At a recent seminar I asked the audience for a show of hands of how many people thought their call center reps were the most important brand ambassadors in their company. All hands went up. I followed up that question with, “How many of you pay them to reflect their status as being that influential to your brand?” Not surprisingly all hands went down as nervous laughter filled the room.
We view the call center as an entry-level position and pay accordingly. Because of the large percentage of company employees in the call center, call center labor costs are a high proportion of the overall company budget and the customer service organization is pressured to keep CSRs salaries low. As a result, it is difficult to find good employees who can deliver high quality service and who are committed to the organization for the long term.
And it’s true that if you hire hundreds of agents, paying even one dollar an hour more will add up very quickly. This is of course why call centers traditionally, especially for lower skilled positions, offer low rates of pay- usually about 20% above minimum wage. This low rate of pay does save money in the short run. However, when you began to consider the different levels of agents and add in the total cost per rep per transaction, you will likely find investing in higher qualified reps will save you money in the long run. For example, consider the scenario of hiring reps at $12 per hour vs. $14.40, a 20% premium. If you have one hundred agents, the difference between these salaries is about $500,000 annually, and it may seem prohibitive to consider raising salaries to that level. But let’s assume with the higher rate of pay you can hire more skilled reps, resulting in higher first call resolution, and increased productivity and quality scores. As your first call resolution increases, callbacks are reduced. Combined with the higher productivity it is reasonable to assume you now only need eighty-five agents where you previously needed one hundred. The higher skilled agents also mean you can sustain a higher ratio of reps to supervisors, and you will not need to do as much QA monitoring, saving in QA costs.
With the higher rate of agent pay, however, you will also need to raise the rates you pay your supervisors. But let’s assume you spend the same total amount, now just divided among six supervisors instead of eight.
Now let’s also assume the higher rate of pay reduces attrition, saving you recruiting expenses and the training costs associated with a typical three week new hire training course. As the below table indicates, your costs are now virtually identical.
Twenty percent increase in rep pay, identical overall CS costs.
This does not take into account savings in real estate and equipment costs. When these are factored in, those numbers will certainly result in an overall savings from increasing the pay 20%. In addition to this savings, with the higher pay you will find a much more satisfied and engaged staff, resulting in overall higher quality of service offered to your customers.
Randy Rubingh is Director of Customer Service for StubHub and author of Call Center Rocket Science: 110 Tips to Creating a World Class Customer Service Organization. Randy’s book is available on Amazon in paperback or digital download.