by King White, on Sep 23, 2015 4:00:43 PM
The utilization of the home agent call center model continues to gain momentum as many of the technical and security related challenges have been overcome in recent years. International Data Corp. estimated that spending in home agent call center sector was $2.6 billion in 2013 and will increase at a compound annual growth rate of 21.9% to $7.1 billion in 2018. This provides further evidence that companies need to evaluate the home agent model in an effort to reduce cost, improve customer service and tackle the human resource challenges often associated with traditional bricks-and-mortar call centers.
“The home agent call center model has become a viable business model for many companies in recent years. As many companies continue to onshore call center operations, home agents are a cost effective solution that can be competitive with nearshore and offshore costs,” explains King White, CEO of Site Selection Group.
To help companies evaluate their options, Site Selection Group developed best practices and recruitment strategies that are shared in this article. These practices will be presented in an upcoming webinar entitled 5 Critical Steps to Hiring the Right Work@Home Representative. Click here to register for the Oct. 7 event at 2 pm ET / 1 pm CT / 11 am PT that will also feature home agent expert Michelle Rowan of Customer Contact Strategies and Jeff Furst of FurstPerson.
Home agent model eliminates geographic boundaries of a traditional call center workforce
Based on historic employee commuter studies completed by Site Selection Group, the typical bricks-and-mortar call center will attract more than 80% of its workforce from within a 20- minute drive of its facility. Similarly, these studies have found that more than 95% of the agents will drive less than 30 minutes to work. This constrains a call center’s ability to truly tap into the entire workforce surrounding their site. Fluctuating gas prices and increasing labor competition, make it difficult for call centers to attract from outside that drive time considering the generally low wages that are paid at call centers. We have even seen situations where call centers are re-hiring agents that were once fired for poor performance to just keep the seats filled. These are only some of the human resource issues that have made the home agent model worth considering.
Types of Home Agent Models
There are two primary home agent models — hub and spoke and virtual agent. The original model that surfaced in the early 2000s was the hub-and-spoke model. In this model, the call center would offer the work-from-home option to its current agents who were typically the top performing agents or to a new employee who met the hiring standards but had a long commute. The strategy was used as a way to save on real estate costs, reward top employees or provide incentives to attract the most-qualified agents outside the normal recruitment geography. The home agent would then come back to the center for training and for company gatherings enabling them to still feel a sense of involvement with the rest of the company. As a result of this model, you will see the labor pool slightly expanded beyond its traditional 20-30 minute drive time barrier.
The second model employs true “virtual” home agents who live anywhere and may never physically be in contact with an actual brick-and-mortar center or management team. The entire hiring and training process is virtual with the home agents using the Internet as their mode of connection to the company. This model provides virtually no geographic limitations other than the availability of high speed Internet to the agent’s home. Pure virtual call center companies such as Arise, Sykes Home (former Alpine Access) and Working Solutions pioneered this model and have seen great success.
The home agent call center model saves on real estate expenses
One of the biggest savings of a home agent is the lack of real estate expense. There are significant real estate savings including the up-front capital expenditure to the on-going rental costs. For example, to build a new call center facility in a modern bricks-and-mortar facility, you will typically spend about $5,000 per workstation. This assumes 120 square feet per workstation, $1,500 for workstation and chair, $2,500 for construction around the workstation (HVAC, lighting, electrical, generator, etc.) and $1,000 for phone/computer equipment. The annual rental costs are $2,400 if you financed the cost of the construction over a five-year lease ($20 per square foot per year gross rental rate x 120 square feet). These costs are eliminated through the home agent model.
Economic incentives for home agents are potentially available
Another interesting area for savings is the utilization of economic incentives for home agents in certain geographies. Economic incentives from local, state and federal government agencies have recently become a target of home agent employers. There are various types of tax credits and grants to pursue for home agent models. This doesn’t apply to 1099 contract employees. The challenge to obtaining incentives is the lack of capital investment and the decentralized location of home agents. The following are the types of incentives to pursue:
- Hiring tax credits – The Work Opportunity Tax Credit (WOTC) is one of the main federal tax credit incentives that Congress provides to employers for hiring individuals from certain target groups who have consistently faced significant barriers to employment. This program also applies to veterans which has been very appealing to call center employers.
- Cash grant – Many communities will offer cash grants for job creation. There are also some other programs at the state level across the United States such as the Texas Back To Work (TBTW) which provides up to $2,000 cash per job to hire unemployed people.
- Training subsidies – Many states will also provide assistance on training; however, this can often be challenging in a virtual environment. It will still worthwhile to verify any training grants and subsidies at the local or state level that might be applicable to a home agent scenario.
Recruitment strategies for home agents utilizing advanced employee analytics
Finding quality home agents is different than a typical bricks-and-mortar call center recruitment strategy. Home agents typically look different from a demographic profile. The typical call center agent is usually 20-30 years old with a high school degree or equivalent. In the home agent model, you will see the demographics shift to a more mature, older employee with more education. The challenge is that you are trying to find a needle in the haystack. Before, you knew where you had to look (within about 20 miles of my site) versus anywhere in the country. As a result, there have been many developments around how to target these agents more precisely through employee segmentation studies.
Employee segmentation focuses on understanding the lifestyles of your employees rather than concentrating on demographics. The lifestyle revolves around their buying patterns and socio-demographic attributes. The best way to maximize the value of this type of tool is to analyze your existing home agent workforce by high and low performers. Once you correctly identify the targeted lifestyles of your home agents then you are able to target them down to the street corner across the entire U.S. for more effective recruiting strategies.
Learn more about home agent recruiting in this upcoming webinar, 5 Critical Steps to Hiring the Right Work@Home Representative. To register for the Oct. 7 event to be held at 2 pm ET / 1 pm CT / 11 am PT or contact King White at Site Selection Group for additional information.
