Answering the Call

Capital One taps technology to improve recruiting and retention of call center employees. 

“A customer calls with a complaint that the clock she bought from ‘Time in a Bottle Co.’ runs too slowly. She has called twice before and was put on hold for more than 10 minutes each time before hanging up. Now she is very angry and demands the return of her money for shipping and the clock.”

That’s a scenario taken verbatim from a computerized interactive phone simulation for call-center applicants at Capital One Financial Corp., based in McLean, Va.

Capital One is one of the world’s largest providers of MasterCard and Visa credit cards, with about 44 million customers. It has more than 20,000 employees. Approximately 75 percent of the company’s nonexempt employees are phone associates who work in call centers; Capital One hires about 3,000 call-center employees each year. To keep pace with its growth in the late 1990s, Capital One needed to find tools to refine its hiring practices. Meeting its requirement to increase its customer service staff by as much as 40 percent would have been difficult if the company could not find new ways to recruit and retain quality call center associates, reduce turnover and costs, and increase sales.

Prior to its growth spurt, Capital One used labor-intensive paper and pencil assessment methods. But executives needed a quick, accurate product that would tie into the company’s information-based strategy (IBS) and could accommodate thousands of job seekers. Now, with proprietary database software, the firm recruits, selects and analyzes employee traits that are most predictive of success.

The call-center recruitment and assessment process, which was rolled out in 2001 after about three years of planning and implementation, is part of the company’s IBS. Capital One’s IBS employs technology to gather and use data for everything from profiling customers to managing accounts, evaluating managerial and employee performance, and recruiting and hiring the right people.

Prospects for call-center jobs call a toll-free number that takes them through a touch-tone battery of screening questions that takes about 45 minutes, or they apply online. If they pass this selection process, they’re invited into one of the company’s regional assessment centers. There they use computers to take tests, undergo assessments and supply biographical information. Testing takes two days to complete and lasts two to three hours each day.

The first day consists of a short test in numerical reasoning and a longer assessment of the candidate’s biographical data. The day concludes with 60 to 90 minutes of online, video and phone simulation of a customer service scenario.

About half the applicants make it to the second day, which begins with an hour-long phone simulation with an HR professional. Then a computer algorithm determines whether the prospect meets the job’s requirements. That judgment and the HR representative’s assessment determine who will receive job offers. About half of those who make it to the second day receive offers.

“This is a classic example of how [information technology] can drive efficiencies through technology innovation,” says Joan Schaffer, vice president of business operations technology for Capital One. “It involved integration of multiple technologies, including real-time automated decision-making, and online videos and simulations. In addition, the architecture is unique in that it incorporates separate modules, providing a ‘plug and play’ arrangement that is readily adaptable to support all recruiting and selection processes within the company.”

A New and Improved System

Capital One’s automated system decreased time-to-hire by 52 percent and raised hiring capacity—the company’s ability to attend to the hiring process—by 71 percent, says Celeste Watson, vice president for HR. “We’ve also seen a substantial improvement in call-center productivity metrics, as well as a 75 percent reduction in involuntary attrition during associates’ first six months.”

The number of calls handled per hour increased by 12 percent, and there was a 36 percent increase in the rate of closing sales. Also, “unproductive time” decreased by 18 percent, she says.

The cost per hire fell substantially in the first two years of the system’s use. In 1999, the allocated cost per hire was $2,410. The company has been reducing that figure steadily.

The value of Teamwork

Changing procedures did not occur without obstacles.

In most technology implementations, conflict arises when IT does it one way while HR needs it another way and management has yet another view. Throw in the prospective employee for whom the system is designed, and it becomes evident that smooth integration requires balancing the new technology with culture and conflicts.

Hiring Capital One Call Center Employees

In 1998

The process involved an automated phone screen followed by pre-screening paper and pencil testing. Candidates who made the cut went on to a credit check, behavioral interview and, if all was acceptable, an offer.

Time from Initial Contact to Offer: 22 days on average

Since 2001

The employee takes a quick test on the phone and then takes online tests at one of seven testing centers in topics such as numerical reasoning, followed by an interactive phone test online, then a live phone simulation. That is followed by an onsite phone interview. If all hurdles are cleared during this two-day process, the company immediately offers a job.

Time from Initial Contact to Offer: 13.9 days on average

The challenge is to get management to document for the recruiters what specific competencies and skills are required of new hires and what skills can be honed with training once the worker joins the company, says Deborah Phillips, a principal with the North Highland management and technology consulting firm in Atlanta. She develops applications and trains users in help desk and customer service applications. The culture has to allow one functional area to accommodate another within the same organization, Phillips says.

Bob Tenzer, executive vice president of HR for Precision Response Corp. of Plantation, Fla., agrees. “The biggest obstacle to making automated recruitment and selection work for call center management is the culture change,” says Tenzer, former director of HR and store operations for Neiman Marcus, a Dallas-based clothing and specialty items retailer. “Moving to automation can make managers feel they will have nothing to hang onto or refer to later. Sometimes in a fast-paced environment it is just easier to keep rushing through outdated processes because they have worked for so long. Add to that the concept that change is not easy for all people, and you can have a recipe for failure.”

Integrating the Elements

Getting past cultural barriers is only half the battle. The company must also make the new technology fit into the old way of doing business.

Capital One executives had to consider how they could pull software, technology and packaged systems into a coherent solution, Schaffer says. “Because of the unique recruiting and selection processes at Capital One, the application is almost all custom development. However, we did integrate a purchased call center simulator and a legacy application tracking system.”

Connecting custom and out-of-the-box systems was a challenge, adds Schaffer. “We had to write a complicated interface to incorporate this [simulation] technology in the middle of the recruiting and selection process while making the transition seamless to the candidate end-user.”

Schaffer emphasizes the importance of having information technology (IT) professionals with business savvy and knowledge of the recruitment process. “Trying to integrate a highly flexible system with an inflexible one provided some integration challenges; however, we have some of the best IT folks in the industry,” she says.

Capital One executives continue to monitor and refine the process as they gather data, Watson says. “We have also transferred the findings from this process to exempt recruiting. We’re currently using an exempt pre-screen that traces its roots to the call-center pre-screening process.”

Jim Romeo is a freelance writer based in Chesapeake, Va., who specializes in business and technology.

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