Call Center Work-From-Home Trends in Post-COVID-19 World

The long-term impact of the COVID-19 pandemic on the call center industry is becoming a little clearer as some companies begin to announce their work-from-home (WFH) plans. The problem is that there is not a lot of consistency in what companies are planning to do. During employer interviews, Site Selection Group received mixed messages on the success of WFH and its sustainability long-term in an industry that relies on low-wage employees that often lack the needed home workplace environment, infrastructure, business continuity and security. To help you understand the latest trends, we have identified some of the pros and cons of WFH, emerging WFH models, and what some major call center employers have publicly announced to help you develop a location strategy.

Pros and cons of WFH for call center workers

There are positive and negative factors of WFH for call center employees. The factors can differ greatly in onshore and offshore geographies due to cultural issues, telecom infrastructure, quality of life and security risks. For example, the impact of a single data security breach can have a massive financial impact on a company. The following table highlights some of the benefits and challenges of WFH.

Four primary call center location models have emerged

Call center location models have begun to materialize over the last year. Some companies are planning to fully return to a 100% facility-based call center while others have decided to go fully virtual. The following table provides a high-level summary of each location model:

Companies are beginning to openly discuss their plans

The call center industry is still trying to figure out what they will do in a post-COVID-19 world. To provide some evidence, Site Selection Group researched multiple corporate announcements and earnings call transcripts of publicly traded companies. The following are excerpts from some of these sources:

• “Believes over the long-term, they could have 25-30% of employees work from home (70-75% brick-and-mortar).”
• “We’ve given up almost 10% of our global capacity. And we firmly believe that the hybrid model is here to stay.”
• “In our opinion, concerted opinion, we feel that number would be roughly about 25% to 30% work at home and about 70%, 75% brick and mortar. Obviously, these numbers could change in the event there is another wave of the pandemic that comes and strikes us. But at the current slope, we feel that 25% to 30% is a realistic number. Accordingly, what we've done is we've redrawn our capacity map, and we figured out that we need to give up from surplus capacity as this keeps coming up.”
• "Capital One Financial Corp. has made a permanent work from home announcement for most of its employees at its U.S. call centers for credit card services, even post-pandemic."
• “Management expects at-home to move from ~5% of work to ~35-70% of work. U.S. work will likely be >50% at home, Latin American likely shifts somewhat toward at-home, and Philippines likely remains mostly in centers.”
• “State Farm Insurance announced this week that its Lincoln office is one of a dozen around the country that will close permanently, although it will not necessarily mean any local jobs are being cut.”
• “In a market like the U.S. where working at home is a great environment and you have great broad broadband and great power, kind of reliable power etc., we've seen attrition go down significantly, we've seen absenteeism go down significantly. Our agents love -- they're able to work, they’re able to earn wages if they need to be able to work overtime, things like that to drive performance and we’ve seen that really, really well.”
• Work from home profitability benefit on business process outsourcers (Responses on whether work from home will have long-term profitability benefit):
  • “No because providers will not be able to unload the costs of fixed assets (sites) in the short term. Long term, it might be a long-term benefit to profitability but not in such a way that providers drastically adjust pricing.”
  • “I see the big impact being that now any outsourcer can start up operations in any labor market, without the same need for large scale investment.”
  • “WFH alters the tech stack required to deliver services and adversely impacts certain verticals where privacy and security are major issues.”
• “It’s become a lot more challenging. And so getting the people into the centers is becoming a big logistical problem, a project that we've had to operate under. But those that work at home, there’s issues like reliability of power and reliability of broadband.”
• “Nationwide plans to shrink from 20 physical offices pre-crisis, to just four. We think the world is changing. We’ve got to take cost out of the system. We want to enable sustainable growth.”
• “I see the big impact being that now any outsourcer can start up operations in any labor market, without the same need for large scale investment.”
• “WFH should over time absolutely help margins because call centers will not add new centers/not buy more real estate”
• “Utilization from WFH will increase, movement to lower cost geo’s is already underway”

Conclusions

The long-term implications of COVID-19 and work-from-home on the call center industry are unknown. Issues related to culture, security, training and business continuity are only a few of the hurdles that must be overcome. There is no doubt that there will be some significant challenges that surface such as data breaches or large-scale residential internet/power outages like what recently happened in Texas (winter freeze) and Tennessee (Nashville bombing) that could create chaos for WFH call center networks. Considering that the real estate cost savings may only be a few percentage points of your operating costs, you need to carefully evaluate the risk and reward of your call center location strategies.