November 2001
 

BY WILLIAM DURR, JR. AND OFER MATAN, BLUE PUMPKIN SOFTWARE

The contact center industry has used the term 'workforce management' to describe systems that enable people to deal effectively with the complexities of demand forecasting and staff scheduling. While these systems can increase efficiency dramatically, they are only one part of a more comprehensive solution that increases the productivity and performance of customer-facing employees. Some of the other essential components include planning, budgeting, performance evaluation, skill-gap analysis, recruiting, developmental and remedial training, and recognition and reward systems.

Workforce Management
The function of a modern contact center can be described quite simply: groups of agents serve differing customer populations to meet their needs while attempting to achieve one or more of the following goals:

• Revenue,
• Profit,
• Customer satisfaction,
• Service levels, and
• Quality-of-service (QoS).

These goals, together with the volume of various interaction types, determine the makeup of the workforce, in particular, its size and its needed skill sets. Planning for and managing this workforce to meet corporate goals is not easy because the entire contact center environment is constantly in flux. Customers are in flux due to changing markets, competitive pricing pressures and general economic conditions. The nature of the contacts is changing due to new products and services, shifts in customer habits and new contact media. Last, the workforce itself changes. Employees leave. The job market changes, affecting the labor pool. In addition, the skill requirements for the contact center change due to increased complexity of the contacts.

Workforce management processes in the contact center today tend to result in a relatively myopic view of the management task; i.e., they are limited to demand forecasting, staff scheduling and tracking. This is evidenced by the disturbing realization that forecasting and scheduling systems will help ensure the agent team you currently have is deployed as effectively as possible. You will never achieve best-in-class performance if all you ever do is optimize a mediocre team.

Workforce Optimization
Looking at the variety of practices and systems in a modern contact center, we notice that many of them dramatically impact the issue of 'workforce preparedness' and could also be considered workforce management tools. The most obvious candidates are quality monitoring, recruiting and training. While each of these individual practices and systems lends itself to great savings and improvements in productivity, its full potential is unrealized unless used in conjunction with other systems and seen as part of a larger context. When these different practices work together in a synergistic way, the workforce is transformed into a mission-critical element of corporate strategy. We refer to this synergistic set of practices as 'workforce optimization.'

The workforce optimization cycle creates and monitors a match between customer demand and appropriately skilled employees. A good implementation of a workforce optimization strategy is dependent on many diverse contact center systems and practices.

The following is a description of workforce optimization that ensures consistent long-term matching of resources with the company's market objectives.

• Long-term planning permits center management to forecast the volume and nature of transactions they will have to handle over the course of the year.
• Demand forecasts coupled with corporate goals determine the sizing and the mixture of the various agent skill sets that will be required to meet quality-of-service requirements.
• Comparisons can be made between the skill inventory of the existing agent population and the implied makeup of the required future population. This difference can be called the 'skill gap.'
• Actions designed to close group and individual skill gaps are the key to increasing the productivity and success of the workforce in achieving its goal.
• The ability to assess the current skill inventory and decide on corrective actions is dependent on performance evaluation of individuals and organizations.

Information Tracking And Performance Evaluation
Evaluation is the last step in the workforce optimization figure -- since companies need to generate data before they can analyze it. Evaluation is the very first thing to consider. The reason is that information fuels both strategic and tactical workforce optimization. The contact center is an incredibly data-rich environment, but often information is not easily interpreted by, or accessible to, the people who need it.

The data needed are well-defined performance metrics that can be tracked and made accessible to people responsible for delivering service. Centralized performance information can be automatically collated and mined from the transactions between employees and customers in CRM databases, voice logs, customer satisfaction surveys, transaction logs from ACD, CTI and e-mail routing systems and the extensive HR database systems.

This performance information should be accessible to all levels. A well-designed system is one that is fully inclusive. Participation should range from the individual employee through first-line management, middle management and upwards to executives. An individual at any level can review his or her objective performance criteria every day, providing opportunities for behavior adjustment in real-time.

For example, agents have a right to understand how they are performing with respect to their individual goals and in comparison to their peers. Since businesses must adjust at a faster pace than ever before, annual or even semi-annual performance reviews have become inadequate. Given timely performance feedback, many employees are able to modify their behaviors based on their own efforts. In effect, constant feedback enables some agents to coach themselves to better performance.

Performance evaluation is also the key to identifying which agents seem to be struggling with their responsibilities. Armed with productivity and quality reports, supervisors and coaches can work with the agent teams to help improve their skills.

Forecasting Contact Demand And Skill Requirements
While many contact centers forecast demand with great success, they are often unable to meet that demand with the appropriate head count. We attribute this to the fact that long-term budgetary and head count planning is not executed with appropriate depth.

The best practice requires much of the planning depicted in the strategic cycle to be done before a budget and head count can be set. The key to workforce optimization is the consistent drive to meet skill gaps by adapting the workforce through different strategies, which requires adequate budgeting. Taking into account individual performance metrics with compensation, developmental and remedial training costs gives insight into the true costs of the existing staff. Armed with a better understanding of existing costs, management can begin to make determinations regarding costs associated with securing new talent for the agent pool.

Translating the customer demand forecast into a skill requirement forecast requires clear quality-of-service (QoS) goals. This means much more than the knee-jerk 'we want to answer 90 percent in 20 seconds' target. Beyond service-level metrics, the QoS goals should include specific quality and value metrics that will translate into particular skills and skill levels. Such metrics could include percent of first call resolutions, number of customer defection turn-arounds and cross-sells, or even a courtesy assessment. All these help determine skill and productivity requirements that will later drive hiring/training and compensation strategies. The QoS metrics are also an essential part of the performance evaluation, which determines if the execution phase is working according to plan.

One area that is often not taken into consideration in either long-term or short-term planning is appropriate overhead. Typically, it is necessary to staff between 20 and 40 percent more work hours than the contact demand strictly requires. This is due to obvious overhead such as sickness, vacation and training. Training, in particular, is frequently ignored in long-term planning and either done ad-hoc or not at all. This approach is short-term-oriented -- you may have the correct head count and may be answering the phone within 20 seconds, but the quality of the interaction is poor or you lose agents due to stress.

Closing Skill Gaps
Skill gaps fluctuate over time and are a natural course of doing business. They change due to fluctuations in customer demand, corporate needs, employee stagnation or attrition, and structural productivity issues. Addressing the skill gaps over time is the key to optimizing the workforce to deliver the best customer relationship value. Skill gaps may be as follows:

• Strategic (' We will start selling a product aimed at senior citizens next year. We will need people with additional expertise that we don't currently have.')
• Tactical ('We are missing Vietnamese speakers for the swing shift in May.')
• Personal ('Joe needs training in objection handling.')
• General ('Product knowledge of Widget X is weak.')

Analyzing the skill gaps and coming up with plans to close them is one of the most interesting and challenging aspects of managing a contact center. Here are a few gap-closing components:

Training. Having developed better individual performance evaluation metrics, management is enabled to identify individual skill gaps. Since training costs are high and training time always scarce, workforce optimization also encompasses developmental and remedial training practices. Computer-based education delivered to the desktop (and scheduled at most appropriate times) through ubiquitous Web browsers is rapidly supplanting traditional classroom education by virtue of its reduced expense, individual audit trails and accommodation of differing learning rates and styles.

Recruiting. Having a clear picture of current agent performance and a better understanding of future agent pool requirements confers a special insight to contact center management teams. This kind of insight permits the recruiting process to be more effective. Instead of informing human resources that additional agents are needed, center managers can literally specify what skill set is required for which hours of the day and week. Clearly, there is much greater efficiency associated with a specific recruitment request rather than a generalized one. This goes a long way in avoiding the high cost of recruiting and training new agents only to lose them in a matter of months owing to unrealized expectations on both sides.

Scheduling. Pseudo-schedules can be created for future periods wherein the existing staff is matched with the future transaction demand. Gaps in skill set as well as shift coverage can be identified with much better precision than previously possible. This relates to both allocation of training during down time and the identification of the target skills to cross-train. Total re-engineering of shifts can also allay some skill gap problems.

Recognition and reward. Skill gaps can be reduced by increased productivity (this is not necessarily number of contacts handled but other QoS metrics that were discussed earlier). There is evidence that productivity can be increased by well-designed compensation packages that motivate and reward agents.

Workforce optimization, as we have defined it, is an iterative process combining well-understood, short-term tasks with a number of lesser-understood, long-term tasks. The full potential of customer relationship management initiatives can never be realized without creating a contact center environment where continuous attention is given to closing group and individual skill gaps. When all existing disparate processes are brought together with appropriate software tools and management best practices, a much higher level of performance can be realized.

This approach to management leads to an optimized workforce to handle customer demand. This in turn creates improved service levels, interaction quality, customer satisfaction, loyalty and enterprise profitability.

The authors are with Blue Pumpkin Software, a provider of enterprise software applications and services for businesses. Bill Durr is chief evangelist at Blue Pumpkin. Dr. Ofer Matan is cofounder of Blue Pumpkin. The authors wish to thank Kris Baz'n, Tiffany Boehmer, Joanne Ehrich and Serdar Uckun for their assistance in preparing this article.

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