A Call Center That Succeeds by (Gasp) Valuing Employees


Many folks think it's a given that service quality declines when call center work is moved offshore. Earlier this summer I wrote about the difficulty of maintaining service quality here in the United States, where call centers typically experience sky-high churn rates. It's a big problem, considering the high costs of replacing employees. I cited a statistic from Paul Stockford, chief analyst at Saddletree Research and director of research for the National Association of Call Centers (NACC), who puts the cost of attrition at call centers at $5,466 per individual, based on a 2008 survey of 70 call centers.


And staffing gaps create tougher workloads and other stresses for the work force and often result in lower service quality.


Why do companies struggle to keep call center employees on the job? Many folks fault the working conditions at call centers, with some calling them "white-collar sweatshops." Though I think calling them "sweatshops" overstates the problem, I think it's fair to say many call centers see their workers as commodities and rarely consider employment conditions other than trying to figure out how to drive down costs.


But there are always exceptions to any rule. Vivek Wadhwa highlights an especially interesting call center company, Ohio-based iQor, in BusinessWeek. Its client roster includes Capital One, the BBC, DirecTV and MetroPCS Communications. (It might be a coincidence, but I've kept my Capital One credit card while canceling others largely because of the pleasant and efficient service I've received while resolving problems.) About half of iQor's 11,000 employees are based in the United States and it has added 3,000 workers here in the past four years.


Astoundingly, some of its front-line call center workers make $100,000 a year. ("That's not a typo," writes Wadhwa.) The earnings potential may help explain why iQor has a turnover rate of 45 percent, less than half the industry average. (Sadly, I don't think the average turnover rate is a typo, either.) In addition, iQor lays out career path programs that clearly illustrate a worker's road to advancement, promotes employees who started out working the phones to management positions, and offers all employees health insurance and benefits packages.


It sounds pretty simple. Job performance tends to improve when employees feel their contributions are valued. Compensation is an obvious way of showing it, but some companies boost employee morale with low-cost practices such as having an executive call workers and thank them for their efforts.


As Wadhwa notes, iQor also enlisted a labor economist and a psychologist to build a screening and aptitude test to designed to help the company find employees well suited to the work. Those hired through this screening process were about 50 percent more effective on customer calls than their peers who weren't screened. Instead of using headhunters, it pays its own employees for leads on potential hires. In the past four years, iQor employees have referred more than 7,000 people and the company has paid out more than $1 million in referral bonuses.


While people and processes are important, iQor has also invested in call center technology. It uses virtualization so it's (relatively) easy and cost-effective to run any of its customers' software applications.


Writes Wadhwa:

IQor's success is based on the realization that although call-center work has a bad reputation, it's actually complex labor that can be improved through better processes and technology. It's closer to accounting or law in its intricacy than it is to fast food. Complex jobs benefit markedly from better talent, and iQor hires skilled people that lead to better outcomes than if it had decided to ship jobs overseas.