Call Centers to Earn $14 B by 2025, But Will It Be an In-Office or WFH Future?

Credit: nicolagiordano

Call center outsourcing has been a bastion of remote work for decades before COVID-19 and has shown resiliency amid the persistence of the pandemic. In a recent report by Technavio, it was found that the global call center outsourcing market is projected to grow by $14.05 billion from 2020 to 2025, at an annual rate of 3.34%. The market also enjoyed a 3.12% year-over-year growth in 2021. This is remarkable, considering that COVID-19 led to the closure of many call centers, on top of the industry’s historically high attrition rate.

Several key drivers have boosted the global call center outsourcing market. One of which is the sustained rise of developing countries as call center destinations. Contributing 35% to the industry’s overall growth, the APAC region is home to many nations that deliver performance despite low labor costs, with economies like India, Australia, and the Philippines at the fore. Another driver is the strategic mergers, acquisitions, and alliances between call center enterprises. This has paved the way for intense competition and enhanced value propositions.

Significant as these factors are, they are potentially outweighed by a tech-related driver: the adoption of software solutions. Many call centers and contact centers have been relying on robotic process automation (RPA) software, which leverage AI and machine learning, to optimize and automate workflows. These platforms shorten call durations, automatically extract caller data, eliminate or shorten complex steps, and emulate human actions.

Moreover, to abide by today’s remote and hybrid work policies, most call centers have deployed remote call center software. These efficient tools enable agents to work from home (WFH) and have also fueled a debate on whether companies should maintain a remote workforce even after the pandemic.

So, should they?

In-Office vs Work-from-Home Call Centers

COVID-19 caused a seismic shift in the global call center outsourcing market. The share of agents working from home, according to an SQM report, jumped from 19% in 2019 to 87% in 2021. Post-COVID, 48% of agents would likely continue the arrangement while 86% of customer service enterprises are looking into implementing a permanent work-from-home model. They may be on to something based on recent data.

Costs

One of the biggest advantages of the work-from-home model is its lower costs. On the employee side, agents won’t have to deal with the expenses for transportation, work attire, and restaurant food. Meanwhile, employers won’t need a sizable workspace to accommodate the workforce, and this also goes for activities like training and development. Likewise, the cost of buying and installing hardware, software, and other workspace equipment drops significantly with a work-from-home model.

Customer Satisfaction

This might come as a surprise but WFH agents appear to be outdoing their in-office counterparts. In 2020, when remote work policies were first implemented, 55% of call centers reported an improvement in customer satisfaction (CSAT) scores, and 20% said the scores remained the same. In 2021, the results were similar, with 49% reporting an increase in CSAT scores, 36% a decline, and 14% having the same scores. The slight dip in 2021 has been attributed to employee turnover by enterprises, not the actual performance of the agents.

Average Handling Time

Interestingly, the average handling time (AHT) of in-office agents is shorter than WFH ones. In 2019, prior to WFH arrangements, the AHT clocked in at 545 seconds. This increased to 559 seconds in 2020 and 589 seconds in 2021. However, this does not mean that in-office agents truly edged the WFH employees in this area. Besides high employee turnover, many companies have leveraged RPA software and self-service portals that enable customers to resolve simple problems on their own. This leaves the WFH agents with “tougher” calls.

Employee Turnover

Although agents typically prefer working from home, the turnover rate increased last year. Prior to the pandemic in 2019, the rate was 28%. This went down to 24% in 2020 but leaped to 35% in 2021. As such, in-office work holds an advantage in this regard. Possible reasons for the currently high turnover rate are the ease of finding remote jobs online, coupled with the limited security of WFH setups, and the intense competition in the industry.

Other advantages of WFH models include attracting more job applicants, higher first-call resolutions, and better work-life balance for agents. Meanwhile, in-office models carry an edge in security, employee onboarding, and network and bandwidth reliability.

Overall, critical areas like costs, customer satisfaction, agent performance, and agent satisfaction are all in favor of WFH models. At the end of the day, businesses are most concerned about the numbers. And these numbers state that remote work would likely stay for a long time.