Industry Commentary

CX Operators Need to Confront Imminent Labor Shortage

By August 11, 2021February 14th, 2024No Comments

The global outlook is certainly brighter in August 2021 than it was a year ago.  Across many countries, economic re-openings are bringing about a new sense of optimism.  However, as these efforts continue, a growing labor shortage is apparent.  And, while this impact is being felt across sectors, its potential to disrupt the CX space needs to be front of mind for operators.  The current challenge around worker availability cannot be ignored. Be it captive or third-party outsourcers, strategies need to be in place to ensure the best customer management possible during this crisis.

The story of labor shortages rings out across major demand markets.  In the US, a lack of skilled staff is impacting business confidence, according to a new study by the National Federation of Independent Business.  In Australia and New Zealand, unemployment is hitting decade lows, and employers from natural resources through to front-line hospitality are all feeling the stress of a lack of applicants.  In Canada, hotels in Québec have been forced to close hotel rooms due to worker shortages.

While there are multiple causes for this tight labor market, ongoing government pandemic support programs and border restrictions are both contributing to a lack of talent filling vacant roles. To that end, 26 US states have ended federally funded pandemic benefits in an effort to get more people back to work. Meanwhile, north of the border some major business groups in Canada are calling into question the logic of continuing these programs.

It is only a matter of time before this problem hits the CX industry. In fact, based on the recent analysis from David Stone, it appears that this issue is already impacting contact centers in Australia. The question then becomes, What can customer experience professionals do to guard against labor shortages?

An immediate and understandable reaction to a labor shortage would be to lift salaries and benefits.  However, there is little room to do so. In the Ryan Strategic Advisory 2021 Front-Office Omnibus Survey, enterprise CX decision-makers identify limited budgets as a top-3 operational challenge.  For BPOs, shrinking margins also hinder financial flexibility that would permit higher levels of remuneration.

Thus, while there is no one-size-fits-all formula, there are a few things that operators should consider.

The first involves the deployment of advanced technologies.  As Stone points out in his article, the reality in 2021 is that artificial intelligence has augmented the power of automation, and AI-based solutions can manage both digital and voice interactions better than ever before.  Outsourced and enterprise CX professionals need to audit their interaction pools thoroughly to see what activities currently managed by live agents can be deflected to automated solutions without an impact on quality.

Second, for operators of physical contact centers, there needs to be a major effort made to ensure that workplaces are safe from a health standpoint.  Existing and prospective agents will look for assurances that their workplace is compliant with mandated rules around social distancing and sanitization.  Any uncertainty will likely result in higher attrition, which means added costs for hiring in an already excessively tight labor market.

A final measure that CX operators should leverage as much as possible is work model choice.  It is clear from research that many agents favor the idea of alternating workdays between their homes and a physical site.  Accommodating this desire should be straightforward for many outsourced and captive customer management operations, and it will go far in driving agent loyalty.  A rigid approach that demands everyone return to the office five days a week will only curtail an outsourcer’s ability to attract (and retain) quality agents.

There is no cooker-cutter solution to any kind of a labor shortage. But clever deployment of technology and flexibility in meeting team members’ desire for work-from-home some days promises to go a long way toward remedying the problem with more productive and satisfied agents.