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Chapter Six

Chapter Case Study Six: The Call Centre at Tengo Ltd.

Tengo Ltd. is manufacturer of notebook computers. computers. Since first entering the market in 2000 they have have enjoyed rapid growth due to the ongoing popularity of their low-cost laptops aimed at the student market and the development of a range of higher-spec higher-spec business notebooks. Their products self self in 30 countries across Europe and the Far East, although their main manufacturing operations, research and development and support functions (HR, finance, sales, marketing and IT) continue to be based in the UK where they employ over 500 members of staff. Given that Tengo trade exclusively over the Internet they do not have have retail outlets outlets nor do not sell their products through high street retailers retailers

The company s

customer contact centre provides a number of key functions: it is the customer point of contact for spares, accessories and extended product warranties; it provides technical support for existing customers; and, it is the channel for customer complaints; and, it fields enquiries about Tengo products. The contact centre was built three years ago on a greenfield site on the outskirts of a large town in the Midlands. There are a number of other customer contact centres situated nearby and, following a number of new employers locating to the region, competition for labour is intense, especially for those with prior call centre experience.

The workforce in the Contact Centre consists of a Customer Service Director, a HR advisor, a Call Centre Manager, 8 Team Supervisors and 95 Contact Centre advisors. Out of these 95 advisors, approximately 20 form the technical liaison team who deal with detailed technical questions and 10 members of staff working in the complaints department who also deal with some low-level technical enquiries. 25 advisors deal with the ordering of spares and accessories and the remainder field enquiries about Tengo products. Tengo s call centre is known locally to offer comparatively comparatively high pay, however a recent benchmarking benchmarking study of local competitors found that other terms and conditions of employment were less favourable. In particular, advisors were required to work longer shifts than employees in other nearby centres and received less holiday entitlement and fewer opportunities for training and devel opment.

Following a periodic HR planning exercise six months ago, the HR director (based in London) felt that Tengo s rapid growth over the previous three years years had lead to overstaffing at the call centre, particularly amongst the customer service department. As a result, a programme of rationalisation and restructuring was undertaken resulting in the loss of 30 jobs in the contact centre. As a result, 18 workers were made redundant, with another 12 12 posts lost through through natural wastage . Significant investment was also made in providing more effective and interactive online product support for customers, mainly to provide detailed technical advice. A customer satisfaction survey undertaken at the turn of the year rated satisfaction with after-sales customer service as poor and, subsequently, further investment was made into a new

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automated computer system which sought to standardise customer service, speed up response times and improve management s ability to monitor service quality. It was also hoped that this would reduce training and development costs for new empl oyees.

Following the restructuring, employee advisors were graded into three bands. Level 1 advisors, typically those dealing with customer complaints, were entry-level positions. The majority of advisors across most of the departments were Level 2. Advisors at Level 3 were mainly those dealing with detailed technical problems, commonly felt by the advisors to be the more interesting and desirable work, as well as having the best reward package. Among the technical support team, 16 of the 20 advisors had joined the company at a lower-level and had previously worked in at least one of the other areas of the contact centre. There was, however, greater churn of employees in all other sections, particularly the complaints department in which 25 per cent of new recruits left within the first two months. Whilst prior to restructuring there had been a degree of movement between the departments, with workers often trained to undertake a variety of roles, the customer service director had decided to more clearly delineate the responsibilities of each department in the hope that customer service would be improved by encouraging advisors to specialise in particular areas.

Prior to the organisational restructuring, employee turnover was found to reflect both the industry and regional average. The customer service manager considers a certain level of turnover to be acceptable and even beneficial to the firm. Since the restructuring, however, labour turnover has increased by 10 per cent and a number of long-serving advisors have left the centre. Employee absence has risen significantly. Management took the decision to seek to tackle the recruitment problems in the technical support and team leader roles by focusing outside of the organisation in order to reduce training and development costs.

Task

Recent customer service feedback highlights growing customer dissatisfaction with after-sales support and complaint handling and the customer service director is under significant pressure to address these problems. He has asked you - the HR advisor - to explore the people issues that might be contributing to poor service quality.

1. What do you think the main causes of poor customer service quality at Tengo?

Essentially, the poor customer service quality at Tengo can be attributed to problems of people and process. The new automated computer system which sought to standardise customer service, speed up response times and improve management s ability to monitor service quality appears not to have had the

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desired effect and customer dissatisfaction persists indicating that service quality appears not to be a function of workplace technology. The persistence of poor customer service is more likely to lie in the organisation of work and the impact of the restructuring, in particular the rigid demarcation between departments and the concentration of workers in specific areas of customer service. This has removed the valuable job rotation that would likely lead to improved job satisfaction and a commensurate benefit to service quality. High turnover in the complaints department, in particular, indicates a lack of intrinsic job satisfaction in such work. Moreover, the increasing level of labour turnover at the call centre is likely to have a negative impact on service quality as experienced employees are replaced with newly-trained workers. The restructuring and redundancies are likely also to have affected employee morale and might be considered to constitute a breach of the psychological contract with a subsequent impact on the demonstration of discretionary behaviour.

2. How can you explain high labour turnover in the call centre?

Students might consider two themes here. First, the nature of call centre work itself. Second, the management and work at Tengo. For the former, students might consider whether call centre work is inherently dissatisfying and whether the means of control (lack of discretion, call monitoring ) and management of performance are likely to be associated with poor employee retention. Reference can be made to the distinction referred to in Box 2.3 between two general types of call centre work and workflows: quantity-oriented call centres which are characterised by simple and routinised customer interaction, hard quantitative targets, strict script adherence, tight call-handling times, a high percentage of operator time spent on the phone, high call volumes and low level of operator discretion; qualityoriented call centres are characterised by more complex and individualised customer interaction, soft or qualitative targets, flexible or no scripts, relax ed call-handling times, prioritisation of customer satisfaction, low call volumes and high levels of operation discretion (Taloyr et al. 2002). Frenkel et al. (1999) suggest that the latter form of work is associated with greater job satisfaction. This classification can be applied to this case where complaint handling, for instance, is likely to adhere to the former, whilst technical help is likely to be associated with the latter. Moreover, the introduction of task specialization and demarcation between departments can also be discussed relative to low satisfaction, lack of variety and boredom as possible push factors. A further issue concerns terms and conditions of employment at Tengo and the apparently better T&Cs (other than pay) available at other nearby call centres. The restructuring and the impact on morale is also likely to be significant (as discussed above).

3. What information do you need to collect in orderly to understand and remedy turnover? How might this information be collected?

In order to properly understand labour turnover, management needs to address the following questions:

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·

Who is (and who isn t) leaving the organization?

·

Why are they leaving the organization (or staying)?

·

Where are the leavers going to work (if anywhere)?

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In short, management need to understand the dynamics of labour turnover and to identify patterns of turnover that might have a detrimental effect on performance. In order to do this the organization take reactive approach and seeks to identify prior or current patterns of turnover through exit interviews ad turnover data analysis (e.g. wastage analysis by department or type of work).

Alongside such an

approach, management might also be proactive in seeking to identify and address the internal drovers of turnover through employee attitude survey and suitable responses to head-off any potential problems.

4. Is turnover in the call centre likely to be universally dysfunctional?

 As explained in Chapter 6, most l abour turnover can be considered dy sfunctional for a v ariety of reasons (loss of skill/knowledge, lowered return on investment in HRD, symptomatic of wider employee relations problems

). However, even in this case where turnover is clearly affecting customer service quality,

some turnover is likely to be functional where it leads to the loss of poor performers or those unsuited to the work. This appears to be the case in the complaints department where new recruits are leaving after only a short time, although this turnover appears to indicate a failure in employee selection and/or training.

5. What changes would you make to HR practices and process within the call centre to address any identified problems?

Here the same HR solutions would seem to apply whether management was seeking to address labour turnover or poor service quality. Possible initiatives might include the (re-) introduction of some job rotation and associated cross-training, improved recruitment and selection processes (to ensure realistic  job preview), improved training and dev elopment and responding to the recent benchmarking exercise by improving terms and conditions of empl oyment relative to that of competitors.

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Online Case Study Six: Workforce Planning in practice at NHS London

In September 2008, NHS London published Workforce for London: A Strategic Framework , outlining the way in which the organisation was to address a number of key challenges facing healthcare in the capital over the coming decade. These include a rapidly growing population (predicted to equate to 600,000 additional users of health services over the next ten years) and highly-variable quality of healthcare provision, resulting in the highest rates of consumer dissatisfaction in England. These challenges along with a stated strategic objective to provide world-class healthcare for every Londoner have significant implications for the size, shape and distribution of London s healthcare workforce.

The current workforce

London s complex healthcare system has the highest number of constituent NHS organisations in the UK, and employs over 205,000 staff, 15.4% of the total NHS workforce. It has some of the world s leading medical centres of excellence which form a national and international hub for innovation in clinical care, research, and education. However, the report also outlines a number of key staffing issues faced by NHS London, including:

- In London hospitals, the ratio of clinical staff to occupied beds varies from 0.9 to over 2.0 - The lowest staffing levels are often in the areas with the greatest need

more GPs are in the south

and west of London than in the more deprived east and north

- London has more doctors (30.8 doctors per 10,000 population compared to an England average of 21.2) but fewer nurses (62.5 nurses per 10,000 population against an England average of 67.5) when compared with the rest of Engl and.

- As a result of historic recruitment patterns and more staff delaying retirement there are now a higher proportion of older staff in the workforce than ever before.

Healthcare has always attracted a large proportion of female workers, and there continue to be growing numbers of women in the medical workforce. It is anticipated that the working hours per week in the medical workforce will reduce over the next ten years reflecting a greater demand for flexible working arrangements by both men and women and the need for compliance with European Working Time Directive by 2009, which imposes a maximum of 48 working hours per week. Advances in technology will also have a significant impact on the shape of London s workforce through the creation of more centres with the technology and expertise to deliver highly specialised, complex care, and through the development of assisted technology enabling care to be delivered closer to home. This will require the redesign of working patterns, the development of new skills and expertise and the opportunity to create new roles. London plays an important role both nationally and internationally in training and developing future healthcare professionals but suffers from high labour turnover and loss of key staff to other parts of

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the country. For example, London trains 29% of UK medical undergraduates but over a third of these students do not work there after graduation. For nursing and midwifery, London s share of students (18.3%) is in proportion to the number of staff employed (17.7%). However, it is believed that London exports qualified and experienced staff to the rest of England, as demonstrated by consistently higher vacancy rates.

Workforce for London: A Strategic Framework

The purpose of the review which lead to the strategic framework was to assess the impact of anticipated changes in healthcare needs, demographic trends, technology and patient and public expectations on the future size, shape and composition of London s healthcare workforce and the changes required to how the organisation plans, trains, develops and deploys its employees. To assist in the workforce planning process, NHS London employed scenario modelling to provide insight into the strategic challenges ahead, and how these will affect the overall shape and size of London s workforce.

Labour Demand

Labour Supply

 Activity Productivity Changes in setting of care Changes in role

Retirement Career progression Other staff outflow Inflows from commissioned education Other inflows/recruitment

 Actions need ed to dri ve improvements in care and address mismatches in supply and demand Scenario modelling approach taken in

Workforce for London

The resulting strategic framework identified a number of both quantitative and qualitative changes in the NHS workforce needed to meet the challenges of the coming decade. In broad terms, the strategic framework acknowledged the central role played by the workforce in high quality service delivery but identified that staff were not fully utilised (productivity levels of staff in London were lower than elsewhere in England). The review suggested that London s NHS workforce will need to grow by between 4% and 23% over the next ten years dependent on the level of productivity delivered. The framework outlined three broad strands in how NHS London should respond to the demand and supply forecasting process. The first focuses on the quantitative dimensions of the required workforce needed to increase productivity, improve service quality and to address wider initiatives in the NHS regarding the delivery of

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care. The review indicated a need to develop new roles and new skills through increased targeted workforce development and investment, For example, the review advocates the development of broader sets of skills across the workforce. The review also suggests changes to where and how practitioners work, particularly through providing care closer to people s homes. The review also suggested enhancing employment opportunities for Londoners to reduce turnover, and to develop a workforce more representative of the community it serves.

The second element focuses on the systems required to support this new workforce. In particular, it stresses the importance of the effective integration of workforce planning, and educational investment, with service needs, particularly through the localisation (as far as possible) of workforce planning, tailored to meet the diverse needs of  patients.

Finally, the framework proposes a number of changes to leadership processes, with a particular focus on   

fostering a climate of worker engagement and empowering front-line staff to improve and develop the   

services they provide, creating new freedoms to innovate and provide the leadership for local change . In response to recent staff surveys, NHS staff indicated that a positive relationship with staff tends to relate to improved performance and the framework indicates a desire to engender teamworking and partnership across the organisation. The framework also indicates a need to develop excellent leaders at all levels of the organisation and to develop a pipeline of talent for Chief Executive and Director roles across the capital.

Questions

1. What are the pertinent factors which are shaping the supply and demand for medical practitioners in London over the coming decade? To what extent are these f actors reasonably predictable?

2. What responses to the workforce planning process are outlined in the case? 3. Why might the formal approach to workforce planning used by NHS London not necessarily be appropriate in many private sector organisations? 4. How can HR planning contribute to the achievement of organisational objective in all organisations?

Tutor s Notes 

The Workforce for London report provides an excellent example of public sector workforce planning and can be used to highlight why formal HR planning is important and appropriate in an organisation such as

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the NHS and also why it might be less appropriate in a more turbulent organisational context. This case summarises the key points from that report.

1. What are the pertinent factors which are shaping the supply and demand for medical practitioners in London over the coming decade? To what extent are these factors reasonably predictable?

Many of these are explicit in the case but it is perhaps a useful exercise for students to work through the case highlighting pertinent considerations for workforce planning. The table below highlights the key issues:

Factors shaping labour demand

Factors shaping labour supply

Demography and end-user profile (e,g. growing, ageing population

Loss of key skills and knowledge out of region

Developments in technology and treatment

Uneven distribution of practitioners across region

Changes in practitioner role

Worker shortages in some areas (e.g. nurses)

Changes in end-user requirements

Reduced maximum working hours

(Variable) healthcare quality

Retirement

Inefficient use of current staff

Recruitment activity (targ eted to areas of greatest need)

Changes to the location of service delivery (i.e. home care)

Inflows from commissioned education Career progression Existing vacancies

To some degree most of these factors are predictable to the extent that recent and longitudinal trends given management some indication of what the future might hold (e.g. demography, patterns of labour wastage

). However, the imperative for organisations to build some flexibility into the responses to the

planning process to allow for unforeseen developments should also be stressed (e.g. breakthrough treatments, new technology

).

2. What responses to the workforce planning process are outlined in the case?

The case highlights a point made in Chapter 6 that there are a wide variety of responses that organisations might adopted in response to the planning process and the issues that it identifies. Planned organisational responses to meet the objectives deriving from the planning process at NHS London include: ·

Development of new practitioner roles

·

Targeted development of required skills (broader skills to create more rounded, more flexible practitioners)

·

Increase workforce diversity and representativeness through targeted recruitment from local community

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·

Educational investment to support continued workforce development

·

Localisation of HR planning process to provide ensure appropriate labour supply to more tailored services designed to meet the diverse needs of patients

·

Improve worker engagement and engender greater employee empowerment to allow for the development of new competencies (e.g. innovation) and more efficient service delivery

·

Improve the working relationship (partnership) between management and employees

·

Improve the quality of leadership

3. Why might the formal approach to workforce planning used by NHS London not necessarily be appropriate in many private sector organisations?

This question refers to a discussion in Chapter 6 that outlines the conditions under which formal, longterm HR planning is most appropriate. Taylor (2008) suggests that HR planning i s likely to most beneficial in organizations with the foll owing characteristics: §

Large enough to be able to dedicate resources to the establishment and maintenance of an HRP function, such as public sector organisations

§

Operating in reasonable stable product and labour markets

§

Having key staff groups who require lengthy or expensive training

§

Competing in industries in which decisions concerning future investment in plant and equipment are made a number of years ahead and are essential to effective product market competition (i.e. capital-intensive industries).

Students might therefore discuss the types of organisations that this precludes and the types of unpredictable contextual factors that shape labour supply and demand that diminish its appropriateness. This leads into a discussion of the next, related question.

4. How can HR planning contribute to the achievement of organisational objective in all organisations?

Despite the above discussion regarding the limitations of HR planning, it is important that students recognise that some commentators argue that HR planning can be beneficial in all organisations as a means of developing organisational flexibility and adaptability and reducing the impact of uncertainty. For instance, Marchington and Wilkinson (2005) identify the following four reasons for the continued importance of HRP: 1. It encourages employers to develop clear and explicit links between their business and HR plans, and so integrate the two m ore effectively 2. It allows for better control over staffing costs and numbers employed

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3. It enables employers to make more informed judgements about the skills and attitude mix in the organisation, and prepare integrated HR strategies 4. It provides a profile of current staff, which is important to any organisation claiming to promote equal opportunities

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