Hosted From Home: How the Virtual Model is Transforming Contact Center Operations

The road to employing at-home agents has long been a bumpy one. As hosted contact center technologies continue to improve, it is paving the way toward making agents that work from home a contact center norm.

Sykes Enterprises, Incorporated, a provider of outsourced customer contact management solutions and services for BPO, recently announced that it is not only expanding its proprietary virtual call center model, but the company is also hiring at-home professionals to add to its workforce. The announcement may seem commonplace, but that is the point: the virtual – or hosted -- contact center model is rapidly becoming mainstream.

Hosted Market Growth

When ICMI released its Contact Center Operations Report in 2008, over one in five contact centers surveyed currently used home agents in some capacity. At the time, 8.9% of the centers surveyed had implemented a full-fledged home agent initiative and 12.1% had a pilot program in place.

Now, only a few years later, we are seeing that the hosted call center market is experiencing a surge in market growth. As noted in ICMI’s whitepaper Cloud Cover for the Call Center: Meeting Demands Intelligently and Efficiently this particular growth spurt is one that analysts are predicting will continue on through the next few years. For example, Frost and Sullivan estimate that the North American Hosted Call Center Market will grow from approximately $400 million to more than $1.5 billion by 2015. The whitepaper also cites Gartner’s estimation that through 2012, 40% of organizations moving to a new CRM platform will select a software-as-a-service (SaaS) as the core customer service desktop.

The development and improvement of cloud technology in has played a pivotal role in this growth and in the contact center's transformation in favor of the virtual model. And there is enough variety which provides a comprehensive business case in favor of at-home agents. Here, Rowan names the top four drivers of the at-home workforce:

1. Customer loyalty
2. Cost improvement
3. Employee Satisfaction
4. Social Responsibility

Rowan points out that these drivers have emerged as the priorities of the contact center have evolved from a focus on cost management and inbound sales and customer service to building customer loyalty, increasing customer engagement and incremental sales.

Customer loyalty. The results of the 2010 Contact Center Satisfaction Index study by the CFI Group North America show that –for Americans—customer satisfaction is generally improved when they perceived that they were speaking to an agent in the United States. Rowan cites this report, pointing out that at-home agents are generally more educated and have more experience and also have a higher rate of understandability in comparison with offshore agents.

Cost improvement. In any economy, the virtual model offers a significant savings for the call center in a number of ways. ICMI's cloud whitepaper states that labor costs makes up approximately 80% of a contact center's total cost. Traditional solutions for reducing this cost have been to lay off agents or employ offshore contact centers. Both options have the potential for increased customer wait times, lower agent moral and decreased customer satisfaction – none of which offer any benefit to the contact center. However, employing home-based agents through the cloud offers contact center a third option that may not have been as accessible in the past. The whitepaper describes how contact centers can more efficiently manage labor costs using the hosted model to trade agent salary for flexibility. In other words, agents can be allowed to work from home in exchange for a decrease in salary relative to their decreased out-of-pocket expenses for commuting, meals, etc. The hosted model also gives the contact center the option to save on overhead costs, to employ agents with specialized skills that may have been previously unavailable to them due to distance and other labor-related costs.

Employee satisfaction. When you consider factors such as commute time and other scheduling conflicts, it should come as no surprise that at-home agents are generally more satisfied than on-site agents. "Home agents usually stay longer," Michele Rowan said during her Dreamforce session. "Companies usually see reductions of 35 to 50% in turnover. Why? Because home agents are happier…they're at home! And often with flexible work schedules."

Nearly 35% of contact centers surveyed in ICMI's 2008 Contact Center Operations Report said that turnover among home agents was notable lower than their on-site staff, and three out of four contact centers reported that the use of home agents has had a very positive impact on their center’s effectiveness.

Social responsibility. The virtual model enables a workforce scenario that offers significant benefits to the global and local communities. This includes providing an employment alternative to those who may be housebound, such as stay-at-home moms, elderly or disabled employees. It is also great for the environment, as the reliance on technology cuts down on pollution from commuting and ultimately lowers the organization’s carbon footprint.

The Contact Center of the Future

Could all contact centers be completely or partially at-home in the future? There is no way to know for sure, but when you weigh all of the benefits and the increasingly available cloud-ready technologies, it is a likely scenario

The hosted contact center model plays an important role in the recent insourcing movement favored by President Obama, and has also been a major factor for many companies who have made the decision to bring their offshore jobs back into the U.S.

What do you think – are virtual contact centers transforming the industry as we know it?