Call Centers Come Home

Using home-based call center workers can offer employers significant financial and HR advantages over offshoring.

By Jan 1, 2007
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HR Magazine, January 2007In an effort to cut costs, companies have been outsourcing their call center functions for the past decade to low-wage workers in India, the Philippines and other far-flung countries. But that trend is changing as call centers are coming home—and into the homes of free-agent workers in the United States.

Early adopters of the trend, which is sometimes referred to as “homeshoring,” include JetBlue Airways, Alpine Access, PHH Arval and LiveOps—companies that since about 1999 have rejected traditional employer squeamishness about managing a telecommuting workforce and have made at-home agents their central staffing model. Now other employers are following suit, and the trend toward using at-home workers is taking flight. (See sidebar “A Trend on the Rise.”)

Some of the benefits that companies derive from tapping this workforce include reduced costs, increased staffing flexibility and an expanded pool of job applicants.

Of course, there are challenges as well—including adapting to new ways of conducting interviewing and training. But examining the experiences of the early adopters can help any organization reap the rewards and minimize the challenges of employing a distributed, at-home workforce.

Advantages of At-Home Agents

A key driver in the growing use of at-home call agents is cost savings. The practice can reduce or even eliminate capital expenses for offices, parking lots, PCs and other employee amenities.

The reason: Most agents work as contractors, receiving few or no benefits, and they often provide their own computers, phones and Internet access. As a result, using at-home agents can cut property and IT costs by as much as 80 percent over offshoring, estimates Jack Heacock, senior vice president of The Telework Coalition, a nonprofit membership organization in Washington, D.C., that studies and promotes homeshoring.

From an HR perspective, homeshoring can expand a company’s reach for talented workers. Employers that use homeshoring have discovered and tapped into a robust, underutilized workforce: individuals who can’t or won’t work full time outside the home. This workforce includes mothers with small children, retirees, students, people with disabilities and those whose schedules require maximum flexibility.

Homeshoring also enables employers to hire workers from a much broader geographical area, which can be important for companies that require call center staffers who possess unique skills that may be difficult to find locally in adequate numbers.

In addition, home-based call center agents tend to be motivated, mature and educated. According to Gartner Inc., 70 percent to 80 percent of home-based agents have college degrees, compared with 30 percent to 40 percent of workers in conventional call centers.

Free Agents At Alpine Access

The education and maturity of at-home agents have become selling points for Denver-based Alpine Access, a top provider of call center services to client companies.

“We market our workforce to clients as higher caliber than they might find in a traditional call center environment,” says Allanna Kelsall, vice president for human resources. “The average age of our agents is 38, and 80 percent have had two or more years of college.”

Alpine employs about 7,500 agents throughout the United States. These employees set their own hours and are entitled to supplemental health benefits, paid training and internal promotion. More than half are stay-at-home moms.

Jobs at Alpine are in such high demand, Kelsall says, that recruiting efforts are nonexistent. More than half of all agents are hired through referrals; the rest are acquired through word-of-mouth, which is often passed through Internet chat rooms and bulletin boards like www.WAHM.com, a site for mothers who want to work from home.

“We received more than 100,000 applications [in 2006],” says Kelsall, but fewer than 10 percent made it through Alpine’s strenuous hiring process.

The process begins with an online application and questionnaire, designed to help candidates self-select out if they don’t meet the job demands—which include high-speed Internet access; a quiet, secure workspace; and the ability to work in solitary conditions without face-to-face interaction with colleagues or supervisors.

The next stage is a technical screening to assess candidates’ computer comfort, and then a voice audition in which candidates call a number and leave a recording responding to questions. Alpine recruiters—other at-home agents trained in applicant screening—evaluate candidates and may opt to move applicants on to a “voice-to-voice” live telephone interview.

Candidates who pass this final test receive an offer, but only after a “cooling off” period of a week. “We do this to ensure they are motivated to take the position and complete the training,” says Kelsall.

All training is done online, through both self-paced programs and real-time interactions with a trainer—another qualified Alpine agent.

Alpine’s business model is to train and assign agents to work for dedicated clients. The company screens hires for interests and expertise that might match a particular client’s products and needs; new employees are then trained to the client’s specifications.

For example, Martha Libby, from Aurora, Colo., answers calls exclusively for 1-800-Flowers. “I’ve always had an interest in gardening and flowers,” she says. “In school, I competed in flower-arranging contests, and have done arrangements for friends’ weddings and other occasions.” Libby’s experience, coupled with three years of working for the client, enables her to give expert help and advice to callers.

Libby works 15 to 20 hours a week, receiving Alpine’s standard pay of $9 an hour. Her hours are counted from the time she logs on to Alpine’s web site until she logs off. She sets her own hours, scheduling herself for shifts from one to four hours. During what Alpine calls “ramp time”—the busy periods around Valentine’s Day, Mother’s Day, Christmas and other flower-centric holidays, she moves into a supervisory, or “coach,” role, for which she has received special training.

LiveOps

LiveOps Inc., in Palo Alto, Calif., is another key player in the call center marketplace. Its business model differs slightly from Alpine’s in that each of its more than 9,000 contractors answers calls from a variety of clients.

Through online training, agents certify themselves for each client they want to work with, a process that can take a few minutes to a few hours, depending on the complexity of the client’s needs and scripting. Over time, agents can become well versed in serving dozens of different clients.

Agents have a strong incentive to do so: Incoming calls are automatically routed to the most qualified agent on call, and—unlike the compensation model at Alpine—LiveOps agents are paid for the actual time spent on customer calls. So those who receive more calls make more money—up to $20 an hour for the best agents.

Agents’ skills in handling particular clients’ needs are constantly evaluated and ranked using LiveOps’ proprietary technology. “Agents can log in and see their ‘star rating’ for each client they work for, and know how they rate against other agents currently logged on,” says Tim Whipple, vice president of agent services.

“It’s a very merit-based system,” Whipple says. “Instead of just putting in the hours, agents are motivated to build their client portfolio and become experts in many areas.”

And, he adds, “those at the top of the ranking can be busy, busy, busy.”

One busy agent is Kim Conner, a stay-at-home mom with three children under the age of six—including one who is seven months old. Conner has worked for LiveOps for more than a year and is a top-ranked agent for several clients. She fields calls for everything from household appliances to insurance, shoe insoles and takeout food for hungry customers who may be two times zones away.

Conner, a former high school chemistry teacher with a master’s degree, is grateful she can work while caring for her children in Madison, Wis. “I learned about LiveOps when I was in the doctor’s office one day, overhearing some other moms talk about it. Within a month, I was up and running.” To ensure minimal disruption, she takes calls in her home office on weekends and in the evenings when her husband can pick up the parenting duties—about 20 hours a week. She earns up to $1,000 a month.

She—and other LiveOps agents—also receive immediate online support from the company. Like Alpine’s, LiveOps’ technology enables supervisors to monitor agents and communicate with them in real time via a chat room. The chat room is indispensable, Whipple believes, because it enables agents to pose questions to supervisors and receive immediate answers without requiring customers to hang up or be put on hold.

The chat room also operates as a virtual “watercooler,” says Whipple, where agents can socialize during slower call volumes.

Local Agents at JetBlue

A different model for at-home call services exists at JetBlue Airways, the New York-based airline that launched in 2000. From its inception, the company has used only at-home agents who are full employees of the company for its reservation center in Salt Lake City.

“This is very unusual for the airline industry,” says spokesman Bryan Baldwin. “Most have large call centers or overseas outsourcing. Our primary goal is to provide the best customer service we can, and we can only do that if our agents are employed by JetBlue.”

All JetBlue agents, referred to as “crew members,” live in the Salt Lake City area, where supervisors and managers work and where training takes place at the reservation center. No calls are received there, but employees report monthly to meet with team supervisors (there is one for every 30 employees) and every other month for ongoing training.

Periodically, agents are required to bring in their company-provided computers for updating, and several times a year teams meet face-to-face for social events and further education through JetBlue University.

As with all the companies interviewed for this article, attracting new at-home agents at JetBlue is a matter of gatekeeping rather than sourcing. “We only open the application process once a year for a 24-hour period, and we’ll receive 1,200 to 1,400 applicants,” says Baldwin.

When hiring, says Baldwin, “we really look for customer service experience rather than reservation experience. We want them to have an attitude of helping customers even when they can’t take a reservation. For example, if a customer wants to go to St. Louis, where we don’t fly, he’ll be referred to another airline that has that route.”

JetBlue employs 1,500 home-based agents, 70 percent of whom are stay-at-home moms. The company works to maintain a 70/30 ratio of part-time to full-time workers because part-timers have a better retention rate.

Agents bid for six- to eight-hour shifts and are free to trade and give away shifts as their schedules require. “We have full-time shift monitors to manage the unlimited bidding and trading,” Baldwin notes.

Training is a paid, five-week process. New hires spend two weeks in a classroom learning about the airline industry, the technology and the company culture; for the remaining three weeks, they take calls under supervision.

Agents start at $8.50 per hour, with a fixed 5 percent annual raise, medical coverage, profit sharing and flight benefits.

“One of the great things about this system,” says Baldwin, “is that when things get busy, like during a weather event, we can send an e-mail to all agents asking them to log in to help. The response is immediate—we don’t have to wait for them to come in.”

He adds that in such cases agents are paid voluntary overtime—$4 above their hourly rate.

PHH Arval

PHH Arval, a national fleet management and leasing company in Sparks, Md., puts yet another twist on home-based agents—employee incentive. Twenty percent of its call center employees have earned the work-at-home benefit specifically because of their demonstrated leadership skills, work ethic, and broad and blended skills in customer service and automotive knowledge.

Outsourcing its calls overseas or domestically isn’t an option for the company, since agents are highly specialized in the automotive field. Former service managers and auto repair specialists are recruited for the company call center; the best of the bunch are handpicked by their managers to take calls from home, working part time or full time on two three-hour split shifts, morning and evening.

“My [remote] agents are taking calls from client drivers and repair facilities, supporting drivers in getting to proper repair facilities and making sure repairs are appropriate,” says Arnie Barnes, director of vehicle maintenance assistance. “It’s the same role as our in-house agents,” he says, but with a notable difference: At-home agents “carry a larger suite of skills and have proved their proficiency.”

There is no formal application process for working at home; employees are selected based on managers’ referrals. Anyone with one year of tenure who meets and maintains performance goals is eligible to telecommute, although the company has hired at least one agent directly into the program based on a client’s recommendation.

Performance goals include achieving a score of 85 percent or higher on call-answering availability, a score of 90 percent in monitored quality, and no more than one unscheduled absence or one office tardiness per quarter (and zero instances of tardiness once telecommuting begins). In addition, these employees must meet strict knowledge standards, successfully completing the company’s five training modules and a company policy review. A proven ability to work independently is also essential for consideration.

PHH Arval realizes significant benefits from the program, including motivated employees, enhanced client satisfaction and less downtime. “Employee and customer satisfaction are [among] our focuses,” says Ken Ridgeley, director of fleet administration and driver response. “But using at-home agents is also key to business recovery in an emergency.”

PHH Arval’s cadre of home-based agents is on the spot to handle calls seamlessly when weather or other factors hamper the bricks-and-mortar call center. Most live within reasonable commuting distance of the company’s headquarters and come into the office weekly to work on special projects, but a few agents have relocated as far away as Colorado and Minnesota, visiting headquarters only a few times a year.

These top-performing employees earn $70,000 to $100,000 a year, and very few turn down the opportunity to work from home. According to Barnes, the program has made recruiting new agents easy; once job applicants learn about the work-at-home incentive, they typically are eager to join, since there is no limit to the number of employees who may become eligible based on merit.

And while turnover for the company’s office-based call agents is a respectable 15 percent to 18 percent, Barnes can recall only one at-home agent leaving the company since the program began almost 12 years ago.

That’s one trait at-home call center agents share: They stick around. Alpine Access reports a turnover rate for its employees of 10 percent to 25 percent—including seasonal employees. LiveOps reports less than 10 percent turnover. And JetBlue? An enviable 4 percent.

Martha Frase-Blunt is a writer and editor based in Martinsburg, W.V.

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