additional information we’re going to see here coming up will shed some light on that. But yeah, it’s a great question. Doesn’t seem like it at the moment, does it?
Fredrik af Klercker (08:49):
And then… Sorry.
James Cammareri (08:51):
No, go ahead. To that same degree, as it relates to the key challenges faced by BPOs, improving CX continues to be the largest, the biggest challenge for them.
Fredrik af Klercker (09:02):
Yes. And as just mentioned, when we look at service journeys and the customer experience, it is in many ways, a joint effort together with BPO together with the clients. An important thing here is to note is that the difficulty in recruiting staff, training and development, and staff turnover is quite high on the agenda. And that definitely impacts the BPOs abilities to consistently deliver the quality and achieving that high customer experience. And in the end, also impacting and managing the cost of attrition.
Fredrik af Klercker (09:40):
So we would expect to see a quite strong connection here in the difficulty of recruiting staff and staff turnover with staff engagement and how that relates to each other and how the BPOs can manage both maintaining their existing staff, and then also recruiting new staff to manage the growth that we’re seeing as well.
James Cammareri (10:08):
Great. Okay. And so as it relates to the people management section of the research, let’s peel the attrition issue back a little bit here, and I think over the next few slides, we’re going to get into some of this. It seems we… In this first one on frontline staff, we have a disconnect from the answers we got in the survey and what we’ve actually seen in our own COPC benchmarks, meaning what we’re actually seeing in consulting and certification work, we’re doing with our clients operations.
Fredrik af Klercker (10:42):
Yeah. Yes. We can see to the left that 19% of the BPOs are reporting in here that they lose more than 60% of their staff on a yearly basis. That being 60 out of every a hundred is shifted every year. It’s quite a number, but looking at the benchmark data, as you mentioned, when we are out auditing organizations, we have a medium of 87% attrition. And in this data, we see 25.
Fredrik af Klercker (11:13):
So there is certainly a disconnect. We can’t answer exactly where that comes from in this report. Looking at the challenges the BPOs do face in recruiting, retention of staff, this is quite an important area. And so it’s a little bit of a question, or if the BPO executive view here, is it in line with the actual operational performance? We can’t say really.
James Cammareri (11:48):
And again, continuing with this area of attrition, the trends that we’re seeing, and more specifically, what are the trends around attrition in the last 12 months, Fredrik?
Fredrik af Klercker (11:57):
Well, we come to that a little bit going forward, but looking at the attrition from… Sorry.
James Cammareri (12:09):
Sorry. Are you seeing my screen, Fredrik?
Fredrik af Klercker (12:18):
Yeah. So in the beginning of COVID, we did indeed actually see a reduction in attrition, so 2020. But we are seeing that it is climbing back to more pre-COVID numbers. And as the report here suggests that 45% of the respondents are seeing a slight or significant increase in attrition at the moment.
James Cammareri (12:51):
Okay. And here with team leaders, a similar disconnect?
Fredrik af Klercker (12:56):
Yes. So looking at the benchmark that we have from our operational audits, we see 70% and 10% here. So there’s certainly a disconnect in the data in that sense. Yes.
James Cammareri (13:13):
Okay. And I do see a few questions popping in. We are gathering those everybody. So we’ll absolutely answer those as we get towards the end of the session today.
Fredrik af Klercker (13:30):
Yeah. So diving into-
James Cammareri (13:31):
[crosstalk 00:13:31] And how about absenteeism, Fredrik? Sorry, go ahead.
Fredrik af Klercker (13:34):
Yeah. Well, we would expect to… The numbers we see here with COVID restrictions and COVID-related sick leave being a big part of the 50% that is over five days, but it’s quite worrying to see that 25% are reporting that they have an average as high as over 10 days and even more than 20, 13%. And 35% of the BPOs now also indicate that they’re seeing an increase in the overall absenteeism.
James Cammareri (14:13):
Interesting. Okay. And again, still within this people management section of the research and really over the next few questions we have in here, lets dive into the impacts of work at home. What are we seeing here in this illustration?
Fredrik af Klercker (14:31):
We have certainly seen an increase in work at home in the industry. Mainly driven or maybe accelerated by COVID. So 71% of the respondents say the BPOs state that they do have staff working from home and out of those, 88% are frontline staff. Interesting to see that support functions have a lower percentage working from home. If that is due to access to tools, or is it the need to work closely together or processes that just don’t allow it. We’re not sure, but it’s an interesting thing to see.
Fredrik af Klercker (15:22):
So looking at work from home has presented some new challenges for sure. And technology continues to be one of the biggest ones. And connectivity, or when that happens, PC issues, how quickly can the agents actually be back online to service the customers? So being dependent on outside factors like internet providers or not having access to the agents’ PCs, you can’t put hands on it and actually fix stuff. That does tend to impact the resolution times certainly and also the operations.
Fredrik af Klercker (16:04):
So that has proven to be a challenge for many organizations. Also, interesting to see here that employee engagement is one of the bigger challenges. We do see that there is a need to spend more time with each agent for coaching and feedback when working from home. And in many ways, maybe also just a check-in, because that social connection that you get being in the office in the brick and mortar setup, you lose that. Having connection to your team and your team leader in that sense and in some way, shape, or form that has to be replaced and spending more time with the agents. And that also actually impacts the available time for the agents.
James Cammareri (16:58):
Sure. Yeah, re-creating those ad hoc sessions you’d have at a team leader’s desk or the ad hoc sessions you’d have around the water cooler in the break room, obviously continues to be an important piece here as we’re seeing in the employee engagement numbers. Also, some of the things that organizations have been telling us, not only in research but in our own engagements with them, is that connectivity issue. What percentage of them are actually ready to go on day one out of training continues to be an issue. And so we’re seeing that reflected in some of the data here as well.
Fredrik af Klercker (17:30):
Yeah. And-
James Cammareri (17:34):
[crosstalk 00:17:34] Something a little surprising… Sorry, Fredrik. Something a little surprising in the results here as it relates to CX operators post-COVID.
Fredrik af Klercker (17:42):
Yeah. So we certainly see in the graph to the left that we have had a significant shift in the number of deployed agents in the work from home environments. And 72% of the BPOs state that either they’re going to continue that way or have not yet decided. And that 34% that is not sure, that is quite a worrying number if that indicates that they don’t yet have a plan, on a strategy in place for how to continue or not.
James Cammareri (18:23):
So 30… So what this is telling us on the right-hand side is that 38% expect to stay in a work from home model, 28% expect they’ll go back to a brick and mortar or at least some form of brick and mortar, and 34 don’t have a plan.
Fredrik af Klercker (18:39):
Yeah. And that 34 is certainly a worrying number.
James Cammareri (18:43):
Yeah. Okay. Okay. So switching gears over to… From a strategy perspective, how about on the vendor management side of things? Interesting findings here when asking client organizations about their formal VMOs to engage with their outsourcers.
Fredrik af Klercker (19:01):
Yeah. So we can see that about half of the respondents here indicate that they do not have a dedicated VMO setup or a vendor management organization for managing their BPOs. This could suggest that there can be a lack of clarity in many organizations, of ownership, of vendor relationships and potentially impacting the clients’ capability to drive BPO performance, be that quality customer satisfaction cost, et cetera.
Fredrik af Klercker (19:35):
What we do see is that the research indicates that organizations that do have a dedicated VMO are 1.2 times more likely to be satisfied with their vendors. So having that structure and that formal setup in managing your outsourcing partner seems to be quite important to get that relationship really running smoothly.
James Cammareri (20:02):
And are we seeing different approaches to the commercial models?
Fredrik af Klercker (20:07):
Yes. The most common one is after you close, FTE model closely followed by per contact or interaction, 15% state that they use more than one model. One of the things that we were expecting was to see a larger deployment of risk and reward schemes, so performance driven schemes. Interesting also to see that clients that do have a dedicated VMO team are two times more likely to use that kind of setup. So that is an interesting reflection and it could be at the high percentage of FTE model could be that there’s quite a large number of smaller programs outsourced where an FTE model is quite appropriate.
James Cammareri (21:00):
Understood. And those that know… So COPC know that we always want to know about CSAT and performance and in this case satisfaction with outsourcers performance.
Fredrik af Klercker (21:13):
Yeah. And it’s interesting to see that only 46% of the clients are actually happy with the BPOs and the relationship. Interesting to note that those that have higher frequencies in business reviews, meaning have a tighter and closer and more frequent relationship and having more frequent conversations with their BPOs are actually happier. 1.3 times more satisfied with the relationship. So having that tight relationship, having that those close conversation is quite important to drive the relationship forward.
James Cammareri (21:58):
Very interesting. And of course, employee engagement, employee satisfaction and retention here.
Fredrik af Klercker (22:07):
Yeah. So we can see that only… Yeah, if that’s the right word, but only 64% of frontline staff state that they are actually satisfied with their jobs. And 70% say that they’re likely to continue with the current organization. With the challenges we saw earlier in the presentation with recruitment and retention of staff, this is something to really take note of. We can certainly see that staff satisfaction and staff retention has a clear linkage. So this is a focus area that many should maybe take even more seriously.
James Cammareri (22:51):
Okay. And obviously related to that obviously is performance reviews and one-on-ones.
Fredrik af Klercker (23:00):
Yes. So we can see in our research that the more regular, well-performed performance reviews do drive employee satisfaction. That drives engagement and that has a clear impact on improving attrition numbers. So really having a well-structured approach to really making sure that you have these reviews and also making sure that it’s really well-performed and gives value to the employee.
Fredrik af Klercker (23:33):
It’s quite clear that the more regular reviews, the higher the employee satisfaction. As I said, having that challenge with recruitment being one of the major concerns for BPOs, and of course, attrition had a fundamental impact on recruitment on top of the need for recruitment, for growth. So this is certainly another key area to focus on.
James Cammareri (24:07):
Great. Okay, Fredrik. Great job getting us through some of these questions. Obviously, we had limited time today to get through all of the key findings, but can you summarize a little bit here for us Fredrik, and what the conclusions we’ve found in this month’s survey?
Fredrik af Klercker (24:26):
Yeah. So certainly we can see the BPO market is drawing and continued outsourcing driven by the cost reduction and the flexibility. Also, the clients wanting to focus on their core while outsourcing operations. Noteworthy is the BPOs area focus on improving service journeys and the customer experience and having that collaboration and being the source of information to the clients to actually help clients improve for their customers. And of course, the deployment of new technologies to support the multi-channel strategies of their clients. Looking at recruitment and staff retention. Again, this is a challenge. And certainly, we are keeping up with that growth number as well.
Fredrik af Klercker (25:21):
The work at home with the dramatic shift we have had and the growth of that and the new challenges and the changes that BPOs have had to do in ways of working, in terms of how do we set up the technology? How do we maintain that? How do we get agents ready to actually do the job? And certainly, the area around staff engagement and really getting the agents connected to the organization. And interesting also the finding that clients with formal vendor management organizations do have a tendency to be more satisfied in the relationships.
James Cammareri (26:08):
We do have… By the way, thank you so much Fredrik for the overview and for the conclusions here. We do have quite a few questions that have come in. So I’ll start with the top two, and then we’ll see how much time we have to get through them. So the first question is, which payment model is best? Does COPC have a recommendation?
Fredrik af Klercker (26:30):
Well, there is no one size fits all in this, that’s the short answer. Whatever payment one chooses, it has to be fit for the purpose of the business and the typical program that you have outsourced. But for example, in very small programs, the FTE model is probably a good solution. In some cases, you even staff just to have availability. While in larger, more mature programs, per contact or per minute might be more appropriate. Certainly, it differs depending on, is it the sales program that’s differing from other programs, if it’s service… So there’s no one size fits all. At COPC, we do help organizations to go over contracts and advice on what model would be appropriate in different circumstances.
James Cammareri (27:33):
And Fredrik with your experience on the vendor management side. I know we are seeing this more and more with clients we’re talking to… Results-oriented models, meaning much more about driving results versus metrics. Right?
Fredrik af Klercker (27:51):
Yes.
James Cammareri (27:51):
Gotcha.
Fredrik af Klercker (27:51):
Yeah.
James Cammareri (27:51):
All right, so another quick question is at what size of operations is a formal VMO recommended, vendor management organization?
Fredrik af Klercker (27:59):
Well, again, there’s no real line in the sand here. It’s quite a lot about what level of control you want to have. When you do find that you have multiple people in your organization, interacting with the vendors on topics like quality training, workforce management, skills verification, et cetera, you might want to add a bit more formal structure to it, clear processes in place to get clarity on roles and responsibilities within their own organization.
Fredrik af Klercker (28:31):
Also, clarity in the split of responsibilities between you and your vendor. We see certainly VMO organizations of all sizes. It can be from just one or a few persons to hundreds, depending on the size of operations you outsource. It’s also a little bit related to what kind of BPO you actually have contracted with. If you have one of those that has more capabilities, you can actually outsource more of the shared processes as well. Meaning that you can actually streamline your own organization a little bit more. So it’s a little bit depending on the level of control and the complexity of the work that they outsource and what type of BPO you actually have a contract with.
James Cammareri (29:22):
Okay. All right. Now here’s one, also on the VMO path that says it was stated that BPO with VMOs are 1.5 more times satisfied with BPO. Was there any cost-benefit analysis to support that? Fredrik, I’m not sure if we have access to that.
Fredrik af Klercker (29:42):
No, I do not think that we have that information. Sorry.
James Cammareri (29:46):
It’s a great question. I think what we’ll do with that is to gather what we can and share that back with the person who asked with this entire group. One other more on the technology side, Fredrik, is a question of are organizations willing to take BPO providers, call center systems like Genesis, Nice, et cetera, along with data analytics tools as part of a solution or are organizations bringing their own omnichannel solutions?
Fredrik af Klercker (30:15):
I think that both are present, definitely. I think that in many cases, the larger the client, the larger operations they do have, they tend to have more of their own technology. One thing to maybe consider would be that the more technology you deploy from the BPO, does that make you less flexible? So that’s something to consider.
Fredrik af Klercker (30:51):
Certainly, there’s also the cost element of deploying your own technology versus actually using BPOs technology that might be a little bit more cost-efficient to you.
James Cammareri (31:07):
Okay. Excellent, Fredrik. Thank you and again, thanks for sharing your views on the findings. One last item before we conclude, and as mentioned earlier, keep an eye out for an email from me with a link to a recorded version of today’s webinar. Should you have any questions about the report, today’s, or any upcoming webinar session, you can feel free to respond to that email with any inquiries. Each month we’ll publish a new report on a new topic and we’ll conduct a webinar to review those findings. And you can find more information about the series on our website at COPC.com. Our next session is going to be coming up on recruitment and hiring in late May, on May 26th.
James Cammareri (31:49):
Okay. Thank you guys very much for attending the COPC session. We hope that you found it valuable and we hope to see you again very soon.
James Cammareri (31:56):
Take care.
Fredrik af Klercker (31:56):
Thank you very much.
James Cammareri (00:00):
Hello everybody. And thank you very much for joining us for this Global Benchmark Series webinar. My name is James Cammareri from COPC and I’ll be your host for today’s session. Today is one of an ongoing series of webinars where we invite leaders and experts from COPC, in this case, Fredrik to delve into our research, and to share their views and opinions on some of the most interesting findings from our Global Benchmark Series reports.
James Cammareri (00:26):
These reports, as many of you know, are published on a monthly basis and will cover a range of topics such as contact center technology, contact center outsourcing, recruitment and hiring, employee experience, and many more. Today’s session will be focused on contact center outsourcing and joining me today is Fredrik af Klercker, Director of Vendor Management and Performance Improvement from our EMEA region. Hi Fredrik.
Fredrik af Klercker (00:51):
Hello everyone.
James Cammareri (00:54):
All right. Before we get started, let me just cover some quick housekeeping items. During the session, the attendees will be muted, but you will be able to submit some questions because we’re going to have a Q & A session at the end of today’s webinar. That’ll include about 10 minutes after the presentation to field those questions. So feel free to submit as we go. There’s a Q & A button down at the bottom of the Zoom call. As some of you may already be familiar with COPC, I’ll just take a quick moment to introduce our organization.
James Cammareri (01:32):
COPC is a global consulting firm that’s been around since the mid-90s, and we are relentlessly focused on creating meaningful customer experiences and optimizing business outcomes. We do this for some of the largest brands in the world with a focus on guiding them to continuously improve their operations that support the customer experience. As we’ve listed here on the right-hand side of the slide, our solutions include: performance improvement in strategic sourcing, consulting, training, individual and organizational level certification, and research.
James Cammareri (02:03):
The suite of services is all based on the COPC customer experience standard, which is a performance management and quality management framework covering the best practices and CX operations for in-house and outsource businesses, as well as for vendor management organization. The standard is governed by an independent standards committee made up of some of the most well-known global brands who might update and maintain the document. Many high-performing organizations follow, are compliant with, or even become certified to the standard. And just so you guys know we are a global company. We have consultants in 19 countries and conduct hundreds of operational improvement engagements, all based on the COPC standard and framework every year.
James Cammareri (02:45):
Okay. So let’s jump into some of the more interesting findings from this month’s Global Benchmark Series report. Just a quick reminder to everybody. This is a global report. We’ve been seeing a lot of excitement about the data that we’re getting and we’re getting quite a few questions about the geo-specific results. We’re happy to talk to people individually about questions you might have regarding the results specific to your region and what you might actually be seeing in your area. Just keep in mind that today we’re covering the trends and how they are affecting the entire world. So this is a global report you’re seeing today.
James Cammareri (03:22):
Fredrik, thanks again for joining us and for being on this session with me today. In this first area, we’re discussing global business processes and we’re focusing on the ongoing growth of the outsourcing industry. We’re seeing consistent growth from 2016 through the present and are expecting that same level of growth for the next several years. Does anything that you’re seeing in this data here surprise you?
Fredrik af Klercker (03:47):
Well, one of the things that is interesting to see is that even though digitalization of interactions with customers is expected to continue and moving interactions away from the humanities channels, we still see a clear growth in the BPO market. And BPOs are investing in technology, and most likely those investments will pick up some of that volume shifted into the digital space.
Fredrik af Klercker (04:20):
Also, brands are continuing to outsource operations and turning their focus into their own business processes and improvements, and their own core competencies. In this growth, we see quite a continuous challenge for BPOs to keep up with the growth while at the same time supporting the clients and maintaining high quality and greater customer experiences.
James Cammareri (04:50):
Yeah. I mean, I don’t think it’s anything surprising here, right? We’re seeing this growth continue. We expect it to do so over the next few years. And that really brings us into this next area, which is from a BPO view on why clients are outsourcing. So what key findings did you make note of here, Fredrik?
Fredrik af Klercker (05:11):
Well, looking at it from both the BPO view and the clients’ view, it’s quite well-aligned. So the main drivers being cost reduction and flexibility in ramping up and down. So we don’t really have the answer here. If that cost reduction is expected through… Is it reduced labor cost? Is it reduced volume through service during improvements, deflection to digital channels? We don’t have that information available at the moment.
Fredrik af Klercker (05:42):
It most likely will be a combination all of them. The clients rate technology capability a little bit higher than the BPOs. And there’s certainly a big interest in getting the BPOs support in actually transforming that and getting that shift into the digital channels.
James Cammareri (06:07):
I guess one key factor here might be thinking about the larger outsourcers, right? One of the interesting points here is that larger outsourcers tend to… Larger client brands, excuse me, that are outsourcing a larger portion of their business, tend to own the technology. So I’m wondering how that might affect some of the results we’re seeing here in the research.
Fredrik af Klercker (06:28):
That could be an issue of course, but being the larger brands tend to own their own technology, it might be that we might see a shift going forward with the investments that the BPOs are doing. So it’s going to be interesting to see that going forward.
James Cammareri (06:47):
Okay. And as it relates to the key objectives of the BPOs over the next 24 months, what is our research telling us here, Fredrik?
Fredrik af Klercker (07:00):
Well, we’re seeing that improving service journeys is on the top of the key objectives. An interesting note on that is that’s certainly not something that the BPO will fix themselves. It’s a joint effort together with the client and quite depending on the clients’ capability and also will to change in anything from business processes, policies, or even its products and services. The BPO will certainly be a vital source of customer insights and business intelligence to help the clients to identify where there are improvement opportunities to find.
Fredrik af Klercker (07:42):
And as mentioned, we also have this new technology here that there are quite substantial investments from the BPOs at… And part of that is set to pick up those interactions going from you and assisted channels into digital and as an alternative revenue stream, and definitely supporting the multichannel service journeys in a better way. One thing to note here is that with the last two years in changes in customer behavior, in many ways due to COVID, forecasting has become a real challenge. And seeing that at the bottom here is the question then being, is it getting enough attention for the future?
James Cammareri (08:35):
Yeah, I think some of the additional information we’re going to see here coming up will shed some light on that. But yeah, it’s a great question. Doesn’t seem like it at the moment, does it?
Fredrik af Klercker (08:49):
And then… Sorry.
James Cammareri (08:51):
No, go ahead. To that same degree, as it relates to the key challenges faced by BPOs, improving CX continues to be the largest, the biggest challenge for them.
Fredrik af Klercker (09:02):
Yes. And as just mentioned, when we look at service journeys and the customer experience, it is in many ways, a joint effort together with BPO together with the clients. An important thing here is to note is that the difficulty in recruiting staff, training and development, and staff turnover is quite high on the agenda. And that definitely impacts the BPOs abilities to consistently deliver the quality and achieving that high customer experience. And in the end, also impacting and managing the cost of attrition.
Fredrik af Klercker (09:40):
So we would expect to see a quite strong connection here in the difficulty of recruiting staff and staff turnover with staff engagement and how that relates to each other and how the BPOs can manage both maintaining their existing staff, and then also recruiting new staff to manage the growth that we’re seeing as well.
James Cammareri (10:08):
Great. Okay. And so as it relates to the people management section of the research, let’s peel the attrition issue back a little bit here, and I think over the next few slides, we’re going to get into some of this. It seems we… In this first one on frontline staff, we have a disconnect from the answers we got in the survey and what we’ve actually seen in our own COPC benchmarks, meaning what we’re actually seeing in consulting and certification work, we’re doing with our clients operations.
Fredrik af Klercker (10:42):
Yeah. Yes. We can see to the left that 19% of the BPOs are reporting in here that they lose more than 60% of their staff on a yearly basis. That being 60 out of every a hundred is shifted every year. It’s quite a number, but looking at the benchmark data, as you mentioned, when we are out auditing organizations, we have a medium of 87% attrition. And in this data, we see 25.
Fredrik af Klercker (11:13):
So there is certainly a disconnect. We can’t answer exactly where that comes from in this report. Looking at the challenges the BPOs do face in recruiting, retention of staff, this is quite an important area. And so it’s a little bit of a question, or if the BPO executive view here, is it in line with the actual operational performance? We can’t say really.
James Cammareri (11:48):
And again, continuing with this area of attrition, the trends that we’re seeing, and more specifically, what are the trends around attrition in the last 12 months, Fredrik?
Fredrik af Klercker (11:57):
Well, we come to that a little bit going forward, but looking at the attrition from… Sorry.
James Cammareri (12:09):
Sorry. Are you seeing my screen, Fredrik?
Fredrik af Klercker (12:18):
Yeah. So in the beginning of COVID, we did indeed actually see a reduction in attrition, so 2020. But we are seeing that it is climbing back to more pre-COVID numbers. And as the report here suggests that 45% of the respondents are seeing a slight or significant increase in attrition at the moment.
James Cammareri (12:51):
Okay. And here with team leaders, a similar disconnect?
Fredrik af Klercker (12:56):
Yes. So looking at the benchmark that we have from our operational audits, we see 70% and 10% here. So there’s certainly a disconnect in the data in that sense. Yes.
James Cammareri (13:13):
Okay. And I do see a few questions popping in. We are gathering those everybody. So we’ll absolutely answer those as we get towards the end of the session today.
Fredrik af Klercker (13:30):
Yeah. So diving into-
James Cammareri (13:31):
[crosstalk 00:13:31] And how about absenteeism, Fredrik? Sorry, go ahead.
Fredrik af Klercker (13:34):
Yeah. Well, we would expect to… The numbers we see here with COVID restrictions and COVID-related sick leave being a big part of the 50% that is over five days, but it’s quite worrying to see that 25% are reporting that they have an average as high as over 10 days and even more than 20, 13%. And 35% of the BPOs now also indicate that they’re seeing an increase in the overall absenteeism.
James Cammareri (14:13):
Interesting. Okay. And again, still within this people management section of the research and really over the next few questions we have in here, lets dive into the impacts of work at home. What are we seeing here in this illustration?
Fredrik af Klercker (14:31):
We have certainly seen an increase in work at home in the industry. Mainly driven or maybe accelerated by COVID. So 71% of the respondents say the BPOs state that they do have staff working from home and out of those, 88% are frontline staff. Interesting to see that support functions have a lower percentage working from home. If that is due to access to tools, or is it the need to work closely together or processes that just don’t allow it. We’re not sure, but it’s an interesting thing to see.
Fredrik af Klercker (15:22):
So looking at work from home has presented some new challenges for sure. And technology continues to be one of the biggest ones. And connectivity, or when that happens, PC issues, how quickly can the agents actually be back online to service the customers? So being dependent on outside factors like internet providers or not having access to the agents’ PCs, you can’t put hands on it and actually fix stuff. That does tend to impact the resolution times certainly and also the operations.
Fredrik af Klercker (16:04):
So that has proven to be a challenge for many organizations. Also, interesting to see here that employee engagement is one of the bigger challenges. We do see that there is a need to spend more time with each agent for coaching and feedback when working from home. And in many ways, maybe also just a check-in, because that social connection that you get being in the office in the brick and mortar setup, you lose that. Having connection to your team and your team leader in that sense and in some way, shape, or form that has to be replaced and spending more time with the agents. And that also actually impacts the available time for the agents.
James Cammareri (16:58):
Sure. Yeah, re-creating those ad hoc sessions you’d have at a team leader’s desk or the ad hoc sessions you’d have around the water cooler in the break room, obviously continues to be an important piece here as we’re seeing in the employee engagement numbers. Also, some of the things that organizations have been telling us, not only in research but in our own engagements with them, is that connectivity issue. What percentage of them are actually ready to go on day one out of training continues to be an issue. And so we’re seeing that reflected in some of the data here as well.
Fredrik af Klercker (17:30):
Yeah. And-
James Cammareri (17:34):
[crosstalk 00:17:34] Something a little surprising… Sorry, Fredrik. Something a little surprising in the results here as it relates to CX operators post-COVID.
Fredrik af Klercker (17:42):
Yeah. So we certainly see in the graph to the left that we have had a significant shift in the number of deployed agents in the work from home environments. And 72% of the BPOs state that either they’re going to continue that way or have not yet decided. And that 34% that is not sure, that is quite a worrying number if that indicates that they don’t yet have a plan, on a strategy in place for how to continue or not.
James Cammareri (18:23):
So 30… So what this is telling us on the right-hand side is that 38% expect to stay in a work from home model, 28% expect they’ll go back to a brick and mortar or at least some form of brick and mortar, and 34 don’t have a plan.
Fredrik af Klercker (18:39):
Yeah. And that 34 is certainly a worrying number.
James Cammareri (18:43):
Yeah. Okay. Okay. So switching gears over to… From a strategy perspective, how about on the vendor management side of things? Interesting findings here when asking client organizations about their formal VMOs to engage with their outsourcers.
Fredrik af Klercker (19:01):
Yeah. So we can see that about half of the respondents here indicate that they do not have a dedicated VMO setup or a vendor management organization for managing their BPOs. This could suggest that there can be a lack of clarity in many organizations, of ownership, of vendor relationships and potentially impacting the clients’ capability to drive BPO performance, be that quality customer satisfaction cost, et cetera.
Fredrik af Klercker (19:35):
What we do see is that the research indicates that organizations that do have a dedicated VMO are 1.2 times more likely to be satisfied with their vendors. So having that structure and that formal setup in managing your outsourcing partner seems to be quite important to get that relationship really running smoothly.
James Cammareri (20:02):
And are we seeing different approaches to the commercial models?
Fredrik af Klercker (20:07):
Yes. The most common one is after you close, FTE model closely followed by per contact or interaction, 15% state that they use more than one model. One of the things that we were expecting was to see a larger deployment of risk and reward schemes, so performance driven schemes. Interesting also to see that clients that do have a dedicated VMO team are two times more likely to use that kind of setup. So that is an interesting reflection and it could be at the high percentage of FTE model could be that there’s quite a large number of smaller programs outsourced where an FTE model is quite appropriate.
James Cammareri (21:00):
Understood. And those that know… So COPC know that we always want to know about CSAT and performance and in this case satisfaction with outsourcers performance.
Fredrik af Klercker (21:13):
Yeah. And it’s interesting to see that only 46% of the clients are actually happy with the BPOs and the relationship. Interesting to note that those that have higher frequencies in business reviews, meaning have a tighter and closer and more frequent relationship and having more frequent conversations with their BPOs are actually happier. 1.3 times more satisfied with the relationship. So having that tight relationship, having that those close conversation is quite important to drive the relationship forward.
James Cammareri (21:58):
Very interesting. And of course, employee engagement, employee satisfaction and retention here.
Fredrik af Klercker (22:07):
Yeah. So we can see that only… Yeah, if that’s the right word, but only 64% of frontline staff state that they are actually satisfied with their jobs. And 70% say that they’re likely to continue with the current organization. With the challenges we saw earlier in the presentation with recruitment and retention of staff, this is something to really take note of. We can certainly see that staff satisfaction and staff retention has a clear linkage. So this is a focus area that many should maybe take even more seriously.
James Cammareri (22:51):
Okay. And obviously related to that obviously is performance reviews and one-on-ones.
Fredrik af Klercker (23:00):
Yes. So we can see in our research that the more regular, well-performed performance reviews do drive employee satisfaction. That drives engagement and that has a clear impact on improving attrition numbers. So really having a well-structured approach to really making sure that you have these reviews and also making sure that it’s really well-performed and gives value to the employee.
Fredrik af Klercker (23:33):
It’s quite clear that the more regular reviews, the higher the employee satisfaction. As I said, having that challenge with recruitment being one of the major concerns for BPOs, and of course, attrition had a fundamental impact on recruitment on top of the need for recruitment, for growth. So this is certainly another key area to focus on.
James Cammareri (24:07):
Great. Okay, Fredrik. Great job getting us through some of these questions. Obviously, we had limited time today to get through all of the key findings, but can you summarize a little bit here for us Fredrik, and what the conclusions we’ve found in this month’s survey?
Fredrik af Klercker (24:26):
Yeah. So certainly we can see the BPO market is drawing and continued outsourcing driven by the cost reduction and the flexibility. Also, the clients wanting to focus on their core while outsourcing operations. Noteworthy is the BPOs area focus on improving service journeys and the customer experience and having that collaboration and being the source of information to the clients to actually help clients improve for their customers. And of course, the deployment of new technologies to support the multi-channel strategies of their clients. Looking at recruitment and staff retention. Again, this is a challenge. And certainly, we are keeping up with that growth number as well.
Fredrik af Klercker (25:21):
The work at home with the dramatic shift we have had and the growth of that and the new challenges and the changes that BPOs have had to do in ways of working, in terms of how do we set up the technology? How do we maintain that? How do we get agents ready to actually do the job? And certainly, the area around staff engagement and really getting the agents connected to the organization. And interesting also the finding that clients with formal vendor management organizations do have a tendency to be more satisfied in the relationships.
James Cammareri (26:08):
We do have… By the way, thank you so much Fredrik for the overview and for the conclusions here. We do have quite a few questions that have come in. So I’ll start with the top two, and then we’ll see how much time we have to get through them. So the first question is, which payment model is best? Does COPC have a recommendation?
Fredrik af Klercker (26:30):
Well, there is no one size fits all in this, that’s the short answer. Whatever payment one chooses, it has to be fit for the purpose of the business and the typical program that you have outsourced. But for example, in very small programs, the FTE model is probably a good solution. In some cases, you even staff just to have availability. While in larger, more mature programs, per contact or per minute might be more appropriate. Certainly, it differs depending on, is it the sales program that’s differing from other programs, if it’s service… So there’s no one size fits all. At COPC, we do help organizations to go over contracts and advice on what model would be appropriate in different circumstances.
James Cammareri (27:33):
And Fredrik with your experience on the vendor management side. I know we are seeing this more and more with clients we’re talking to… Results-oriented models, meaning much more about driving results versus metrics. Right?
Fredrik af Klercker (27:51):
Yes.
James Cammareri (27:51):
Gotcha.
Fredrik af Klercker (27:51):
Yeah.
James Cammareri (27:51):
All right, so another quick question is at what size of operations is a formal VMO recommended, vendor management organization?
Fredrik af Klercker (27:59):
Well, again, there’s no real line in the sand here. It’s quite a lot about what level of control you want to have. When you do find that you have multiple people in your organization, interacting with the vendors on topics like quality training, workforce management, skills verification, et cetera, you might want to add a bit more formal structure to it, clear processes in place to get clarity on roles and responsibilities within their own organization.
Fredrik af Klercker (28:31):
Also, clarity in the split of responsibilities between you and your vendor. We see certainly VMO organizations of all sizes. It can be from just one or a few persons to hundreds, depending on the size of operations you outsource. It’s also a little bit related to what kind of BPO you actually have contracted with. If you have one of those that has more capabilities, you can actually outsource more of the shared processes as well. Meaning that you can actually streamline your own organization a little bit more. So it’s a little bit depending on the level of control and the complexity of the work that they outsource and what type of BPO you actually have a contract with.
James Cammareri (29:22):
Okay. All right. Now here’s one, also on the VMO path that says it was stated that BPO with VMOs are 1.5 more times satisfied with BPO. Was there any cost-benefit analysis to support that? Fredrik, I’m not sure if we have access to that.
Fredrik af Klercker (29:42):
No, I do not think that we have that information. Sorry.
James Cammareri (29:46):
It’s a great question. I think what we’ll do with that is to gather what we can and share that back with the person who asked with this entire group. One other more on the technology side, Fredrik, is a question of are organizations willing to take BPO providers, call center systems like Genesis, Nice, et cetera, along with data analytics tools as part of a solution or are organizations bringing their own omnichannel solutions?
Fredrik af Klercker (30:15):
I think that both are present, definitely. I think that in many cases, the larger the client, the larger operations they do have, they tend to have more of their own technology. One thing to maybe consider would be that the more technology you deploy from the BPO, does that make you less flexible? So that’s something to consider.
Fredrik af Klercker (30:51):
Certainly, there’s also the cost element of deploying your own technology versus actually using BPOs technology that might be a little bit more cost-efficient to you.
James Cammareri (31:07):
Okay. Excellent, Fredrik. Thank you and again, thanks for sharing your views on the findings. One last item before we conclude, and as mentioned earlier, keep an eye out for an email from me with a link to a recorded version of today’s webinar. Should you have any questions about the report, today’s, or any upcoming webinar session, you can feel free to respond to that email with any inquiries. Each month we’ll publish a new report on a new topic and we’ll conduct a webinar to review those findings. And you can find more information about the series on our website at COPC.com. Our next session is going to be coming up on recruitment and hiring in late May, on May 26th.
James Cammareri (31:49):
Okay. Thank you guys very much for attending the COPC session. We hope that you found it valuable and we hope to see you again very soon.
James Cammareri (31:56):
Take care.
Fredrik af Klercker (31:56):
Thank you very much.