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Workforce Management in the Contact Center

Optimizing Agent Scheduling and Productivity to Improve Customer Experience Results

June 2012

Omer Minkara

This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc.

June 2012

Workforce Management in the Contact Center: Optimizing Agent Scheduling and

Productivity to Improve Customer Experience Results

In a world where consumers can communicate, shop and learn based on their preferences (when, where and how), it is imperative for organizations to be available for customer interactions 24x7. The contact center, a primary and strategic tool in facilitating customer interactions, is one of the key organizational departments challenged by this reality. In addition to operating within a tight budget to meet growing consumer demands, contact center managers are also struggling with accurately forecasting demand and maintaining appropriate workforce levels to meet it. In addition, agent engagement, retention, and satisfaction are becoming extremely vital as these impact turnover, productivity, profitability and ultimately customer value.

In March and April 2012, Aberdeen surveyed 166 end-user organizations on their contact center workforce management activities. Of the 166 organizations surveyed, 101 indicated that they are currently using workforce management tools and processes as a strategic part of their contact center activities. This Aberdeen Analyst Insight will identify how Best-in-Class companies among those 101 organizations manage agent hiring, training, scheduling and performance management activities. The results will demonstrate how these differentiating factors can help companies accomplish improvements in key measures, including first call resolution rate, customer satisfaction and agent utilization.

Agent Productivity and Utilization Findings from this study reveal that contact centers are turning to workforce management programs for three main reasons, as shown in Figure 1. More than half of all contact centers with active workforce management initiatives indicate that improving agent utilization and productivity (see sidebar) are top of mind when investing in contact center workforce management processes and technologies. Forty-three percent (43%) of these organizations are aiming to improve their accuracy in forecasting the volume of customer interactions. This is a critical objective as accuracy in predicting the volume of contact center interactions has a positive influence on performance improvements in key measures reflecting customer responsiveness (e.g. first call resolution rate and average wait time).

Analyst Insight

Aberdeen’s Insights provide the analyst perspective of the research as drawn from an aggregated view of the research surveys, interviews, and data analysis

Definitions

For the purposes of this research, Aberdeen uses the following definitions:

√ Contact center: An interaction hub that encapsulates customer interactions taking place through phone, live chat, email, social media, etc.

√ Agent utilization: A measure indicating the percentage of agents serving customers during their salaried/paid time.

√ Agent productivity: A measure indicating the percentage of agent time spent with productive tasks. Productive tasks include customer interactions and time spent for coaching and training activities.

Workforce Management in the Contact Center: Optimizing Agent Scheduling and Productivity to Improve Customer Experience Results Page 2

© 2012 Aberdeen Group. Telephone: 617 854 5200 www.aberdeen.com Fax: 617 723 7897

Figure 1: Agent Productivity and Utilization are Top Goals

Source: Aberdeen Group, April 2012

In addition to improving agent utilization and productivity as well as creating more accurate demand forecasts, one-third of contact centers turn to workforce management as a key initiative to improve the quality of customer interactions. While the percent of companies indicating this goal is comparably lower than the other two goals highlighted above, it is equally important. By ensuring that the contact center agents provide quality (e.g. personalized, informative, accurate and timely) service to customers, companies are better positioned to create positive customer experience results. In fact, data shows that businesses focused on embedding this goal within their workforce management efforts achieve 36.2% greater (8.9% vs. 6.6%) year-over-year improvement in customer satisfaction results.

Unpredictable Customer Traffic is the Top Challenge Forty-eight percent (48%) of companies with contact center workforce management programs cite unpredictable customer traffic as one of the leading challenges in managing their agent workforce (Figure 2). Considering that 43% of contact centers turn to workforce management to improve their demand forecasts, these businesses need to focus on determining the main drivers of customer traffic in order to excel in achieving this objective. This Analyst Insight highlights several factors that help contact centers accomplish this objective. Adding further complexity into this setting is increased customer demand for service – 44% of contact center workforce management users cite this as a key roadblock in their pursuit to accomplish the goals demonstrated in Figure 1. This means that customers are no longer accepting a “one size fits all” customer engagement model; they expect product/service providers to tailor each contact center interaction based on their unique needs.

65%

43%

32%

10%

30%

50%

70%

Improve agentproductivity and

utilization

Improve forecastaccuracy in

predicting volume ofcustomer

interactions

Improve the qualityof customerinteractions

Percent of respondents, n=166

Companies with Contact Center WorkforceManagement Initiatives

Aberdeen’s PACE Methodology

Aberdeen applies a methodology to benchmark research that evaluates the business Pressures, Actions, Capabilities, and Enablers (PACE) that indicate corporate behavior in specific business processes:

√ Pressures — external forces that impact an organization’s market position, competitiveness, or business operations.

√ Actions — the strategic approaches that an organization takes in response to industry pressures.

√ Capabilities — the business process competencies (process, organization, performance and knowledge management) required to execute corporate strategy.

√ Enablers — the key functionality of technology solutions required to support the organization’s enabling business practices.



Figure 2: Top Pressures Driving Workforce Management Efforts within the Contact Center


Lack of visibility into customer traffic and increased expectations of personalized customer service are challenges that are primarily affected by factors outside an organization. Turnover of top quality agents with strong performance results is a challenge related to inefficiencies within a business. Inadequate internal processes used to retain and reward high-quality agents is a struggle faced by 24% of contact centers with active workforce management activities.

Best-in-Class Results Aberdeen used four performance criteria to study how contact center workforce management initiatives help Best-in-Class businesses differentiate themselves from Industry Average and Laggards (Table 1).

Table 1: Top Performers Earn Best-in-Class Status

Definition of Maturity Class Mean Class Performance

Best-in-Class: Top 20%

of aggregate performance scorers

• 75% first call resolution rate • 21.9% average year-over-year improvement in

customer satisfaction; 90% showed improvement • 15.7% average year-over-year improvement

(decrease) in average handle time; 79% showed improvement

• 11.8% average year-over-year improvement in agent utilization rate; 75% showed improvement

48%44%

24%

10%

20%

30%

40%

50%

Unpredictablecustomer traffic

Increased customerdemand for service

High turnover ofhigh-quality / top-tier

agentsPercent of respondents, n=166

Companies with Contact Center WorkforceManagement Initiatives



Definition of Maturity Class Mean Class Performance

Industry Average: Middle 50% of aggregate

performance scorers


customer satisfaction; 52% showed improvement • 2.6% average year-over-year improvement (decrease)

in average handle time; 44% showed improvement • 2.1% average year-over-year improvement in agent

utilization rate; 46% showed improvement

Laggard: Bottom 30% of aggregate

performance scorers


customer satisfaction; 37% showed improvement • 0.4% average year-over-year improvement (increase)

in average handle time; 38% showed improvement • 5.0% average year-over-year decline in agent

utilization rate; 34% showed improvement


Why These Metrics? Aberdeen asked survey respondents to rate the value of specific measures in assessing the results of their contact center workforce management programs. The top measures identified were customer satisfaction (83% of respondents), average handle time (77% of respondents), agent utilization (76% of respondents) and first call resolution rates (75% of respondents). The joint impact of the latter three performance measures reflect an organization’s ability to effectively operate a contact center - handling varying volumes of customer interactions and customer requests in a timely manner while maximizing the use of available agents. The first measure – customer satisfaction – indicates the overall success of a contact center in creating a positive experience for customers by ensuring timely and personalized service through knowledgeable and attentive agents.

The Best-in-Class PACE Model The ability to implement contact center workforce initiatives as a strategic differentiator to achieve organizational goals and to mitigate the pressures mentioned above requires a combination of strategic actions, business processes, and enabling technologies as shown in Table 2.

Table 2: The Best-in-Class PACE Framework

Pressures Actions Capabilities Enablers Unpredictable

customer traffic (unexpected peaks and valleys in volume of interactions)

Integrate business / contact center strategies more closely with workforce management strategies

Contact center activities are managed under single oversight Ability to adjust schedules to

accommodate new and unexpected staffing needs

• Time and attendance management

• Call recording • Knowledge management • Workforce optimization

Defining Metrics

The definition of each performance criteria in Table 1 is as follows:

√ First call resolution rate: The percentage of customer where a customer request is properly addressed by a contact center within a single call.

√ Customer satisfaction: Year-over-year change in satisfaction of a company's customers. There are multiple ways to measure this metric, but as this measure is reported only on a year-over-year basis, it is agnostic towards the different approaches used to measure customer satisfaction.

√ Average handle time: Year-over-year change in the average time it takes from the beginning of an interaction to its end. This measure includes both interaction and hold time.

√ Agent utilization rate: Year-over-year change in the percentage of agents who are actively serving customers during their salaried/paid time.



Pressures Actions Capabilities Enablers Increase the frequency

of tracking and measuring agent performance

Routing customers based on agent competencies and skills Proactively supply agents with

learning materials or important information to make their idle time more beneficial Ability to determine how training,

tenure, and rewards impact agent performance

• Automated agent routing • eLearning tools • Pre-hire assessment tools • Post-hire assessment tools • Employee engagement

surveys • Vacation planning tools


Best-in-Class Strategies Figure 3 shows the strategies deployed by Best-in-Class companies, in comparison to all others (Industry Average and Laggards). As shown, 50% of the Best-in-Class indicate alignment of overall contact center strategies with workforce management activities as a top strategy. This shows that the top performing contact centers are focused on bringing the multiple pieces of their contact center efforts (e.g. contact center analytics, speech analytics and quality compliance) closer to each other to ensure alignment between these initiatives. For example, a contact center with this strategy would determine how it could use its existing speech analytics deployments to analyze agent/customer conversations. By integrating the existing speech analytics activities with workforce management initiatives, these companies can identify the performance results for each agent, assess their competency skills and ensure quality compliance in a coherent fashion. In respective order, Industry Average and Laggard firms are 16% (50% vs. 42%) and 52% (50% vs. 24%) less likely than the Best-in-Class to utilize this strategy.

Figure 3: Best-in-Class Contact Center Workforce Management Strategies


50%

30% 30%

35%

42%

21%

10%

20%

30%

40%

50%

Integrate contact centerand workforce

management strategiesmore closely

Determine KPIs tomeasure agentutilization andproductivity

Increase the frequencyof tracking and

measuring agentperformance

Percent of respondents, n=166

Best in ClassAll Others

http://assessment.aberdeen.com/ZUK69c6isr/index.aspx



While top performers are focused on the big picture for aligning their contact center and workforce management strategies, Industry Average and Laggard companies have a narrower focus. These companies are 40% more likely (42% vs. 30%) than the Best-in-Class to spend their time determining the most relevant ways to assess agent productivity and utilization. The ability to identify performance results as they relate to agent utilization and productivity is a key activity, yet it’s only one piece of the puzzle. What differentiates Best-in-Class from all other companies is their ability to put together the pieces of the puzzle based on their core objectives. To this point, as illustrated in Figure 3, top performing contact centers are 43% more likely to regularly assess the performance of their agents in meeting their individual objectives that are tied to higher-level contact center related goals.

Case Study

A leading insurance services provider based in the US serves its customers with approximately 300 agents within its contact centers. The company has long been using workforce management initiatives as an informal part of its contact center programs. Two years ago, as a result of the increasing volatility in customer traffic and difficulty in forecasting this demand, the company deployed a formal workforce management initiative in order to improve its ability to forecast customer traffic through multiple channels. “The implementation of a formal contact center workforce management initiative is a reflection that as an organization we are aiming to be more proactive and planned in managing customer traffic, rather than being reactive,” says the VP/Center of Excellence for Contact Center in the company.

One of the reasons why the established workforce management processes were falling short of meeting volatile customer traffic was due to a lack of consistency in contact center data. Inconsistencies in information provided to supervisors and executives across different contact centers resulted in challenges aligning broader contact center activities, including workforce management. The company addressed this challenge by appointing the now VP/Center of Excellence to a newly established role responsible for overseeing the alignment between numerous activities across the company contact centers.

The next step in the journey to deploying a formal contact center workforce management program was focused on improving the accuracy of customer traffic forecasts. The company built a strategic partnership between the Contact Center and IT functions in order to gather historical information on customer traffic, and compile this information to ensure consistency of data for forecasting purposes. The VP/Center of Excellence for Contact Center says, “The collaboration between the Contact Center and IT teams was a critical part of our initial steps in implementing contact center workforce management within our company.”



Case Study

Once the company compiled historical customer traffic data and ensured its consistency, it was able to feed its workforce optimization technology tool with more accurate insights needed to develop agent demand forecasts. “The impact of using consistent historical data across all our contact centers has been dramatic; we have observed immense improvement in our agent demand forecast accuracy as a result of this activity,” says the VP/Center of Excellence for Contact Center.

In addition to developing an agile forecasting and agent scheduling mechanism, the company also started determining the common skills across its top-tier agents in order to identify the right skills required to succeed. This information is used as the core component of agent hiring, assessment, training and performance management activities. The company explains, “We’re committed to long-term success of our agents, as such we are responsible for ensuring that our agents are provided with the right skills and knowledge required to succeed as individuals.”

Contact center workforce management initiatives have yielded dramatic performance improvements for the organization. Over the past two years, it has successfully improved its first call resolution rate to 92% - outperforming the Best-in-Class performance. It also observed substantial improvement in agent utilization results, reducing agent idle time across the business. “In addition to achieving improvements across several key performance measures, our contact center workforce management initiative also helped us boost agent satisfaction and helped us increase agent retention results,” concludes the VP/Center of Excellence for Contact Center.

Key Capabilities As illustrated in Table 3, Aberdeen has identified nine key business processes and six technology enablers required to successfully implement the contact center workforce management strategies highlighted in Figure 3, and achieve Best-in-Class results.

Table 3: The Competitive Framework

Best-in-Class Average Laggards

Process

Ability to adjust schedules to accommodate new and unexpected staffing needs

85% 70% 52%

Routing customers based on agent competency skills

80% 70% 43%

Ability to predict staffing requirements across multiple sites



Best-in-Class Average Laggards 75% 57% 37%

Organization

Contact center activities are managed under single oversight

90% 62% 52%

Automatically schedule agents to meet forecasted activity levels

75% 55% 36%

Knowledge Proactively supply agents with learning materials or important

information to make their idle time more beneficial

75% 44% 32%

Enabling Technologies

• 85% Time and attendance management

• 80% Call recording

• 80% Knowledge management

• 80% Workforce optimization

• 75% Automated agent routing

• 75% eLearning tools

68% Time and attendance management 69% Call

recording 65% Knowledge

management 67% Workforce

optimization 60% Automated

agent routing 63% eLearning

tools

48% Time and attendance management 54% Call

recording 44% Knowledge

management 37% Workforce

optimization 42% Automated

agent routing 46% eLearning

tools

Performance

Ability to determine how training, tenure, and rewards impact agent performance

68% 43% 30%

Defined personalized incentive plans for agents

63% 53% 33%

Calculate the financial impact of an agent supply deficit to determine additional incentives in order to meet the demand

58% 29% 14%


Capabilities and Enablers Based on the findings of the Competitive Framework and interviews with organizations with contact center workforce management initiatives, Aberdeen’s analysis of the Best-in-Class demonstrates that these top performers are dedicated to using a certain set of business processes and technologies (Table 3), which help them optimize agent utilization and productivity while creating satisfied customers.

Process Seventy-five percent (75%) of Best-in-Class companies have an established process to predict staffing requirements across multiple contact center sites. This means that these top performing companies are focusing on optimizing the agent demand and supply equilibrium by scheduling agents

Fast Fact

Best-in-Class companies are 2.3-times more likely to use technical skills as an agent hiring criteria, compared to Industry Average and Laggard companies. In contrast, Industry Average and Laggard firms are 35% more likely to use customer empathy as hiring criteria, compared to the Best-in-Class.



across multiple sites based on customer traffic volume forecasts. Only 57% of Industry Average and 37% of Laggard businesses have this capability as a part of their contact center workforce management initiatives.

One of the challenges in scheduling agents based on demand forecasts is sudden changes in customer traffic. There are myriad factors influencing customers to engage with companies, while the use of predictive modeling and external information (e.g. news and industry reports) help companies with their demand forecasts, it is a daunting task to determine and collect data on every variable that might impact customer traffic. Addressing this challenge requires companies to be agile in their staffing practices. Indeed, data shows that top performing companies are 63% more likely (85% vs. 52%) than Laggards to be able to adjust agent schedules based on unanticipated changes. Figure 4 demonstrates how building such agility into contact center workforce management activities helps companies improve their year-over-year performance results.

Figure 4: Agile Agent Scheduling Results in Better Performance


In addition to ensuring availability of an adequate number of agents to handle customer interactions, top performers are also focused on connecting the right customer with the right agent. This means that each contact center interaction is routed by matching the nature of customer inquiry with agent competency skills. For example, if a customer calls a telecommunications services provider regarding a problem with their mobile device, they would be asked to provide details on their device and/or mobile operating system, and the contact center would route the customer to an agent with relevant knowledge regarding the specific mobile

11.9% 11.5%

5.6%5.3%

2.3%1.6%

-2%

0%

2%

4%

6%

8%

10%

12%

Customer satisfaction Number of quality SLA’s met

Average improvementin time to problem

resolution

Year

-ove

r-ye

ar p

erce

nt c

hang

e, n

=166

Companies with the ability to adjust agent schedules based onunanticipated changes in customer trafficAll Others

“Contact centers have a tremendous impact on influencing customer perceptions. Successfully managing these perceptions through effective customer interactions helps us drive repeat customers to our business. In addition to improved customer loyalty, managing our contact center workforce with an eye on customer experience results has helped us improve our industry rating and improved our cost structure through better processes and improved customer delight.”

~ VP of Contact Center at Large Global Financial Services Firm



device or operating system. Top performers are 86% more likely (80% vs. 43%) than Laggards to use this process.

Organization As noted above, one of the ways Best-in-Class companies differentiate their contact center workforce management activities is through better predicting customer traffic and building agile mechanims that handle sudden changes in agent demand. The back-end of such an agile system requires contact centers to build an organizational infrastructure that allows automating the agent scheduling process based on customer traffic. This creates a more agile organizational infrastructure that can automatically determine and schedule the number of agents needed across each site on a regular basis. Seventy-five percent (75%) of Best-in-Class companies deploy this capability as a part of their contact center workforce management activities, compared to 55% of Industry Average and 36% of Laggards. Data shows that agents in contact centers with this capability spend 29% of their salaried/paid time on non-productive tasks (time spent away from customer interactions and/or coaching and training), compared to 55% of agent time not utilized by contact centers without this capability. Considering the average hourly agent pay of approximately $13 across all the survey participants with contact center workforce management initiatives, this costs businesses without this capability $12,870 per agent that could have been avoided through better agent scheduling activities. In comparison, companies automatically scheduling agents based on customer traffic incur $6,084 less in unnecessary operational costs each year (Table 4). Assuming a contact center with 300 agents scheduled at any point in time, these cost savings equal $1.8 million each year.

Table 4: Automated Agent Scheduling Reduces Unnecessary Operational Costs

Companies automating agent scheduling based

on customer traffic All Others

Average annual pay for agent time spent idle $12,870

$6,786


Balancing the agent demand/supply equilibrium is a key operational task that helps the Best-in-Class make better use of their agents while reducing unnecessary operational expenses. Synchronizing these operational activities with overall contact center objectives is another key ingredient deployed 73% more widely (90% vs. 52%) by the Best-in-Class, compared to Laggard businesses. This is accomplished by managing contact center activities under a single oversight. This doesn’t necessarily mean having a single person managing all the contact center activities; it means a dedicated role/team responsible for developing a strategic plan to manage contact

“Deploying a formal contact center workforce management initiative helped us with large savings through reduced unnecessary operation expenses. This is primarily accomplished through right-sized staffing based on customer traffic volume forecasts as well as seasonality resource forecasting for SLAs, optimized schedules, and real-time load-balancing and traffic monitoring.”

~ Contact Center Manager at Large Insurance Services Firm based in the U.S.



center initiatives. This process also has close correlation with the top strategy used by top performing companies; integrating overall contact center and workforce management activities.

Knowledge Management Despite their skill-set in maximizing agent utilization, even the Best-in-Class organizations are struggling with agent time spent not engaging with customers. Top performers turn this challenge into an opportunity by using this time to supply the contact center agents with learning materials and important information to support continuous learning. These materials and information can vary based on agent profile, providing training on a broad array of areas, including technical training and quality compliance. Seventy-five percent (75%) of Best-in-Class companies currently use this capability as a key part of their contact center workforce management activities, compared to 44% of Industry Average and 32% of Laggard businesses. Data also indicates that companies with this capability achieve 5.1% improvement (decrease) in time spent by supervisors in assisting contact center agents, compared to 0.2% worsening (increase) by companies not using this process. This shows that building a continuous learning environment within the contact center helps companies reduce the need and time spent for managerial and coaching activities. These time savings can help contact centers focus more on other value-add activities.

Technology When it comes to leveraging technology tools to support contact center workforce management activities, Best-in-Class companies utilize a variety of enablers:

• Time and attendance solutions. Technology tools used to record the times agents log-in and log-off. It also keeps track of agent time spent engaging with customers, coaching and training as well as time-off or overtime. Eight-five percent (85%) of the Best-in-Class currently use this technology, compared to 48% of Laggards.

• Call recording. This technology helps companies record voice conversations taking place through the phone or an Interactive Voice Response (IVR) system. For the purposes of workforce management, it’s mostly used to record conversations between customers and agents for quality assurance, agent training and performance monitoring. Best-in-Class companies are 54% more likely than Laggards to utilize this technology.

• Knowledge management. Contact centers use knowledge management systems to identify, store and share best practices that help their agents do their jobs better. This technology allows companies to share these best practices with other agents in order to empower them with the right knowledge to help them perform better. Companies using this technology achieve 22% greater first

Home-Based Agents

√ Findings from this study reveal that 7% of the in-house contact center workforce across all companies are employed as home-based agents.

√ Best-in-Class companies expect a 10.2% increase in the number of their home-based agents during 2012, compared to the Industry Average projecting a 3.2% increase and Laggards a 14.4% decrease.



call resolution rates (60% vs. 49%), compared to those without this technology.

• Contact center workforce optimization. This technology typically enables companies with a wide array of capabilities, including call routing, call recording, quality assurance and speech analytics. While some businesses use these features through stand- alone technology tools, workforce optimization allows companies to have the ability to coordinate these activities within a single platform. Eighty-percent (80%) of Best-in-Class companies are using this technology as an integral part of their contact center activities, compared to 67% of Industry Average and 37% of Laggard businesses. Figure 5 shows the performance results accomplished by companies using workforce optimization.

Figure 5: Workforce Optimization Tools Deliver Business Value


• Automated agent routing. This technology is highly correlated with the process capability noted above – routing customers based on agent competency skills. It allows companies to automatically route each customer to a relevant agent with the right skills needed to serve the customer. Data shows that Best-in-Class companies are able to determine the skills of existing agents through use of post-hire assessment tools. They are more than twice as likely (50% vs. 22%) as Laggards to use these tools to frequently monitor the competencies of each agent. Research validates the close correlation between skill-based routing and this technology; companies routing customers based on agent competency skills are far more likely (76% vs. 30%) to use automated agent routing, compared to those that don’t.

• E-learning tools. These tools allow companies to support contact center agents with continuous learning opportunities through online

12.3%

6.1% 5.9%5.0%5.2%

-0.2%

1.5% 2.0%

-1%

1%

3%

5%

7%

9%

11%

13%

Customersatisfaction

Agent retentionrate

First callresolution rate

Averageimprovement in

handle time

Year

-ove

r-ye

ar p

erce

nt c

hang

e, n

=166 Users of workforce optimization

Nonusers

Payback Period

√ For the purposes of this study, payback period is defined as the average amount of time it takes a company to recover the total cost of its investment(s) through incremental revenue gains and/or cost savings resulting from a technology implementation.

√ The average payback period for Best-in-Class workforce optimization technology implementations is 33% better (4.4 months vs. 6.6 months) than Laggard companies.

“It is critical to use automation tools in order to streamline key contact center activities, including forecasting and scheduling.”

~ Manager of Contact Center Operations at Mid-size Global Transportation Services Firm



portals. Supervisors can post training content on these portals, and agents can access this content on-demand, as needed. Top performing contact centers are 63% more likely (75% vs. 46%) than Laggards to empower their agents with this technology.

Performance Management In addition to being 63% more likely (85% vs. 52%) to adjust agent schedules based on unanticipated changes in customer traffic, Best-in-Class companies are also calculating the financial impact of this process. Fifty-eight percent (58%) of these top performers measure the potential impact of an agent supply deficit on contact center activity results in order to determine additional incentives for agents and meet customer demand for service. Measuring the average cost of an unhandled customer interaction or one that had an above average hold time, would allow companies to determine the potential loss associated with an agent supply deficit. By measuring the impact of these potential consequences, companies are able to identify how much they can pay/incentivize each agent in order to meet sudden changes in agent demand.

Creating agent incentive plans is not solely aimed to reduce the agent supply deficit. It also helps companies align agent activities with contact center goals. As one of the top workforce management strategies is integration with overall contact center goals, this process allows companies to incentivize each agent based on how they contribute towards these overall objectives. By defining the key goals that will guide contact center interactions, companies can help supervisors measure agent performance in comparison to achievement of these overall objectives. Findings reveal that contact centers tailoring incentive plans for agents in alignment with their overall objectives achieve far greater year-over-year performance improvements, compared to those without personalized incentive plans.

Figure 6: Incentivize Agents with the Right Goals


12.9%

10.7%

6.3%

3.4%

5.5%

2.7%

0.4% 0.8%

0%

2%

4%

6%

8%

10%

12%

14%

Customersatisfaction

Number of quality SLA’s met

Improvement inagent overtime

costs

Average revenueper call

Year

-ove

r-ye

ar p

erce

nt c

hang

e, n

=166

Companies with defined personalized incentiveplans for agentsAll Others



One of the best ways of monitoring agent performance in correlation with incentive plans is to determine how key factors such as training, tenure and rewards impact agent performance. Best-in-Class companies are twice as likely (68% vs. 30%) than Laggard companies to deploy this capability. Doing so enables contact centers in these top performing firms to identify characteristics of high-quality/top-tier agents. Once these competency skills are determined, they can be used across a wide-array of talent management activities, including agent hiring, assessments, training and performance management. Data shows that companies with this process are able to improve (decrease) the average cost per customer contact by 3.1% year-over-year, compared to 0.1% improvement by companies without this process. In addition to gaining cost efficiencies, these businesses also accomplished far greater (3.4% vs. 0.8%) year-over-year results in average revenue per customer contact, validating that this process helps companies reduce the cost of customer contacts while improving the revenue associated with these interactions.

Key Takeaways Whether a company is trying to improve its performance in contact center workforce optimization from Laggard to Industry Average, Industry Average to Best-in-Class or maintain Best-in-Class results, the following actions will help spur the necessary performance improvements:

Laggard Steps to Success: • Adopt a multi-channel approach when forecasting

customer traffic/agent demand. More than one-third of Laggard organizations are using at least three unique channels (e.g. voice and email) to engage customers through the contact center. Yet, only 46% of these companies are able to interpret how customer traffic taking place through multiple channels impacts agent demand. In comparison, 76% of Industry Average contact centers are able to develop agent demand forecasts by combining historical and recent multi-channel customer traffic data. Laggard companies should adopt this capability and follow the foot-steps of their Industry Average peers in order to improve their performance results in key measures such as agent utilization.

• Connect the right customer with the right agent. Data shows that companies using an automated system to route each customer request based on agent competency skills achieve more than twice greater year-over-year performance (4.8% vs. 2.1%) in average time to problem resolution, compared to those without this system. Currently only 43% of Laggard companies are able to create the right match between customers and contact center agents. Laggard firms should start implementing this process by defining the competency skills of their agents and deploying a process to determine the common characteristic of customer requests in correlation with these competency skills. This would

Demographics

Of the 166 responding organizations, demographics include the following:

• Job title: Senior Management (18%); EVP / SVP / VP (9%); Director (18%); Manager (39%); Other (16%)

• Department / function: Contact Center (33%); IT (11%); Customer Service (11%); Sales (10%); Operations (9%); Human Resources (5%); Other (21%)

• Segment: Financial services (15%); Telecommunications equipment & services (13%); Government/public sector (9%); Software (8%); Insurance (7%); IT consulting/services (6%); Business process outsourcing (5%); Utilities (5%); Other (32%)

• Geography: Americas (52%); APAC region (9%) and EMEA (39%)

• Company size: Large enterprises (annual revenues above US $1 billion)- 27%; midsize enterprises (annual revenues between $50 million and $1 billion)- 42%; and small businesses (annual revenues of $50 million or less)- 31%

• Number of seats: Below 50 seats – 47%; 51 to 250 seats -31%; 251 to 500 seats – 11%; Over 500 seats – 13%



allow them to create the infrastructure needed to create the right customer/agent connections.

Industry Average Steps to Success: • Use customer feedback data to assess agent performance

and competencies. Traditional operational metrics such as first call resolution rates and average handle times are valuable measures used by more than 90% of contact centers today. While the insights gleaned through these measures provide a reflection of the effectiveness of each agent in meeting operational KPIs, equally important is use of customer feedback. Twenty-two percent (22%) of Industry Average contact centers use tools such as post-call surveys and/or text analytics to assess the performance and skills of their agents. This compares to 60% of Best-in-Class contact centers using the Voice of the Customer (VoC) as a key part of their contact center workforce management practices. Industry Average firms should incorporate this process within their contact center initiatives in order to better the relationship between customer sentiment and agent performance, and ultimately improve their performance to Best-in-Class status.

• Make agent idle time more beneficial. Top performing contact centers have special emphasis on supporting their agents with the relevant information and skills to help them achieve their objectives. One of the main ingredients of this process is proactively supplying agents with learning materials and/or important information designed to help agents turn idle time into effective time. Data shows that agents supported by such proactive learning material experience 14.9% year-over-year improvement in the number of quality Service Level Agreements (SLAs) met, compared to 2.1% by companies without this capability – this affirms the importance of such continuous learning systems in helping companies ensure better and more frequent compliance with SLAs. Only 44% of the Industry Average firms are currently focused on making better use of agent idle time, compared to 75% of the Best-in-Class. Thus, the next step for Industry Average firms should be focusing on providing a continuous learning environment to agents – this would help these companies improve their performance results to the next phase: Best-in-Class.

Best-in-Class Steps to Success: • Build a pipeline of quality potential recruits. The risk of losing

overqualified and high-quality agents during periods of economic recovery or expansion is significant for all contact centers, even the Best-in-Class. Ensuring a balance in agent supply and demand requires these contact centers to develop contingency plans by continuously monitoring the marketplace for potential hires in order to build a pipeline of quality potential recruits. Deploying this



process is a necessary business continuity activity that will allow Best-in-Class contact centers to maintain high performance in metrics such as average handle time, customer satisfaction and first call resolution rates.

• Benchmark workforce management results against external data. Best-in-Class contact centers have a keen focus on managing agent performance results in alignment with their overall contact center objectives. Despite having well-established processes to track and measure agent performance results, data shows that 63% of these top performing contact centers are not benchmarking these results through external data. Doing so would help these firms understand how their contact center workforce management activities compare against competitors as well as industry standards. As a result, they would reduce the risk of using outdated internal performance benchmarks and rather deploy a progressive model that ensures updating of performance assessments based on market trends.

For more information on this or other research topics, please visit www.aberdeen.com.

Related Research

Customer Feedback Management: Leveraging the Voice of the Customer to Amplify Business Results; April 2012 The ROI of Best-in-Class CEM Programs; March 2012 Social Collaboration Powers Top-Notch Customer Engagement Programs; February 2012 Customer Experience Management: Using the Power of Analytics to Optimize Customer Delight; January 2012

Customer Relevancy Drives Precision Marketing in the Mobile Channel; January 2012 Contact Center Analytics: Better Interactions, Happier Customers; October 2011 Leveraging the 360 Degree Customer View to Maximize Up-Sell and Cross-Sell Potential; September 2011 The Business Value of a Cloud-Based Contact Center; June 2011

Author: Omer Minkara, Senior Research Associate, Customer Management Technology Group, ([email protected]), LinkedIn, Twitter

For more than two decades, Aberdeen's research has been helping corporations worldwide become Best-in-Class. Having benchmarked the performance of more than 644,000 companies, Aberdeen is uniquely positioned to provide organizations with the facts that matter — the facts that enable companies to get ahead and drive results. That's why our research is relied on by more than 2.5 million readers in over 40 countries, 90% of the Fortune 1,000, and 93% of the Technology 500. As a Harte-Hanks Company, Aberdeen’s research provides insight and analysis to the Harte-Hanks community of local, regional, national and international marketing executives. Combined, we help our customers leverage the power of insight to deliver innovative multichannel marketing programs that drive business-changing results. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 854-5200, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com. This document is the result of primary research performed by Aberdeen Group. Aberdeen Group's methodologies provide for objective fact-based research and represent the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group, Inc. and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group, Inc. (2012a)

http://www.aberdeen.com/

http://aberdeen.com/Aberdeen-Library/7592/RA-customer-feedback-management.aspx



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http://aberdeen.com/Aberdeen-Library/7778/AI-customer-experience-management.aspx

http://www.aberdeen.com/Aberdeen-Library/7722/AI-social-customer-engagement.aspx

http://www.aberdeen.com/Aberdeen-Library/7722/AI-social-customer-engagement.aspx

http://www.aberdeen.com/Aberdeen-Library/7460/RA-customer-experience-satisfaction.aspx



http://aberdeen.com/Aberdeen-Library/7619/AI-mobile-marketing-customer.aspx

http://aberdeen.com/Aberdeen-Library/7619/AI-mobile-marketing-customer.aspx

http://www.aberdeen.com/aberdeen-library/7243/RA-contact-center-analytics.aspx

http://www.aberdeen.com/aberdeen-library/7243/RA-contact-center-analytics.aspx

http://aberdeen.com/Aberdeen-Library/7074/RA-cross-sell-sales-effectiveness.aspx



http://www.aberdeen.com/aberdeen-library/6844/RA-contact-center-cloud.aspx

http://www.aberdeen.com/aberdeen-library/6844/RA-contact-center-cloud.aspx

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