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The Canadian Contact Centre Industry:

Strategy, Work Organization & Human Resource Management

2nd Edition

The Global Call Centre Industry Project DANIELLE VAN JAARSVELD, DAVID WALKER & DENNIS MA

The Canadian Contact Centre Industry: Strategy, Work Organization & Human Resource Management

1

OVERVIEW

This report summarizes important data for Canadian contact centre managers and answers the following questions:

How have contact centre working conditions evolved since 2006?

What new technologies and innovative work practices have call centres adopted?

What strategies contribute to lower turnover, and better job quality?

What are contact centre employee and manager pay levels and what compensation strategies do contact centres use?

How do management practices differ across ownership structures and by the type of work centres perform?

This report has two sections and draws on

survey responses from contact centres located across Canada: (1) a 2011 industry snapshot based on 232 contact centre responses, and (2) a comparison of responses for 122 contact centres that participated in the 2006 edition of this report and participated again in 2011. The full 2011 survey covers organizations employing over 34,000 customer service representatives while the matched sample based on data collected in 2006 and 2011 represents organizations with 18,000 employees.

We analyze data on hiring practices,

technology use, and work design from contact centres that serve an array of industries including financial services, telecommunications, retail, information technology (IT), technical support services, hospitality, manufacturing, print and media, and both the public and non-profit sectors. We analyzed management and employment practices by organizational category

(e.g., union status, call direction, ownership type).

We present findings on contact centre management practices that are associated with better performance. Achieving competitive success in contact centres is a difficult task. Managers strive for higher quality customer service while controlling costs. Although technologies create efficient service interaction handling methods, customers are often frustrated by standardized menus and procedures, and in turn can take this frustration out on customer service representatives. Similarly, many employees find contact centre jobs to be routine, boring, and stressful, leading to high levels of employee dissatisfaction, burnout, absenteeism, and ultimately, voluntary turnover. Employee dissatisfaction can also reduce service quality and customer satisfaction.

At the same time, another dilemma exists for contact centre managers. Contact centre jobs are often portrayed as low-skilled or clerical in nature, yet require considerable knowledge and skill. Frontline employees confront on-going changes in product and service offerings, pricing, packaging, legal regulations, work methods, and technical processes. These employees need to regularly upgrade their knowledge and skills in order to serve customers well. Thus, a constant cycle of turnover, recruitment, training, and time spent moving employees up the learning curve is costly to employers.

Danielle van Jaarsveld, David Walker and Dennis Ma from the Sauder School of Business at the University of British Columbia (UBC) and University of British Columbia Okanagan (UBC-O) conducted this study.


2

The Survey Research Institute at Cornell University administered the survey instrument we used to collect the data. The executive director, Yasamin Miller, along with Darren Hearn, gave countless hours to ensure the accuracy of the data. Jane Mitenbergs also assisted us. To obtain copies of this report, please email the lead author: [email protected]. We thank the Social Sciences and Humanities Research Council of Canada (SSHRC), the Inter-University Research Centre on Globalization and Work (CRIMT), the University of British Columbia and the Sauder School of Business for their generous funding and support for this study.

This project benefited greatly from the support of provincial contact centre associations including the British Columbia Contact Centre Association, the Alberta Contact Centre Association, the Saskatchewan Contact Centre Association, the Manitoba Customer Contact Association, and Contact NB. In other provinces and cities, we benefited from generous expertise provided by economic development officials. Our gratitude also goes to the managers who generously gave their time to complete the survey and to all of our interviewees.

ISBN: 978-0-9784340-0-7 © Copyright van Jaarsveld, Walker, and Ma (2016)


3

EXECUTIVE SUMMARY

Our summary highlights important contact centre similarities and differences across key organizational characteristics. Union status (unionized/non-union), call type (inbound /outbound), and ownership structure (inhouse /outsourced) each impact contact centre employment systems, and in turn, employee outcomes. This executive summary outlines findings from the 2011 survey. We also highlight changes for sites that responded to both the 2006 and 2011 surveys. Market and Organizational Characteristics

The 232 contact centres in our sample are distributed across Canada and employ over 34,000 customer service representatives (CSRs). The majority of the sample is from Ontario (29.7 percent of sites, 43.8 percent of employees). The second largest component of the sample is from British Columbia (26.7 percent of sites, 15.6 percent of employees). The average contact centre in this study has 150 seats, but the typical size (that is, half are larger and half are smaller), is much smaller at 55 seats. The finance industry represents 26.5 percent of the sites in the sample. Government, telecommunications and public sector contact centres represent 14.2, 10.0, and 10.0 percent of the contact centres respectively. The majority of employees worked in two industries, 28.4 percent in telecommunications and 22.8 percent in finance. Inhouse contact centres, centres serving the customers of a parent organization, represent 71.6 percent of the sample while outsourced contact centres, those operated by subcontractors to serve customers of one or more companies, represent the remaining 28.4 percent of the contact centres. CSRs are unionized in 28.9 percent of the contact centres.

Workforce Characteristics On average, women constitute 71.3 percent

of the CSR sample, 8.9 percent of CSRs in our sample are recent immigrants, and 11.5 percent of CSRs are students. The average selection rate (percentage of applicants hired) for CSRs is 24.3 percent. Newly hired CSRs receive an average of five weeks of initial training, and managers report that it takes approximately 30 weeks for these new hires to perform competently. The average tenure of a CSR was 6.1 years. Operational Characteristics

A CSR in our study typically handles 90 customers per day, with a 5.6 minute average call duration. The majority of centres operate extended hours, open more than twelve hours per day, and open on the weekend, as opposed to a 24 hour per day/7 day per week schedule. Employees work as home-based CSRs in 19.0 percent of these contact centres. 43.0 percent of centres use voice over Internet Protocol (VoIP), an increase of 64.8 percent from 2006. Turnover and Absenteeism

Total turnover, including quits, dismissals, promotions within the business, and retirements, averaged 29.5 percent, an increase in comparison to total turnover in 2006 (24.8%). The average annual quit and dismissal rates are 15.7 percent and 7.5 percent, respectively. Both of these rates are marginally higher than they were in 2006 (14.2% and 6.2%). Outsourced centres experience the highest quit rates in our sample, and rates that are more than double their inhouse counterparts (26.8% versus 11.6%). By size, quit and dismissal rates were highest in centres with over 300 seats (25.1% and 8.8%). On average, 6.4 percent of CSRs are absent any day and take an average of 6.9 sick days annually.


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Unions, Turnover and Absenteeism The lowest quit (7.5%) and dismissal (3.5%)

rates belong to unionized centres. Non-union centres have 2.5 times (19.2% versus 7.5%) the average quit rates and 2.6 times (9.2% versus 3.5%) the average dismissal rate of unionized centres. Non-union centres tend to have less experienced CSRs than unionized centres, with more of the non-union workforce having less than one year of tenure (25.9% versus 11.2%) and fewer agents with more than five years of tenure (33.1% versus 52.1%). No significant differences in the percent of CSRs absent on a daily basis exist between non-union and unionized centres. Customer Service Representative and Managerial Compensation

In this study, annual pay includes base pay and variable pay (individual- and group-based incentive pay) but excludes overtime pay. We report all dollar values in Canadian dollars. On average, CSRs earn $36,409 (a 15.7% increase between 2006 and 2011) annually with CSRs employed in unionized centres earning 38.1 percent more than their non-union counterparts. The typical manager (excluding supervisors and team leaders) earns an average of $67,438 (a 14.3% increase between 2006 and 2011). Similar to the pattern with CSR compensation, unionized centres pay managers more generously on average compared to non-union centres. Managers of unionized centres earn 21.5 percent more than managers in non-union centres. CSRs receive individual-based incentives in 26.3 percent of centres and group-based incentives in 21.1 percent of centres. For managers, these percentages are 44.0 and 25.0 respectively.

Longitudinal Results: 2006 and 2011 Several substantial differences exist in the

122 contact centres that responded to both the 2006 and 2011 surveys. Three of these contact centres unionized between surveys. Of the centres in our sample that continued operating, they grew on average 17.2% between 2006 (123 seats) and 2011 (145 seats). The most notable operational changes were that the average number of daily customers decreased from 108 to 83, VoIP use increased from 21.7 percent of centres to 38.3 percent of centres, and the percent of centres offering service in Cantonese, Mandarin, and German doubled. Average CSR tenure increased over the period from 6.5 years to 6.7 years, absenteeism increased (5.1% versus 7.3% of CSRs each day) and across all three of our main organizational characteristics (union status, call direction, and ownership type) we found increases in both quit rates that ranged from 1.1% to 6.2%, and dismissal rates that ranged from 1.1% to 4.3%. Across union status, call direction, and ownership type, we found that the typical (half are larger and half are smaller) CSR salary increases ranged from $2,000 to $9,700, representing a percent increase ranging from 6.1% to 26.1%. Management salaries increased in all but unionized centres, with increases ranging from $2,000 to $8,500, representing a percent increase ranging from 4.0% to 16.5%. However, managers in unionized centres continued to out-earn their non-union managerial counterparts in both surveys. Managers in unionized contact centres earned an average salary of $75,000.


5

TABLE OF CONTENTS

OVERVIEW .............................................................................................................................................. 1

EXECUTIVE SUMMARY ....................................................................................................................... 3

TABLE OF CONTENTS ......................................................................................................................... 5

LIST OF FIGURES ................................................................................................................................. 6

LIST OF TABLES ................................................................................................................................... 7

I. INDUSTRY OVERVIEW ..................................................................................................................... 8

GEOGRAPHIC DISTRIBUTION .................................................................................................................. 9

INDUSTRY AND ORGANIZATIONAL CATEGORY ....................................................................................... 10

WORKFORCE CHARACTERISTICS ......................................................................................................... 12

II. OPERATIONAL CHARACTERISTICS .............................................................................................. 13

III. HUMAN RESOURCE MANAGEMENT SYSTEMS ......................................................................... 16

IV. CONTACT CENTRE OUTCOMES ................................................................................................. 24

WORKING CONDITIONS ........................................................................................................................ 25

EMPLOYEE OUTCOMES ....................................................................................................................... 28

IV. LONGITUDINAL RESULTS ........................................................................................................... 33

REFERENCES .................................................................................................................................... 43


6

LIST OF FIGURES

Figure 1: Employment in Business Support Services (NAICS 5614) from 2003 to 2013 ....................... 8

Figure 2: Distribution of Centres and the CSR Workforce by Province ................................................. 9

Figure 3: Distribution of Centres and Employees by Industry .............................................................. 10

Figure 4: Contact Centre Categories Used in this Report .................................................................... 11

Figure 5: Percentage of Centres and the CSR Workforce by Hours of Operation ............................... 14

Figure 6: Selection Rate by Category .................................................................................................. 16

Figure 7: Weeks to Become Proficient by Category ............................................................................ 18

Figure 8: Script Usage by Category ..................................................................................................... 26

Figure 9: Absenteeism by Category ..................................................................................................... 29

Figure 10: Absenteeism by Operating Schedule ................................................................................. 29

Figure 11: Absenteeism by Size ........................................................................................................... 30

Figure 12: Percentage of Unionized Centres by Category .................................................................. 32

Figure 13: Longitudinal Weeks to Become Proficient by Category ...................................................... 36

Figure 14: Longitudinal Script Usage by Category .............................................................................. 39

Figure 15: Longitudinal Absenteeism by Category .............................................................................. 40


7

LIST OF TABLES

Table 1: Workforce Characteristics by Category ................................................................................. 12

Table 2. Percentage of Centres Adopting Technological Tools ........................................................... 13

Table 3: Operating Hours by Category ................................................................................................ 14

Table 4: Number of Customers per Day by Category .......................................................................... 15

Table 5: Language Offerings by Category ........................................................................................... 17

Table 6: Days of Initial and Ongoing Training by Category ................................................................. 18

Table 7: CSR Pay Levels by Category ................................................................................................ 19

Table 8: CSR Pay Levels by Operating Schedule ............................................................................... 20

Table 9: CSR Pay Levels by Size ........................................................................................................ 21

Table 10: Managerial Pay Levels by Category .................................................................................... 21

Table 11: Managerial Pay Levels by Operating Schedule ................................................................... 22

Table 12: Managerial Pay Levels by Size ............................................................................................. 22

Table 13: Percentage of Centres Offering Benefits by Category ......................................................... 23

Table 14: Home Based CSR Use by Category .................................................................................... 27

Table 15: Tenure by Category ............................................................................................................. 28

Table 16: Types of Turnover by Category ........................................................................................... 30

Table 17: Types of Turnover by Operating Schedule .......................................................................... 31

Table 18: Types of Turnover by Size ................................................................................................... 31

Table 19: Union Effect on Working Conditions .................................................................................... 32

Table 20: Longitudinal Distribution of Centres and Employees by Category ....................................... 33

Table 21: Longitudinal Technology Adoption by Category .................................................................. 34

Table 22: Longitudinal Number of Customers per Day and Average Call Duration by Category ........ 35

Table 23: Longitudinal Language Offerings by Category ..................................................................... 35

Table 24: Longitudinal CSR Pay Levels by Category .......................................................................... 37

Table 25: Longitudinal Managerial Pay Levels by Category ................................................................ 37

Table 26: Longitudinal Percentage of Centres Offering Benefits by Category .................................... 38

Table 27: Longitudinal Centres using Home Based CSRs by Category .............................................. 39

Table 28: Longitudinal CSR Tenure by Category ................................................................................ 40

Table 29: Longitudinal Absenteeism by Operating Schedule and Size ............................................... 41

Table 30: Longitudinal Types of Turnover by Category ....................................................................... 41

Table 31: Longitudinal Types of Turnover by Operating Size .............................................................. 42

Table 32: Longitudinal Union Effect on Working Conditions ..................................................................42


8

I. INDUSTRY OVERVIEW

Contact centres across Canada reacted to macroeconomic pressures including a prolonged economic downturn, a less favourable U.S. exchange rate, the introduction of the Canadian National Do Not Call List (DNCL), and movement towards alternative forms of customer service (e.g., internet-based) since our data collection in 2005/2006 for our first report on the Canadian contact centre industry (van Jaarsveld, Frost & Walker, 2007). The industry, in 2011, has some similarities yet differs in important ways from that outlined in our first report.

Economic recession directly and indirectly

affected the Canadian contact centre industry. Though Canada’s economy slumped from 2008 to 2009, the U.S. economy experienced a far worse decline. Currency exchange rates became far less attractive for U.S. companies considering relocating contact centre work to Canada. In addition to curtailing the creation of new contact centres, outsourced contact centres located in Canada encountered greater challenges in obtaining and retaining service contracts.

Statistics Canada’s (2015a) data on the Business Support Services category (which includes Telephone Call Centres – NAICS 56142) illustrates the 10-year employment pattern shown in Figure 1 below. Although this category is not isolated to contact centres, it is a proxy for the economic conditions that contact centres experienced over this period. Between 2006 and 2011, overall industry employment in the Business Support Services category dropped 25 percent due to layoffs and closures.

On top of changes in economic conditions, the DNCL also had ramifications for the contact centre industry. The Canadian Radio-television and Telecommunications Commission (CRTC) administers the DNCL and enables Canadians to decide whether or not to receive telemarketing calls. In 2004, the CRTC announced the DNCL and it became operational in 2008. By 2011, 39 percent of Canadians had registered their residential land line on the DNCL, and awareness about the DNCL reached 84 percent among adult Canadians (“Do Not Call List,” 2011). Given these figures, it is likely that the DNCL had repercussions on outbound centres.

Figure 1: Employment in Business Support Services (NAICS 5614) from 2003 to 2013

(Source: Statistics Canada Table 281-0024)

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12

Workforce Characteristics

We asked survey respondents about the characteristics of their centre and workforce. “Core employees” are the largest group of employees who carry out the primary work activity for the centre’s customers (e.g., CSRs, sales representatives, or agents). In Table 1, we present the following workforce characteristics: (1) average age, (2) tenure, (3) gender composition, (4) student composition, and (5) recent immigrant composition, by organizational category. Average tenure was just over 6 years but 21.6 percent of employees in these centres had less than 1 year of tenure. Often, contact centres are seen as a source of transitional or short-term employment, typically staffed by younger agents who exhibit high levels of job mobility. The characteristics we identified suggest that CSRs hold these jobs longer (average tenure: 6.1 years) and that CSRs are older (average age: 33.3 years) than general perceptions of this occupation indicate, as shown in Table 1.

Our study, consistent with previous studies

(Buchanan & Koch-Schulte, 2000; Human Resources Development Canada, 2002; Belt, 2002), confirms that the CSR workforce is predominantly female (71.3% on average). The gender composition of the CSR workforce,

however, varies by contact centre service type. This gender distribution is more balanced in IT help desk centres where a larger proportion of the workforce is male, while women represent a larger share of the workforce in all other centres. Interestingly, unionized centres that offer higher pay and more job security through seniority provisions employ a higher proportion of women compared to non-union centres.

We also consider other workforce characteristics such as student and recent immigrant status. In our study, the majority of contact centres (72.7%) use students. However, among all centres, they represent, on average, 11.5 percent of each centres’ CSR workforce. Contact centres offer work experience and a flexible schedule which can be attractive to students. Outbound and outsourced centres employ a greater proportion of students compared to their respective inbound and inhouse counterparts. We also asked centres to report their reliance on employees who are recent immigrants to Canada, defined as living in Canada for less than ten years. The majority of centres we surveyed, 66.4 percent, employed relatively recent immigrants to Canada. Recent immigrants make up on average 8.9 percent of the overall CSR workforce.

Table 1: Workforce Characteristics by Category

Union StatusNon-Union 32.1 5.0 69.7 12.5 10.0Unionized 36.5 8.8 75.2 9.1 6.3

Call DirectionInbound 33.3 6.4 71.5 10.5 9.1Outbound 33.5 4.6 70.4 16.2 7.8

Ownership TypeInhouse 33.9 6.6 72.8 9.2 7.7Outsourced 32.0 5.0 67.6 17.4 12.0

Overall 33.3 6.1 71.3 11.5 8.9

% Recent Immigrants

CategoryAverage

AgeAverage Tenure

%Female

% Students


13

II. OPERATIONAL CHARACTERISTICS

Technology Adoption Canadian contact centres are embracing

developments in contact centre technologies. Technological advances provide the opportunity to move customer interactions from voice-only channels (e.g., telephone) to multiple channels (e.g., email, fax, and web-based). They complement CSR skills by enabling employees to serve customers through various mediums. We selected five such technologies and highlight their use and adoption across organizational categories, in Table 2 below.

Voice over Internet Protocol (VoIP) Traditional contact centres handle calls with

circuit switching and time division multiplexing technology requiring physical circuits to make connections. With increasingly widespread use of fibre optic cables, voice traffic now travels at a minimal cost on the data network using the internet protocol infrastructure. Rather than incurring costs based on long distance usage, voice over internet protocol (VoIP) lowers long distance expenditures. For contact centres conducting business across borders (or even

Table 2: Percentage of Centres Adopting Technological Tools

Contact centres have expanded the choice of

channels that customers can use to contact them and over half of the centres participating in our study have adopted web-enablement tools (e.g., web chat and joint browsing) to facilitate Internet-based customer and employee interactions. As contact centres adopt multiple channels of contact and communication, the demand for broader employee skills and technical proficiencies increases, as does the importance of additional frontline CSR training. We find some variation by organizational category with respect to technology adoption, as Table 2 illustrates above.

outside local domestic calling areas), this represents a significant savings. VoIP systems, however, do require a considerable initial capital investment.

Adoption of VoiP is fairly widespread: 43.0 percent of centres in our study adopted VoIP, with greater use in larger centres. We find some industry variation in VoIP adoption. Contact centres in the hospitality, manufacturing, and telecommunications industries report the highest penetration of VoIP while government and public sector centres report the lowest adoption of VoIP relative to contact centres in other industries in our study.

CategoryWeb

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Interactive Voice

ResponseCRM

Speech Recognition

Union StatusNon-Union 52.5 45.7 48.1 25.9 6.8Unionized 48.5 36.4 65.2 30.3 19.7

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Ownership TypeInhouse 50.0 42.1 54.9 28.0 12.2Outsourced 54.7 45.3 48.4 25.0 6.3

Overall 51.3 43.0 53.1 27.2 10.5

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15

Number of Customers per Day To better understand variation in operational

pressures present in contact centres, we asked questions about each contact centre’s call statistics, including the number of customers handled per day, and call duration. On an average day1, employees in our study handle 90 customers with an average call handling time of 5.6 minutes. Considerable variation in the number of calls handled per day exists by organizational category, as Table 4 illustrates.

Table 4: Number of Customers per Day by Category

We interpret the statistics in Table 4 to suggest that unionized CSRs handle more calls on average than non-union CSRs. Outsourced centres appear to handle higher call volumes than inhouse centres, and outbound centres handle more calls than inbound CSRs. The data reveal the existence of a few centres handling very high call volumes, and therefore these centres increase the overall average number of customers per day. We do not find great differences in median call volume considering union status and ownership type. However, the difference between the average and median call volumes for outbound centres (107 customers per day compared to 100, on average) is significantly closer than that of inbound centres (86 customers per day compared to 60, on average). Considering ownership category, we find notable differences in customer contact with 1 Raw, not standardized or scaled to an eight hour shift.

outsourced centres handling a significantly higher volume than inhouse contact centres (111 customers per day compared to 82, on average). Feedback on Customer Service

In our sample, 92.5 percent of managers reported that their customers were satisfied with service quality. Collecting customer feedback and dealing with customer complaints are necessary activities for improving customer service. The majority of centres surveyed (63.4%) have a formal mechanism for collecting customer feedback. In 56.2 percent of those centres, customer feedback is shared with frontline service employees at least once a month, and in 13.7 percent of centres, it is delivered on a daily basis.

In some centres, feedback is used for

developmental purposes to coach CSRs on improving their call handling skills. Feedback from customers is incorporated into performance management processes and can influence whether or not CSRs receive a raise. In addition to formal mechanisms for collecting customer feedback on service performance, supervisors also listen in on calls periodically to ensure that CSRs are adhering to scripts, and delivering high quality service. However, the challenge with these forms of performance monitoring, in addition to the widespread electronic monitoring that is a reality for the CSR workforce, is that it can increase CSR stress levels (Deery, Iverson & Walsh, 2010) which in turn can lead to greater absenteeism and turnover. In Germany, for example, unions representing the CSR workforce have negotiated limits on how often supervisors can listen in on calls or whether they can do so without the employee being aware (Doellgast, 2010). In Canada, Omega used sales per hour statistics to evaluate employee performance and sent employees home if they missed their targets (Stevens, 2014). As Stevens (2014) and Batt (1999) note, performance management becomes problematic when it shifts from being developmental to being disciplinary in purpose.

Category Average Median

Union StatusNon-Union 88 70Unionized 96 60

Call DirectionInbound 86 60Outbound 107 100

Ownership TypeInhouse 82 65Outsourced 111 75

Overall 90 65

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17

During selection, managers also search for candidates who can serve customers in multiple languages. Multilingual agents are actively recruited by 55.6 percent of the contact centres that participated in our study. Access to multilingual agents is a key strength of the Canadian market. Language Offerings

The linguistic capacity of Canadian contact centres extends well beyond English and French, with contact centres offering service in languages including Cantonese, Mandarin, German, and Spanish. We highlight the various language offerings by organizational category in Table 5. On average, 97.8 percent of contact centres surveyed offered service in English. Meanwhile 63.8 percent of contact centres in our sample offered service in French.

We find evidence of differences in the use of part-time and temporary employment forms across organizational categories. Similar proportions of inhouse and outsourced centres report hiring part-timers (78.2% and 79.7%, respectively), and in these centres, part-timers represent roughly a third of the core workforce in both inhouse (30.0%) and outsourced centres (37.8%). Part-time CSR use follows a similar pattern by union status: with 78.3 percent of non-union and 79.4 percent of unionized centres using part-timers. Part-timers represent on average 30.1 percent of CSRs in non-union centres and 36.9 percent of CSRs in unionized centres. Considering call direction, 87.8 percent of outbound centres and 76.6 percent of inbound centres use part-timers. Of these centres, part-timers are used more extensively in outbound than in inbound centres (58.3% and 25.6%).

Table 5: Language Offerings by Category

Employment Contracts

In many contact centres, employers hire CSRs on part-time and temporary contracts to respond to the large fluctuations in call volumes that can occur on a daily, weekly, or seasonal basis. Variation in these staffing configurations is large. For example, a minority of centres in our study (17.9%) rely solely on a full-time workforce, while 78.3 percent of contact centres hire employees on a part-time basis. Of the centres that hire part-time staff, they comprise an average of 32.2 percent of the core workforce (excluding temporary CSRs).

More outbound centres also rely on temporary contracts compared to inbound centres (34.1% and 24.3%, respectively). Among those centres that include temporary contracts in their staffing strategy, this employment form represents, on average, 27.5 percent of the workforce in outbound centres and 17.5 percent in inbound centres. Union presence also influences temporary contract use, with unionized centres using more temporary contracts than non-union centres. One potential explanation for this difference is that unionized centres use temporary contract employees to

Category French Cantonese Mandarin German Spanish Other

Union StatusNon-Union 67.3 12.1 10.3 4.2 17.6 9.1Unionized 55.2 15.2 15.2 11.9 14.9 10.6

Call DirectionInbound 61.3 11.1 11.1 6.8 14.7 9.5Outbound 75.6 22.0 14.6 4.9 26.8 9.8

Ownership TypeInhouse 61.4 14.5 13.9 6.6 17.5 10.3Outsourced 69.7 9.1 6.1 6.1 15.2 7.6

Overall 63.8 13.0 11.7 6.5 16.8 9.5

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18

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19

Compensation Strategies for the CSR Workforce

Compensation is a powerful tool for recruiting and retaining CSRs. To measure pay levels, we asked managers to report the annual pay for the “typical” CSR. Annual pay includes salary and all pay for performance, such as individual commissions, group bonuses, and profit sharing, but excludes overtime pay. On average, the typical CSR earned $36,409 in 2011. Comparisons on mean and median salary levels, as well as individual and group incentive adoption and pay percentages, by organizational category are highlighted in Table 7.

Tables 7 to 12 refer to the percent of centres using incentive pay which we label “Incentive Adoption (%)” and the percent of pay that is performance based among centres with incentive adoption, which we label “Performance Pay (%)”. For example, of the non-union centres that offer individual performance pay, on average CSRs earn 10.5 percent of their pay in individual performance pay – seemingly similar to their unionized counterparts; however, it is important to note that more non-union centres offer individual performance pay (32.1%) than unionized centres (11.9%).

Table 7: CSR Pay Levels by Category

Pay levels varied considerably among

organizational categories. On average, salary levels in inhouse, inbound, and unionized contact centres are significantly higher than in outsourced, outbound, and non-union centres.

Variable pay is an instrument for

compensating employees, while at the same time motivating higher levels of job performance. We asked respondents about two forms of variable pay: (1) “individual-based incentive pay” (e.g., commission), and (2) “group-based incentive pay” (e.g., profit sharing and gainsharing). In our sample, 26.3 percent of centres offer individual-based incentives to CSRs and 21.1 percent offer group-based incentives. 9.5 percent of centres offer both incentives.

Use of individual performance pay incentives

tends to be greater in lower paid positions, while adoption of group performance pay incentives is greater in higher paid positions. In a similar vein, some contact centres also adopt group-based performance incentives, although the percentage of performance pay that is based on individual performance is greater than group based pay. Some centres, based on organizational category, have higher adoption rates of one type of performance based incentive. For example, a much larger proportion of outbound centres use individual performance pay (39.0%) than inbound centres (23.6%), but a larger proportion of inbound centres (22.0%) use group performance pay when compared to outbound centres (17.1%). Ownership type also reveals a similar

Average Median Individual Group Individual Group

Union StatusNon-Union $32,735 $32,000 32.1 21.8 10.5 6.4Unionized $45,192 $47,000 11.9 19.4 10.6 3.7

Call DirectionInbound $38,162 $38,000 23.6 22.0 9.0 5.4Outbound $28,154 $28,750 39.0 17.1 14.7 7.6

Ownership TypeInhouse $38,776 $40,000 25.9 25.9 11.7 5.7Outsourced $30,070 $28,000 27.3 9.1 7.6 6.0

Overall $36,409 $35,000 26.3 21.1 10.5 5.7

Performance Pay (%)Category

Salary Incentive Adoption (%)


20

pattern, with outsourced centres exhibiting slightly higher adoption rates of individual performance pay (27.3%), but with more inhouse centres using group performance pay (25.9%). It is crucial to exercise care when interpreting Table 7: although more outsourced centres use individual performance pay, of the centres that actually do use individual performance pay, inhouse centres on average use pay schemes where individual performance pay constitutes a higher proportion of CSR pay than their outsourced counterparts (11.7% versus 7.6%).

Evidence from studies like ours indicates that compensation packages vary substantially depending on the organizational characteristics of centres. Contact centres differ in their compensation strategies depending on whether they are inhouse or outsourced (van Jaarsveld & Yanadori, 2011). We see this pattern in our results with outsourced firms paying less than their inhouse counterparts, which is consistent with a cost leadership business strategy. Companies choose to outsource lower value work, and thus, the skill level required to perform work in outsourced contact centres is lower than in inhouse centres (Batt, Nohara & Kwon, 2010). This pattern is also found across countries but the magnitude of the difference in pay between inhouse and outsourced centres is smaller in coordinated economies (e.g., France, Denmark, Sweden, Germany) compared with liberal market economies (e.g., U.S., Canada, U.K.) (Batt, Nohara & Kwon, 2010). In coordinated economies such as Sweden and Denmark, union density is significantly higher than in liberal market economies and so there is more pressure

on outsourced firms to reduce wage differentials with inhouse firms.

We also show in our results that unionized

firms outpay non-union firms. In a study comparing unionized and non-union contact centres involving 1819 observations from 15 countries, Batt, Nohara and Kwon (2010) found a similar pattern with unionized firms paying more than non-union firms. The wage differential between unionized and non-union centres was larger in liberal market economies than in coordinated economies. These differences were attributed to the degree of union density and the institutional framework present in each country for reinforcing union and employee protections.

From the perspective of employee voluntary

turnover, in a study of contact centre employees in Australia, Russell (2009) found that dissatisfaction with wages ranked third behind the monotony of the work, and lack of promotional opportunities as reasons for leaving contact centre jobs. Evidence from studies like ours indicate that there can be a fair amount of variation in compensation packages depending on the organizational characteristics of centres. Consistent with our findings, Canadian Tire added over 200 contact centre jobs in 2014. These jobs in an inhouse contact centre were described as being good quality because they include a flexible benefits plan, profit sharing, stock purchase plans, and an average hourly wage of $20 plus bonuses (Fraser, 2014).

We present pay level statistics by operating schedule (Table 8) and centre size (Table 9).

Table 8: CSR Pay Levels by Operating Schedule


Hours of OperationBusiness Hours $41,687 $41,000 23.2 15.9 8.5 5.8Extended Hours $33,478 $35,000 33.0 27.0 12.5 5.824/7 $35,426 $32,000 19.0 17.5 7.5 5.3

Overall $36,409 $35,000 26.3 21.1 10.5 5.7

CategoryPerformance Pay (%)Salary Incentive Adoption (%)


21

CSR pay levels tend to be higher in contact centres operating within regular business hours (Table 8, Column 1). This pattern, however, is the result of other related characteristics. For example, centres operating during regular business hours are more likely to be unionized, inhouse, and inbound. Contact centres operating during extended hours make the largest use of performance pay – both in terms of incentive adoption and the proportion of gross pay derived from performance.

Compensation Strategies for Managers Turning to managerial pay, we asked

respondents to report average pay levels for managers (excluding supervisors and team leaders). We found that they earned an average of $67,438 in 2011 (Table 10, Column 1). Pay levels also varied considerably by organizational category. The average salary for managers ranged from a high of $77,024 in unionized centres to a low of $54,579 in outsourced centres (Table 10, Column 1).

Table 9: CSR Pay Levels by Size

Although pay levels are generally similar

across different-sized centres, it is noteworthy that the largest centres (those with more than 300 seats) appear to have the highest adoption rates of incentive based pay: 48.3% use individual-based performance pay and 41.4% use group-based performance pay (Table 9, Columns 3 and 4) compared to smaller sized centres.

Overall, managers employed in unionized,

inbound and inhouse contact centres earn significantly more than their counterparts in outbound and outsourced contact centres. Although managers are excluded from bargaining units, they still reap the salary benefit of union presence. On average, they earn 21.5 percent more than their counterparts in non-union contact centres.

Table 10: Managerial Pay Levels by Category


Number of Seats1 to 25 $37,159 $38,000 24.7 23.4 8.5 3.726 to 50 $37,557 $36,000 16.7 7.1 9.9 3.751 to 100 $35,025 $34,000 34.2 15.8 9.7 7.2101 to 300 $34,733 $35,000 17.4 21.7 16.8 7.3More than 300 $37,288 $35,000 48.3 41.4 10.6 7.1

Overall $36,409 $35,000 26.3 21.1 10.5 5.7



Union StatusNon-Union $63,377 $60,000 46.7 27.9 13.1 9.0Unionized $77,024 $75,000 37.3 17.9 16.0 6.0

Call DirectionInbound $68,808 $65,000 42.9 24.6 11.9 6.0Outbound $60,783 $56,400 48.8 26.8 21.5 18.5

Ownership TypeInhouse $72,271 $70,000 45.8 27.7 13.6 6.8Outsourced $54,579 $51,000 39.4 18.2 14.2 14.4

Overall $67,438 $65,000 44.0 25.0 13.8 8.3



22

We find a similar pattern among managers as we do for CSRs with respect to salary. Managers receive a higher percentage of their pay in individual rather than group incentives. Of the centres that adopt incentive pay, managers receive 13.8 percent of their compensation in individual incentives and 8.3 percent in the form of group incentives (Table 10, Columns 5 and 6). Managers in unionized contact centres are paid more, but variable pay is less common than in non-unionized centres. Comparing Tables 7 and 10, managers have higher levels of performance pay incentives than CSRs both in terms of adoption and as a percentage of their pay.

We highlight managerial pay levels by operating schedule (Table 11) and contact centre size (Table 12). The patterns are similar to CSR pay statistics reported in Tables 8 and 9: managers in centres operating during regular business hours tend to have higher salaries, and salaries are similar regardless of centre size. Similar to CSR incentive adoption, managerial individual and group incentive adoption are highest in centres with extended hours (49.0% and 31.0%, respectively). This pattern can be explained by the fact that the majority of outbound centres surveyed (68.3%) operate on an extended hourly schedule.

Table 11: Managerial Pay Levels by Operating Schedule

van Jaarsveld and Yanadori (2011) analyzed data from the 2006 Canadian contact centre study and found that outsourced centres also pay their managers less than their inhouse counterparts. It is noteworthy that this differential is consistent across both CSRs and managers. When van Jaarsveld and Yanadori (2011) included workforce characteristics and management practices in their analysis, these factors account for some of the differences.

Incentive adoption is highest in the largest centres, and generally increases with the size of centres (with the exception of the smallest centres, which exhibit higher incentive adoption levels than centres with 26 to 50 seats). Other factors account for the patterns we show in Table 12 below. For example, sales-related positions are largely unrepresented in the 26 to 50 seat category. Centres with more than 300 seats have the highest group incentive adoption (58.6%).

Table 12: Managerial Pay Levels by Size


Hours of OperationBusiness Hours $73,825 $72,500 37.7 18.8 16.6 7.7Extended Hours $66,201 $62,000 49.0 31.0 12.3 9.724/7 $63,056 $60,000 42.9 22.2 13.7 5.9

Overall $67,438 $65,000 44.0 25.0 13.8 8.3



Number of Seats1 to 25 $65,489 $65,000 41.6 23.4 11.5 4.826 to 50 $69,722 $65,000 26.2 7.1 17.5 7.351 to 100 $67,075 $67,500 47.4 26.3 15.9 17.0101 to 300 $68,650 $65,000 50.0 21.7 15.5 6.4More than 300 $68,078 $65,000 62.1 58.6 11.3 8.4

Overall $67,438 $65,000 44.0 25.0 13.8 8.3

Performance Pay (%)Salary Incentive Adoption (%)Category


23

Benefits We asked respondents about the type of

benefits offered to CSRs because these jobs are described by some as low pay “ghettos” (Belt, 2002). Specifically, we asked managers about the type of benefits they provide (Table 13). The compensation CSRs receive typically consists of six benefit types in addition to pay. In our study, 87.5 percent of centres offer dental benefits, and 69.6 percent offer supplemental health coverage (Table 13, Columns 2 and 6). Other common benefit offerings include paid sick days (78.9%), and vacation days (93.1%) (Table 13, Columns 3 and 4).

Considerable variation in benefits exists

across contact centre categories. Consistent with the pattern we found in salary, unionized, inbound and inhouse centres have, on average, higher implementation of all six selected benefit offerings than their category counterparts (with the sole exception of inhouse day care). The greatest difference in benefits offerings can be observed within the call direction category. Outbound centres consistently reported the lowest level of benefit adoption across categories. This finding, in combination with earlier compensation results from Table 7 reporting the lowest average pay in outbound centres as well as the highest proportion of individual incentives both in terms of practice

adoption and percent of individual pay provide evidence of the type of centre associated with the stereotype noted earlier.

It is also interesting to note, that while

outbound centres not only have the lowest level of benefit adoption across categories, they are also the most different when compared to the other type of centre in their category. For example, when unionized and non-union centres are compared on the use of dental benefits, 15.5 percent more unionized centres offer these benefits. The difference in dental benefits offerings between inbound and outbound centres is 32.2 percent. Thus, outbound centres not only have the lowest level of benefit adoption, but their less generous benefit offerings are also more of an outlier.

The contact centre workforce is

disproportionately female yet very few centres offer day care as a benefit (only 5.7%, by far the lowest benefit offering). Further analysis using our data (not presented in this report) suggests that centres characterized by a cost leadership strategy (e.g., lower hiring costs, lower CSR pay levels, employing students) are associated with lower benefits offerings in general. Overall, these results are consistent with expectations of centres that compete broadly on the basis of cost.

Table 13: Percentage of Centres Offering Benefits by Category

Union StatusNon-Union 4.9 83.0 71.5 90.3 67.3 63.2Unionized 7.6 98.5 97.0 100.0 83.6 85.1

Call DirectionInbound 6.3 93.2 84.8 97.4 76.4 76.2Outbound 2.4 61.0 51.2 73.2 51.2 39.0

Ownership TypeInhouse 5.5 91.0 87.3 95.8 74.7 75.2Outsourced 6.2 78.8 57.6 86.4 65.2 55.4

Overall 5.7 87.5 78.9 93.1 72.0 69.6

Personal or Family Days

Supplemental Health Care

Category Day Care DentalPaid Sick

DaysPaid Holidays or Vacations


24

IV. CONTACT CENTRE OUTCOMES

We find evidence of considerable variation in the organization of work and in contact centre outcomes (e.g., turnover) across the contact centres participating in our study. Work organization is a controversial dimension of employment conditions in contact centres. Contact centre technologies facilitate high levels of standardization and scripted interactions, which can increase call handling efficiency. Employees frequently complain, however, of boredom, stress, and burnout from the routine and repetitive work. Research on contact centre work demonstrates that low job discretion and substantial performance monitoring are associated with increased anxiety, depression, emotional exhaustion, and job dissatisfaction among employees. In this study, we examine three aspects of work organization – performance monitoring, job discretion, and team work – that research has shown affect workforce stability (e.g., tenure and turnover).

Workforce stability is an ongoing challenge for contact centre managers, who perpetually search for additional workers to hire. Research shows that high turnover rates lead to increased recruitment, screening, and training expenditures. When costs are multiplied by large numbers of employees who leave each month, turnover costs are a major problem for contact centres. Turnover costs also take a toll on managers, who spend the majority of their time dealing with workforce churn, rather than on creating proactive strategies to improve service quality, productivity, and employee engagement.

Turnover costs also need to be considered in the context of overall operating costs. Labour constitutes a high proportion of contact centre operating costs, such that reducing turnover costs can have a meaningful impact on contact centre financial performance. In this section, we also examine the relationship between human resource practices and workforce stability to offer insights about reducing turnover.

Much research on contact centre human resource practices focuses on employee outcomes (e.g., pay, job satisfaction, turnover). Many studies show that contact centres that adopt a cost leadership strategy employ a CSR workforce that exhibits higher levels of stress. These high stress levels can in turn translate into burnout and ultimately voluntary turnover. Batt and Colvin (2011) show that contact centres that invest in HR practices will reduce total turnover levels (voluntary and involuntary turnover).

Researchers who study CSRs report that customers contribute to escalating CSR stress, while others show that CSR job design can contribute to CSR emotional exhaustion, absenteeism, and voluntary turnover. In these workplaces, employees often feel that “the customer is king,” and subsequently customers hold a lot of power in these service interactions. Employees can perceive that customers mistreat them, and as a consequence, they can retaliate towards customers to even the score. These reactions are problematic because they can undermine service quality.


25

Working Conditions

We measured the use of (1) formal performance appraisal processes, and (2) electronic monitoring of call quality and call metrics to assess contact centre management focus on employee performance.

Performance monitoring is widespread in contact centres. Supervisors can listen in on employees’ calls and provide performance feedback on a daily, weekly, monthly, or ongoing basis. Performance monitoring provides a mechanism for quality control and employee skill development. However, frequent performance monitoring and feedback can signal to employees that management does not trust them to do their job well. Employees often complain that the lack of privacy and constant exposure to management observation can also increase stress. Electronic Monitoring

Electronic monitoring of employees is a common feature in contact centres. We asked managers to report how much of an agent’s workday is monitored electronically. Among the 85.2 percent of centres in our sample that use electronic monitoring, managers reported that 80.0 percent of an agent’s workday, on average, was monitored.

An indicator of the monitoring intensity in a

workplace is how frequently managers share performance data with employees. In this study, we examined the number of calls taken per day, call length, and number of sales. In 44.0 percent of centres, supervisors listen to calls at least weekly, if not daily. Variation exists in how often managers share performance information with the CSR workforce. Supervisors deliver performance feedback either daily or on a continuous basis in 10.3 percent of centres, and 38.4 percent of contact centres surveyed share this information at least once a week.

How contact centre management uses performance information, whether for developmental or disciplinary purposes, influences how agents view electronic monitoring. Outsourced contact centres are more likely to use performance information for disciplinary purposes (78.6%) compared with inhouse contact centres (70.9%). A difference in performance information use also exists between non-union and unionized centres with 75.0 percent of non-union centres using performance information for discipline purposes compared to 69.7 percent of unionized centres. A similar difference also exists when considering call direction: 74.7 percent of inbound centres use performance information for disciplinary purposes, compared to 68.2 percent of outbound contact centres. Job Discretion

One indicator of discretion at work is the extent to which customer service representatives are required to use scripted texts when serving a customer. The decision to use scripts in contact centre operations is based on several consider-ations, including how easy it is to standardize certain call types and the ability to rely on other forms of performance management. In our survey, 30.3 percent of contact centres make substantial use of scripted texts (see Figure 8, page 26).

Less employee reliance on scripts does not

necessarily translate into high levels of employee discretion. In addition to script use, we asked managers about two other indicators of job discretion: task discretion and interaction discretion. “Task discretion” refers to the level of discretion that CSRs have over work methods and work pace. “Interaction discretion” refers to the extent of discretion CSRs have over their daily interactions with customers.

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27

Home Based CSRs Using home based CSRs is an innovative

approach for organizing work that is attractive to contact centre employers. First, home based CSRs appear to be less likely to quit. Second, home based CSRs often have more education. Companies using home based CSRs report that they recruit from a better educated and more experienced applicant pool. Third, the use of home based CSRs drastically reduces the need for and cost of physical facilities.

We examine the expanding use in home

based CSRs in two ways (Table 14). First, “Centre Adoption” represents the percentage (%) and number (#) of centres within each category that use home based CSRs. Second, “CSR Adoption” characterizes the percentage (%) and number (#) of CSRs that are employed by centres that use home based CSRs. Using the percentage (%) and number (#) statistics together is useful in interpreting the results of Table 14, as relying on a single statistic can be misleading.

For example, in the five outbound contact

centres using home based CSRs, 37.0 percent of the workforce is home based. While this proportion of employees seems large, it represents only 61 employees, a small number of employees when compared to the 4787 CSRs working exclusively onsite in outbound contact centres.

Note also that information pertaining to

additional characteristics such as size of centres using home based CSRs is not presented in Table 14. For example, the outbound contact centres in our study that make extensive use of home based CSRs represent a set of outbound contact centres that are significantly smaller in size. To re-state our prior cautionary note, it is imperative to take into account the number adoption (#) statistics in conjunction with the percentage adoption (%) statistics so as not to be misled.

Table 14: Home Based CSR Use by Category

In our sample, 44 centres used home based

CSRs with approximately 1995 home based CSRs. This equates to 19.0 percent of centres that report employing home based CSRs. Of centres that make use of these arrangements, on average, 19.0 percent of their CSRs are home based. Alternatively, of all CSRs represented in this study, 5.8 percent are home based.

Increasing the use of home based CSRs

enables employers to save considerably on facilities and turnover costs. Moreover, many employees report great satisfaction with the opportunity to work from home (Bloom, 2014). FedEx Canada, for example, is a pioneer in home based CSR use. It has a home based CSR program for all three of its centres in Montreal, Mississauga, and Vancouver (“Home Sweet Home,” 2009). Home based CSRs who work daytime shifts live within driving distance of a FedEx contact centre, and work out of a centre twice a month for coaching and to attend work group meetings. Voluntary turnover among these positions is low. Other companies, such as the CAA in South Central Ontario, use LiveXchange, a third party home based CSR provider, to set up a home based CSR program (“Home Sweet Home,” 2009). LiveXchange assumes the responsibility for hiring staff and managing the infrastructure.

% # % #

Union StatusNon-Union 21.2 35 20.7 1140Unionized 13.4 9 12.1 855

Call DirectionInbound 20.4 39 16.6 1934Outbound 12.2 5 37.0 61

Ownership TypeInhouse 17.5 29 21.2 1627Outsourced 22.7 15 14.7 368

Overall 19.0 44 19.0 1995

Centre Adoption

CSR Adoption

Category


28

Employee Outcomes

We examine indicators of employee stability including tenure, absenteeism, and both positive (e.g., promotions) and negative (e.g., dismissals, quit rates) turnover. We evaluate the effects of human resource practices on stability because workforce instability is costly to organizations. Tenure

We asked managers about the average tenure of the CSR workforce, and the percentage of CSRs with either less than one year of tenure or at least five years of tenure. Together, these three statistics can indicate workforce stability. Across all contact centres participating in our study, CSRs have an average tenure of 6.1 years (Table 15). The median values lower than the mean suggest that there are contact centres with CSRs who stay in their jobs for longer than CSRs in other centres. A detailed examination suggests that CSRs employed in government and public sector centres tend to stay longer.

CSRs employed in unionized centres report the longest tenure (8.8 years), while CSRs working in outbound centres have the shortest tenure (4.6 years). More detailed analysis shows that tenure is significantly higher in unionized, inhouse and inbound centres. One measure of employee churn is the percentage of CSRs with

less than one year of tenure. Across all centres in this study, an average of 21.6 percent of CSRs have less than one year on the job.

Both outsourced (32.3%) and outbound centres (32.7%) employ the highest percentage of CSRs with less than one year of tenure. We interpret this as an indicator of a higher level of churn in these workforces. Unionized centres have a more stable workforce with only 11.2 percent of CSRs reporting less than one year of tenure. Outsourced centres employ a significantly higher proportion of agents with less than one year of tenure (32.3%) compared with inhouse centres (17.3%). Further, outbound centres employ a higher proportion of CSRs with less than one year of tenure than inbound centres, and non-union centres also employ a higher proportion of less experienced CSRs than unionized contact centres.

At the other end of the spectrum, we asked respondents to report the proportion of their CSRs with at least five years of tenure. In our study, 38.7 percent of the CSR workforce has at least five years of tenure. Statistically significant differences exist between unionized and non-union contact centres, but not by ownership type or call direction for this statistic.

Table 15: Tenure by Category

Average Median < 1 Year > 5 Years

Union StatusNon-Union 5.0 3.0 25.9 33.1Unionized 8.8 8.0 11.2 52.1

Call DirectionInbound 6.4 5.0 19.3 40.1Outbound 4.6 3.0 32.7 31.7

Ownership TypeInhouse 6.6 5.0 17.3 40.6Outsourced 5.0 3.0 32.3 33.9

Overall 6.1 5.0 21.6 38.7

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31

We also examine turnover by schedule and found that quit rates in centres operating beyond business hours are three times as high (20.9% for extended, and 18.2% for 24/7) as centres operating on a business hours schedule (6.1%) (Table 17). Interestingly, dismissals are lowest in centres operating on a 24/7 schedule. Although dismissal and quit rates are highest in extended hours centres, these centres also have the highest internal promotion rates (7.2%).

An aspect of promotions is that they create vacancies within the organization and a loss of human capital for the centre when the employee is transferred to another part of the organization. We asked managers to report the percentage of employees in their centres who are promoted within the centre itself. On average, just 5.7 percent of the workforce is promoted annually within a centre to provide a ready supply of supervisor candidates.

Table 17: Types of Turnover by Operating Schedule

We examined the relationship between

turnover and contact centre size and found that quit and dismissal rates increased as contact centre size increased. Quit rates in contact centres with more than 300 seats are over three times higher (25.1%) than quit rates in contact centres with 1 to 25 seats (7.5%) (Table 18). Quit rates increase with centre size and quit rates represent the largest turnover component for all categories presented (organizational category, operating schedule, and centre size), with the exception of contact centres operating regular business hours. In short, quits are the most frequent source of turnover in most centres.

How Management Practices Reduce Turnover and Absenteeism

Turnover and absenteeism increase expenditures related to recruitment, screening, and training, and reduce organizational performance. Managers in this study estimated that it took roughly 29.6 weeks for newly hired employees to become proficient on the job. With total annual turnover estimated at 29.5 percent, some centres find that they lose employees almost as quickly as employees become proficient on the job. While we find that work in some centres is highly standardized, this portrait is not universally true.

Table 18: Types of Turnover by Size

CategoryQuit

RatesPromoted in Centre

Promoted within

Business

Dismissal Rates

Retirement Rates

Working HoursBusiness Hours 6.1 4.1 7.0 7.6 1.8Extended Hours 20.9 7.2 4.0 8.5 0.824/7 18.2 5.1 4.7 5.6 1.1

Overall 15.7 5.7 5.1 7.5 1.2

CategoryQuit

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Business

Dismissal Rates

Retirement Rates

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33

IV. LONGITUDINAL RESULTS

In 2011, we surveyed many contact centres that participated in our 2006 survey. In total, 122 centres responded to both surveys. The following section presents a selection of noteworthy findings observed for these respondents.

Since our last report, numerous layoffs

occurred in contact centres across the country. Convergys, one of the largest contact centre service providers in the world, downsized several of their Canadian operations. Since 2008, Convergys centres closed in Alberta, British Columbia, Manitoba, Ontario, Nova Scotia, and Newfoundland (Cash, 2010; “Convergys Call Centre,” 2013; “Convergys Closing Call Centres,” 2008; “Convergys Closing Cornwallis,” 2010; “Convergys Cuts 800,” 2010; “Convergys to Lay Off,” 2013; Cusi, 2013; MacIntosh, 2014; Rothenburger, 2009). These closures represent the elimination of roughly 5000 jobs. Although the Convergys case is an extreme one, it clearly illustrates a U.S. organization’s response to less favourable economic conditions.

Contraction in the outsourced segment in particular was a dominant theme during the economic downturn. Where outsourced centres established operations in cities such as Kamloops, BC, Prince George, BC, and London, ON to capitalize on higher unemployment and labour availability (translating into lower costs) during favourable economic times, they have since downsized these operations in light of the changing environmental conditions (“300 Prince,” 2009; Daniszewski, 2010; Rothenburger, 2009).

The centres participating in both the 2006 and 2011 waves of data collection increased in size over this time. We interpret this change as being a result of closure and consolidation among contact centres in reaction to the 2008 economic downturn. Centres in our 2006 study employed nearly 17,000 employees. The same

contact centres grew to roughly 18,000 employees by 2011 – an increase close to 7%. This pattern does not suggest overall industry growth – quite the opposite, given that these contact centres were in operation since at least 2006 and weathered a five-year recessionary slump. In fact, of the 406 centres originally surveyed in 2006, at least 21 were no longer operating in 2011. Consequently, the findings reported in this section should be interpreted carefully.

Consistent with previous sections of this

report, we present our results by separate categories for 2006 and 2011. Table 20 highlights contact centre and employee distributions by union status, call direction, and ownership type.

Table 20: Longitudinal Distribution of Centres and Employees by Category

Three of the 122 centres unionized between 2006 and 2011. During this time, the proportion of unionized employees represented increased from 15.6 percent in 2006 to 21.4 percent in 2011. These figures particularly emphasize the importance of interpreting this section cautiously. For example, if we calculated workforce distribution only for centres that did not change their union status over the five-year period between 2006 and 2011, only 19.0 percent of the

2006 2011 2006 2011

Union StatusNon-Union 74.6 72.1 84.4 78.6Unionized 25.4 27.9 15.6 21.4

Call DirectionInbound 81.1 82.0 81.3 87.0Outbound 18.9 18.0 18.7 13.0

Ownership TypeInhouse 65.6 64.8 56.9 59.6Outsourced 34.4 35.2 43.1 40.4

CategoryCentres Employees


34

CSR workforce would be categorized as unionized – lower than the 21.4 percent reported (which is calculated including the three centres that unionized between 2006 and 2011). The longitudinal sample consists of a distinct set of Canadian contact centres: centres still in operation since 2006 that participated in the 2006 survey, and that also agreed to participate in the 2011 survey. In addition, workforce changes can be a result of centre-based categorical shifts and not just direct growth or shrinkage (e.g., contact centres unionizing in addition to unionized centres hiring additional CSRs).

Technology Adoption Table 21 displays technology adoption

statistics for the longitudinal sample, where numerous categorical shifts in technology use are apparent. Although we found less variation in overall technology adoption between 2006 and 2011, some patterns emerge. For example, unionized centres increased adoption of customer relationship management (CRM) technology while outsourced centres have reduced their reliance on this technology. Unionized centres decreased their adoption of web enablement technology from 53.3 percent in 2006 to 39.4 percent in 2011. A similar trend can be observed when examining outbound centres, with web enablement technology use dropping

from 57.1 percent in 2006 to 40.0 percent in 2011.

Apart from increased VoIP adoption, we

found few changes in technology adoption. Although VoIP adoption has increased noticeably over the five-year period, it is interesting that, in 2011, still only 38.3 percent of centres that participated in both the 2006 and 2011 surveys adopted VoIP technology, representing an increase from 21.7 percent in 2006. Perhaps the expenditures associated with implementing VoIP technology, bolstered by the weak economic environment, are responsible for the low level of adoption. Overall use of CRM technology, though relatively unchanged from 2006 to 2011, shows changes within organizational category types. For example, outsourced centres decreased use of CRM (from 40.5% in 2006 to 20.5% in 2011) while their inhouse counterparts increased adoption of CRM (from 20.5% in 2006 to 27.6% in 2011). When examining CRM use from the perspective of union status, a similar pattern appears. Unionized contact centres increased adoption of CRM (from 20.0% in 2006 to 36.4% in 2011) while non-union contact centres reduced CRM use (from 29.4% in 2006 to 20.7% in 2011).

Table 21: Longitudinal Technology Adoption by Category

2006 2011 2006 2011 2006 2011 2006 2011 2006 2011

Union StatusNon-Union 52.9 53.7 24.7 43.9 58.8 54.9 29.4 20.7 7.1 7.3Unionized 53.3 39.4 13.3 24.2 63.3 63.6 20.0 36.4 16.7 18.2

Call DirectionInbound 52.1 51.6 21.3 40.0 64.9 60.0 29.8 26.3 11.7 11.6Outbound 57.1 40.0 23.8 30.0 38.1 45.0 14.3 20.0 0.0 5.0

Ownership TypeInhouse 52.6 48.7 12.8 34.2 56.4 63.2 20.5 27.6 12.8 13.2Outsourced 54.1 51.3 40.5 46.2 67.6 46.2 40.5 20.5 2.7 5.1

Overall 53.0 49.6 21.7 38.3 60.0 57.4 27.0 25.2 9.6 10.4

Interactive Voice Response CRM

Speech RecognitionCategory

Web Enablement VoIP


35

Number of Customers per Day The number of customers a CSR handles in

a day has declined dramatically – overall, and within all organizational categories. We observe sharper declines in some categories relative to others and highlight longitudinal comparisons in Table 22.

Outbound contact centres handled less than half the customer volume in 2011 than they did in 2006. It is likely that the global economic recession is responsible for the overall reduction in call volume, and that the DNCL further diminished volume for outbound contact centres in particular.

Table 22: Longitudinal Number of Customers per Day and Average Call Duration by Category

Average daily call volume fell from 108

customers in 2006 to 83 customers in 2011. One potential explanation for a reduction in customers handled is an increase in call duration. As we also report in Table 22, call duration changes do not appear to explain a reduction in customers. Call durations were stable between 2006 and 2011 (averaging 5.3 minutes in 2006 and 5.2 minutes in 2011).

Language Offerings

Non-English language offerings generally increased throughout the five-year period. Cantonese, Mandarin, and German language offerings in particular have grown in these longitudinally surveyed centres. Overall levels of French and Spanish language offerings were stable from 2006 to 2011. We present language offerings by category in Table 23 below.

Table 23: Longitudinal Language Offerings by Category

2006 2011 2006 2011 2006 2011 2006 2011

Union StatusNon-Union 106 78 75 66 5.6 5.6 4.5 4.1

Unionized 114 96 73 68 4.6 4.3 3.0 3.3Call Direction

Inbound 88 80 70 65 5.2 5.0 3.7 4.0Outbound 209 98 180 93 5.8 6.3 5.0 4.3

Ownership TypeInhouse 94 81 75 70 5.1 4.6 3.2 4.0Outsourced 139 88 78 56 5.8 6.5 5.0 5.0

Overall 108 83 75 66 5.3 5.2 4.0 4.0

Average MedianAverage MedianCategory

Number of Customers per Day by Category Average Call Duration by Category

2006 2011 2006 2011 2006 2011 2006 2011 2006 2011 2006 2011

Union StatusNon-Union 73.6 73.9 6.7 14.1 6.7 10.3 2.2 4.5 16.5 17.0 12.1 8.0Unionized 58.1 67.6 6.7 11.4 6.7 12.1 6.5 14.7 12.9 17.6 13.3 6.1

Call DirectionInbound 68.7 71.0 5.1 11.1 5.1 10.1 4.0 8.0 14.1 15.0 12.2 8.1Outbound 73.9 77.3 13.6 23.8 13.6 14.3 0.0 4.5 21.7 27.3 13.0 4.5

Ownership TypeInhouse 63.8 69.6 7.6 13.0 7.6 11.7 3.8 6.3 13.8 16.5 15.2 6.4Outsourced 81.0 76.7 4.9 14.0 4.9 9.3 2.4 9.3 19.0 18.6 7.1 9.3

Overall 69.7 72.1 6.7 13.3 3.3 10.8 3.3 7.4 15.6 17.2 12.4 7.4

Cantonese Mandarin German Spanish OtherCategory

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37

In 2011, there were simply fewer CSRs earning high salaries to increase the overall mean. In 2006, one outbound centre reported paying its CSRs an average salary of approximately $80,000, the highest average reported in our 2006 sample. However, in 2011, the highest reported average annual earnings for outbound CSRs fell to $48,000.

The adoption of individual performance-based pay dropped for outbound centres from 34.8 percent to 27.3 percent, possibly as a recessionary response. Group performance-based pay also dropped from 2006 to 2011, overall (from 23.0% in 2006 to 16.4% in 2011), and throughout all of our reported organizational categories.

Table 24: Longitudinal CSR Pay Levels by Category

We attribute the degree of sensitivity of

outbound CSR performance-based pay to the negative economic conditions, combined with the relatively high adoption of performance-based pay. Median salaries provide guidance regarding the distribution of CSR salaries across the categorizations of centres.

Manager Compensation

We report managerial pay statistics in Table 25 below. Consistent with CSR salaries, managerial pay levels also increased from 2006 to 2011. Individual incentive adoption, however, decreased from 50.0 percent to 35.2 percent overall (Table 25, Columns 7 and 8).

Table 25: Longitudinal Managerial Pay Levels by Category

2006 2011 2011(i) 2006 2011 2011(i) 2006 2011 2006 2011

Union StatusNon-Union $28,167 $31,450 $28,802 $27,900 $31,847 $29,165 27.5 31.8 25.3 19.3Unionized $41,665 $46,808 $42,867 $40,000 $49,700 $45,515 12.9 2.9 16.1 8.8

Call DirectionInbound $33,206 $38,130 $34,920 $33,000 $35,000 $32,053 21.2 23.0 23.2 17.0Outbound $26,306 $26,464 $24,235 $23,000 $29,000 $26,558 34.8 27.3 21.7 13.6

Ownership TypeInhouse $35,111 $38,512 $35,269 $35,000 $38,000 $34,800 17.5 21.5 26.3 21.5Outsourced $25,574 $31,157 $28,534 $24,500 $28,000 $25,642 35.7 27.9 16.7 7.0

Overall $32,023 $36,130 $33,088 $30,000 $35,000 $32,053 23.8 23.8 23.0 16.4

Category


Average Median Individual Group

2006 2011 2011(i) 2006 2011 2011(i) 2006 2011 2006 2011

Union StatusNon-Union $55,698 $60,589 $55,487 $51,500 $60,000 $54,948 52.7 38.6 36.3 22.7Unionized $71,444 $80,499 $73,721 $75,000 $75,000 $68,685 41.9 26.5 16.1 14.7

Call DirectionInbound $62,077 $68,325 $62,572 $60,000 $63,000 $57,695 49.5 35.0 31.3 21.0Outbound $50,611 $57,856 $52,984 $45,000 $50,000 $45,790 52.2 36.4 30.4 18.2

Ownership TypeInhouse $63,526 $71,869 $65,817 $60,000 $66,500 $60,901 50.0 36.7 28.8 25.3Outsourced $52,594 $55,527 $50,852 $50,000 $52,000 $47,622 50.0 32.6 35.7 11.6

Overall $59,992 $66,422 $60,829 $55,000 $62,000 $56,780 50.0 35.2 31.1 20.5

Category Average


Median Individual Group


38

Although we find that unionized centres increased their mean salary by over 10%, we did not find a corresponding increase in their median salary level since 2006. Our interpretation of this result is that we have a few contact centres where managerial salaries are particularly high: the highest being $150,000 in 2011, compared to $100,000 in 2006. Our interpretation is that managerial pay is right skewed – our data contain a few centres with relatively high managerial pay levels – in 2011. This is different than the left skewed distribution evident in 2006, and suggestive of relatively marginal increases, if any at all, in managerial salaries for the majority of unionized centres.

Though managerial salaries are highest in

unionized contact centres, this is the only group where median salaries did not increase from 2006 to 2011. CSR pay levels in unionized contact centres, as shown in Table 24 (Columns 1 to 6, page 37), increased the most during this same period. We interpret this finding as a reflection of the unique union context.

Table 25 also compares managerial salary

levels in 2011 to inflation adjusted 2006 salary levels (Columns 3 and 6). Median managerial compensation in unionized centres, inbound centres, and outsourced centres was lower than

our inflation adjusted estimate. These summary statistics should be interpreted with caution. Factors underlying managerial salary levels (e.g., a younger, lower paid, managerial workforce) might also explain these changes. We did not capture data surrounding these underlying factors in our survey. Benefits

We present longitudinal benefits offerings by organizational category in Table 26 below. With the exception of day care (which has increased), and supplemental health care (which has decreased), benefit offerings by centres between 2006 and 2011 remained stable. It is only when disaggregated by category that longitudinal patterns emerge. For example, centres offering day care increased from 4.1 percent in 2006 to 6.6 percent in 2011 (Table 26, Columns 1 and 2). The overall increases appear to be driven primarily by inbound or inhouse contact centres.

The overall decrease in supplemental health

care appears to be systematic, though some categories exhibit larger decreases than others. Though still at the lower levels of adoption, outbound and outsourced contact centres surveyed longitudinally have increased their paid sick day offerings, while their offerings of paid holidays or vacations declined.

Table 26: Longitudinal Percentage of Centres Offering Benefits by Category

2006 2011 2006 2011 2006 2011 2006 2011 2006 2011 2006 2011

Union StatusNon-Union 3.3 4.5 83.5 83.0 70.3 70.5 93.4 92.0 65.9 64.8 71.6 58.8Unionized 6.7 12.1 96.8 100.0 96.8 97.1 100.0 100.0 87.1 85.3 90.3 79.4

Call DirectionInbound 4.1 8.1 92.9 95.0 85.9 85.0 99.0 99.0 76.8 76.0 85.4 71.1Outbound 4.3 0.0 60.9 54.5 39.1 45.5 78.3 72.7 47.8 45.5 39.1 36.4

Ownership TypeInhouse 5.1 9.0 93.8 94.9 91.3 88.6 96.3 98.7 81.3 75.9 83.5 69.2Outsourced 2.4 2.3 73.8 74.4 50.0 58.1 92.9 86.0 52.4 60.5 62.5 56.1

Overall 4.1 6.6 86.9 87.7 77.0 77.9 95.1 94.3 71.3 70.5 76.5 64.7

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atterns in e, as well

in the seats) – in 2011.

ats also m rates: in 2011. hibited a r span.

ed

7.1


41

In Table 29 below, we display the breakdown of absenteeism by number of seats, and hours of operation. Absenteeism increased across centres regardless of their operating schedule.

Table 29: Longitudinal Absenteeism by

Operating Schedule and Size

Turnover Overall turnover rates increased during the

five-year survey span. While promotion-based turnover remained relatively unchanged from 2006 to 2011, dismissals and quits increased: both overall, and within each organizational category. Promotions, however, exhibited minor category-based variations. Table 30 highlights the different types of turnover experienced by the contact centres surveyed longitudinally.

In 2011, centres that participated in both waves of data collection lost roughly one third of their core workforce within the past year as a result of the turnover types we outline in Table 30. This represents a marginal increase from the roughly 28 percent reported in 2006. Outbound and outsourced centres continue to experience the highest quit and dismissal rates – and in 2011, the proportion of CSRs lost to these types of turnover exceeded our 2006 findings. Outbound centres lost an average of nearly 40 percent of their CSR workforce in the year leading up to when they were surveyed in 2011, with over 35 percent of turnover attributable to quits and dismissals. We find a similar pattern for outsourced centres. These statistics, in combination with the tenure figures highlighted in Table 28 (page 40), suggest that it is primarily low-tenure CSRs that are exiting centres. With macro-environmental pressures arising from the economic recession and other external forces (e.g., the DNCL), it is possible that the organizational climate within centres may not be as pleasant as they were during stronger economic times. CSRs with more tenure, however, have established networks and can adapt to their centres’ environment. Therefore, new hires in 2011 may face more strenuous working conditions (as suggested by the increased time to become competent depicted in Figure 13, p. 36), than CSRs hired earlier.

Table 30: Longitudinal Types of Turnover by Category

Category 2006 2011

Number of Seats1 to 25 3.1 10.526 to 50 5.7 4.251 to 100 5.8 8.1101 to 300 6.7 6.2More than 300 6.3 6.0

Hours of OperationBusiness Hours 3.9 5.3Extended Hours 5.8 8.724/7 4.9 7.5

Overall 5.1 7.3

2006 2011 2006 2011 2006 2011 2006 2011 2006 2011

Union StatusNon-Union 15.7 18.1 6.1 5.1 4.3 4.1 6.5 8.1 0.8 0.4Unionized 2.9 8.4 2.8 3.8 6.6 6.4 1.1 3.9 1.9 2.5

Call DirectionInbound 11.1 13.8 5.4 5.0 6.2 5.9 4.0 5.1 1.1 1.3Outbound 17.6 21.5 4.2 3.4 0.2 0.2 10.1 14.4 1.3 0.2

Ownership TypeInhouse 8.7 9.8 4.7 5.1 6.3 6.2 3.7 5.5 1.4 1.5Outsourced 19.8 26.0 6.3 3.9 0.9 2.5 8.1 9.4 0.6 0.2

Overall 12.3 15.2 5.2 4.7 5.0 4.8 5.1 6.8 1.1 1.1

Promoted in Centre

Promoted within Business

DismissalRates

Retirement RatesCategory

QuitRates


42

Table 31 shows turnover by centre operating size. Only the smallest (1 to 25 seats) and largest centres (more than 300 seats) had lower quit rates than in 2006. Centres with 1 to 25 seats experienced a drop in all turnover types, except for dismissals. By 2011, dismissals are a greater source of turnover than quits (4.3% versus 3.1%) in these smaller centres.

The longitudinal and full samples differ. Individual incentive pay is higher for non-union centres than in the full sample, and the pattern of individual incentive pay in unionized centres is the opposite of unionized centres in the full sample. From the longitudinal analysis, unionized centres also seem to have a CSR workforce with longer tenure, and lower quit rates.

Table 31: Longitudinal Types of Turnover by Operating Size

Union Status and Working Conditions

Table 32 compares longitudinal working conditions between non-union and unionized centres. It is useful to compare the longitudinal sample to the full samples from 2006 and 2011, which we included in Table 32. The full samples include centres surveyed in both 2006 and 2011, in addition to centres that participated during one wave of data collection in either 2006 or 2011. When we refer to the full sample, we include both the longitudinally surveyed sample, and the additional centres. It is important to recognize that the full sample and the matched sample are not mutually exclusive.

A possible explanation for these differences is that centres operating since at least 2006 likely serve organizations and industries that are more resistant recession. A selection effect essentially occurs with the longitudinal sample: centres surveyed in 2006 and 2011 are different than centres that did not survive to, or respond in, 2011. Also, it appears as though the longitudinal unionized centres have greater workforce stability than unionized centres in the full sample. This pattern supports our earlier distinction between the longitudinal sample and findings for the full 2011 sample we describe in earlier sections of this report.

Table 32: Longitudinal Union Effect on Working Conditions

2006 2011 2006 2011 2006 2011 2006 2011 2006 2011

Number of Seats1 to 25 6.7 3.1 4.9 4.1 6.6 5.4 2.4 4.3 1.4 0.526 to 50 8.7 13.1 5.1 4.8 3.6 4.1 6.2 7.8 0.6 1.751 to 100 11.8 22.6 5.0 5.8 6.9 6.1 5.0 6.4 1.1 0.8101 to 300 18.2 27.5 6.1 5.1 1.9 5.7 7.2 10.1 0.3 1.3More than 300 28.9 22.6 4.9 4.6 1.7 3.2 8.6 6.4 3.2 1.1

Overall 12.3 15.2 5.2 4.7 4.5 5.0 5.1 6.8 1.1 1.1

Promoted within Business

DismissalRates

Retirement Rates

QuitRates

Promoted in CentreCategory

2006 2011 2006 2011 2006 2011 2006 2011Annual Salary $28,167 $31,450 $41,665 46,808$ $29,331 $32,735 $39,903 45,192$ Individual Incentive Pay (%) 27.5 31.8 12.9 2.9 8.0 10.5 1.6 10.6Annual Quit Rate (%) 15.7 18.9 2.9 5.9 16.5 19.2 5.0 7.5Annual Dismissal Rate (%) 6.5 8.2 1.1 3.4 7.1 9.2 2.4 3.5Absenteeism (%) 5.3 7.3 4.2 7.4 5.8 6.2 5.8 6.8Average Tenure (Years) 4.4 5.2 12.5 10.7 4.3 5.0 11.3 8.8

Non-Union UnionizedMatched Sample Full Sample

UnionizedEmployee Outcomes

Non-Union


43

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