March 1999

Automating For Better Workforce Management

BY PENNY REYNOLDS, TCS MANAGEMENT GROUP, INC.

In today's call center, where the overwhelming majority of ongoing expense is related to staffing, getting the right number of staff in place to answer the calls is critical to call center success and profitability. Overstaffing results in spending needless dollars for additional staff, while understaffing lowers service levels and detrimentally influences morale, contributing to staff turnover.

Call center managers have a wealth of performance and service statistics available to them from the automatic call distributor (ACD) to manage staffing levels to minimize cost and maximize service. Call volume, time-of-day call distribution and call handle times are readily available, along with information about individual and team productivity. All this information can be used to estimate future call volumes, predict how many staff members will be required to handle the calls and determine workforce schedules that best match the workforce to the incoming call workload.

The Need For Automated Systems
The trend in call centers is, in a word, growth. An increased volume of calls, coupled with the growing complexity of staff scheduling (longer operating hours, weekend shifts, mixture of full- and part-time staff, etc.) make workforce management problems ideally suited for the computer. Workforce management software, combined with the historical and real-time statistics of the ACD, is an essential tool for a professionally managed call center in today's world.

The basic functions associated with a workforce management software system are as follows:

• Call volume forecasting. A workforce management system uses the ACD's historical and current call information to predict future call volume based on overall calling trends, seasonal factors and other predictable calling patterns. To incorporate any changes in calling patterns, forecasts are automatically updated with new information through a direct ACD interface.
  
  
• Staffing calculations. A telephone traffic engineering technique is used to determine the required number of staff based on the forecast workload. This technique, called Erlang C, takes into account the random arrival of calls into the center, as well as the "hold for the first agent" queuing that typically takes place.
  
  
• Staff scheduling. "Bodies in chairs" staff requirements along with nonproductive time estimates (for breaks, trainings, meetings, etc.) are used to determine a schedule requirement for each half-hour or quarter-hour period. A set of optimal schedules is then created based on these requirements and a call center's unique scheduling rules and constraints. These schedules are then assigned to staff based on shift bid rules and employee preferences.
  
  
• Day-to-day performance tracking. Perhaps the most critical component of a workforce management system is the intra-day comparison of actual performance against the plan. Call center management must actively compare the actual number of calls by half-hour to the call forecast, actual call handle time against estimated handle time and actual number of staff on the phones to the schedule plan. The call center manager needs to see these changes as they are happening to make necessary adjustments as quickly as possible.

Cost Justifying Workforce Management Tools
Not all call centers need an automated system to accomplish workforce management tasks. Need is a function of size and operating complexity. Generally, call centers with more than 30 agents and an increasingly complex scheduling environment (expanded hours or days of operation, for example) can cost justify automating these functions.

An automated workforce management system generally produces measurable improvements in the following areas:

• More efficient scheduling. The savings associated with more efficient scheduling can take many forms, including reduced overall staff hours, reduced need for overtime and identification of overstaffed periods to offer time off without pay (see Table 1). Workforce management system users generally experience a minimum reduction of staff hours of 2 percent and average potential is in the 5 to 10 percent range.
  
  
• Automation of workforce management tasks. Depending on how often forecasting and scheduling tasks are performed and to what degree they are currently automated, a wide range of savings in staff time may result from automating them with a full-featured workforce management system. It is generally expected that at least 25 percent of administrative and managerial time currently devoted to the manual performance of these tasks can be saved (see Table 2).
  
  
• Reduction in workforce shrinkage. Many hours of staff time are lost in most call centers due to excessive amounts of nonproductive time (time spent not handling calls). An automated workforce management system can provide historical and real-time information on schedule adherence and schedule exceptions for better management and control of staff, reducing workforce shrinkage from 1 to 5 percent in most call centers (see Table 3).
  
  
• Reduction in network costs. A more consistent level of service to callers and a reduction in queue time and toll-free network costs (see Table 4) can be achieved with the workforce management software's creation of a set of schedules that minimizes understaffing as well as overstaffing.
  
  
• Increased revenues. For call centers that realize revenue by answering calls (catalogs, reservations centers, etc.), workforce management automation can help reduce queue times and improve service, thereby reducing the number of abandons and increasing the number of revenue calls completed.

(To determine an estimated payback period, take the estimated savings from the five bullet points above for estimated annual savings or divide by 12 for an estimated monthly savings in the first year of implementation. The payback period on such a system can be calculated by dividing the one-time purchase price by the average monthly savings.)

In addition to these measurable cost savings, there are many intangible benefits. Perhaps the biggest of these is the addition of a sophisticated "what-if" planning capability that allows management to forecast and plan staff needs for the short-term to respond to unexpected changes, as well as to address long-term budgeting and planning.

Selection Guidelines
Organizations considering a workforce management purchase should heed the following guidelines:

• Cast a large net. Invite all qualified vendors to present their products. Insist on a detailed demonstration and ask lots of questions about how the package would work in meeting your center's specific mode of operation. Remember, you're looking for full range of functionality in addition to ease of use.
  
  
• Talk to others who have done it. At a minimum, talk to people from four or five other organizations similar to yours (in size, type of operation, ACD brand) who have implemented a system. Visit at least two of these companies and talk to managers about the benefits they've received and to the day-to-day users about ease of use and customer support.
  
  
• Consider the support capabilities of each vendor. Workforce management software systems are not simple, off-the-shelf packages. They typically require specialized training and ongoing consultative support to make the most of their capabilities. Ask about documentation, training and access to customer support. It's also important to understand what to expect about future upgrades and enhancements.
  
  
• Don't suffer "sticker shock." Depending on whether you are considering a single module or a comprehensive integrated system, prices for workforce management systems cover a wide range. Some of the more comprehensive packages may seem expensive, but don't lose sight of the fact that each agent employee may have a fully burdened cost of anywhere from $30,000 to $50,000 annually. Saving just a couple of employees' labor expenses can quickly justify the most expensive package.
  
  
• Plan for a successful implementation. During the purchase process, it is critical to motivate everyone in the call center to participate. While implementing workforce management results in a more efficient operation and a less stressful environment in the long run, it is important to realize that such an implementation may mean a cultural change for agents, supervisors and management in the short-term. The largest potential benefit is more efficient scheduling, but in order to accomplish this, some agents' schedules will have to change. It is important to devise a communications and motivation strategy that accentuates the positive effects and takes into account everyone involved in the workflow and schedule planning.

Accomplishing Profitability And Service Objectives
Whether large or small, the objective of any business is to accomplish the most work at the highest level of service at the lowest cost. This objective is achieved through workforce management. The larger the workforce and the more complex the task, the more suited the problem is for automation.

Not only do automated systems save substantial management and clerical time, but they can also reduce personnel costs dramatically by optimizing the staffing resource. Benefits include a more precise forecast of future call volumes that shows the peaks and valleys of calls, exact determination of staff needed for each period to minimize overstaffing and understaffing and the ability to monitor call center performance and make adjustments as needed within the day. The end result is the ability to handle more calls at a better level of service to the caller at a reduced cost.

Penny Reynolds is a senior consultant with TCS Management Group, Inc., which specializes in providing sophisticated workforce management solutions and consulting services to call centers of all sizes and configurations. Reynolds also teaches courses and seminars for Call Center University, a vendor-neutral educational division of TCS, and is a frequent speaker at call center industry conferences.

___full-time staff @ $___/yr.

___part-time staff @ $___/yr.

Total annual staff cost $____

Estimate % staff savings
--Minimum expectation: 2%
--Average potential: 10%
--Estimated: ___%

Annual Savings $___

(Multiply annual staff cost by estimated savings)

___ overtime hrs./yr. @ $___/hr

Annual overtime cost $___

Estimate % reduction
--Minimum expectation: 2%
--Average potential: 20%
--Estimated: ___%

Annual Savings $___

(Multiply annual overtime cost by estimated reduction)

___ hrs. overstaffing/yr. @ $___/hr

Annual overstaffing cost $___

Estimate % reduction
--Minimum expectation: 10%
--Average potential: 50%
--Estimated: ___%

Annual Savings $___

(Multiply monthly overstaffing cost by estimated reduction)

Table 2. Calculation Of Savings From Automation Of Workforce Management Tasks

Staff Cost For Workforce Management

____total hrs./week administrative time @ $ /hr. x 52 weeks = $______
____total hrs./week management time @ $ /hr. x 52 weeks =  $______

Annual Staff Cost For Workforce Management $____

Estimate Of Staff Time Saved By Automation
--Minimum expected: 25%
--Potential improvement: 50%
--Estimate of time saved: ____%

Annual Savings $_____
(Multiply annual staff cost by % of estimated time saved)

Annual Staff Cost
____full-time staff @  $____ /yr.
____part-time staff @ $____ /yr.

                        Total $____ /yr.

Reduction In Workforce Shrinkage (or increase in productive time)
Current workforce shrinkage ____%
Potential workforce shrinkage ____%
(Minimum expected: 1%; Potential reduction: 5%)

Shrinkage Reduction ____%
(Subtract potential from current shrinkage)

Annual Shrinkage Improvement $_____
(Multiply shrinkage reduction by annual staff cost)

Current average hold time (delay) seconds ____
Anticipated delay seconds ____
Improvement per call seconds ____
(Subtract anticipated from current delay)

Number of calls per year calls ____

Total reduction in network usage minutes ____
(Multiply improvement per call by number of calls per year, then divide by 60)

Average toll-free cost/minute $____

Annual Savings $____
(Multiply reduction in network usage by average toll-free cost/minute)