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Getting Compensation Right in Contact Centers
Contact Center compensation represents a big chunk of operating budgets. So great are the costs of staffing these new age repositories of customer interactions that off-shoring, a term formerly used to describe bank accounts of the rich and famous, has become the mantra of U.S. corporations looking to reduce labor costs.
Although salary costs are less across an ocean, contact centers that manage compensation in close alignment with business objectives will still be more profitable than ones that do not. With costs for contact centers on the rise as the industry matures, what goes around will come around, and the same compensation issues that keep U.S. management up at night will do so in India.
While moving operations to another continent may provide near term relief for rising salaries and benefits, let's take a look at some fundamentals of compensation within the context of sales and service delivery in a high volume, labor intensive environment.
If millions of dollars are spent on compensation and reward systems, how aligned are the expenditures with the overall objectives of business?
A leading computer maker asked us to help their outbound and inbound sales reps to better integrate product knowledge with selling skills. For each instance of successfully selling product leasing services vs. product purchase to small business customers, the company increased revenue by 30%. The client contact responsible for outbound sales recognized the opportunity cost of not providing the tools necessary to achieve the increased sales on a consistent basis.
After conducting extensive research interviews and observations with employees and management in the outsourced Contact Center , a new fact came to light. While employees were expected to use new relationship selling tools to increase revenue on each call, they were rewarded only on the basis of getting a customer off the phone in four minutes. To the outsider, the logic seems elementary. After 20+ years in the business, I know that employees pay attention to what management thinks is important.
To the computer maker, the obvious had been staring them in the face for years. The impact of what was happening had been lost on them and showed a resulting loss of market share and position. Within the next year, the company made a great expenditure in bringing contact centers in-house.
Another example of opportunity cost is the prevalence of contact center management to focus internal and external rewards. Sales staff is rewarded. Service staff are not. Customers placing an order press "1" and are rewarded with an immediate response. Customers needing service press "4" and hear that all representatives are busy now.
These types of thorny issues are faced by American bricks and click commerce and are bigger than one article. They require a lot more digging to get at the roots of the issues that drive performance management and compensation systems.
Linking pay with performance has been a compensation tool but it is often not well delivered. As in the case of the computer maker, what employees expect and deliver, and what management expects are all too often two different animals. Whether contact center reps are paid by individual incentive or on merit:
- Make the plan simple.
- Develop realistic objectives which can be not only measured, but have meaning to all involved (reps and management.)
- Clearly tell reps what is expected. In other words, what great performance looks like in relationship to each objective.
- Employees who take responsibility and commit to each objective achieve higher results through strong personal commitments to company success.
- Rather than "throwing the book" at employees, pick the key things that must be accomplished in any given quarter, season, year (you provide the measure.)
- Communicate about reward systems often, and consistently find ways to tie reps into the bigger picture of how aspects of their jobs tie to the bigger picture. Help each person understand and be able to calculate their impact to the bigger picture, and the impact of their performance on individual compensation and company performance.
Barbara Poole is the President of Poole Resources, Inc., a Fairfield County, CT based revenue improvement firm she began in 1992. She has developed a number of management tools and processes for corporations to build market share.
Barbara has been an Adjunct Instructor in the Hofstra-Cornell NYSSILR Labor Management Studies program, and has addressed such organizations as the American Society for Training & Development and the National Retail Federation. She is quoted in national business media and contributes articles on management to a number of trade publications. Barbara can be reached at firstname.lastname@example.org .
Poole Resources works with mid-market to Fortune 1000 firms to help tap an often-overlooked asset - what they already have inside of the business - to achieve top-line growth, without additional capital investment.