Industry Commentary

BPO Sector Must Embrace Gig Economy Mentality

By October 24, 2017January 10th, 2022No Comments

One much talked about trend lately concerns the so-called gig economy.  And while the term itself may sound like the cliché of the month, it is an actual phenomenon that has the potential to disrupt the front-office BPO space.  As the workplace affords higher levels of individual autonomy, contact center outsourcers need to recognize that how they hire may well change in the coming years, and keeping up with the trend is critical to ensure access to talent.  In order to minimize potential disruptions to client delivery, providers need to look strategically at what the gig economy means to their operations.

The shift toward the gig economy was highlighted in a recent Globe and Mail article in which an economist notes this trend’s possible effect on government tax bases and social safety nets.  However, there are several factors that could easily impact the front-office BPO sector.  One particular challenge for contact center service providers will be responding to the growth in demand among young and old to work autonomously. According to a Price Waterhouse Coopers survey cited in the article, over 50% of workers across age brackets expect to be self-employed in the next five years.  In a sector where agents have been recruited on the basis of stability, training and benefits, a potential drop in qualified employees that favor self-employment could be catastrophic.  Firms in this space must consider what can be done to mitigate recruitment and retention disruption.

In order to minimize the loss of prospective and existing contact center agents as the gig economy gains steam, BPO players need to get serious if they are to adapt to this changing workforce reality.  If this trend continues, it has the potential to tighten the addressable contact center labor market over the long term.  The question is how best to apply this work model to an industry that has been so historically reliant on hourly wage employees.

One obvious opportunity is not necessarily a new one; for some time, certain vendors of home-based contact center services have designated their agents as contractors. This approach has allowed these providers to manage their virtual workforce with more flexibility.  Over time, some of these same outsourcers have moved to an employee model to exercise more control over agent scheduling. The growth in the gig economy suggests the need for a wider rethink of the contractor approach is already close at hand.

More broadly, by leveraging the gig economy model, outsourcers could potentially recruit agents temporarily for specific campaigns that may be of interest to them (whether due to loyalty to a particular enterprise or the desire to deliver a specific service).  This could also extend to finding contract workers to satisfy seasonal demand.  The upside of this approach is that it would offer a BPO player access to talented agents who perhaps otherwise would not consider work in a customer experience setting.  However, the incremental training costs for an agent who chooses to work for only a short amount of time could be quite high.

Bottom line: how people choose to work is changing rapidly, and contact center service providers must adapt to remain ahead of the curve. Any front-office BPO player that chooses to be a laggard will face agent-related cost hikes.  Developing the right strategy for the gig economy starts now.