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Death of the call centre? Workers ring in the changes during WFH era

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A new message frequently punctuates the muzak as customers wait to speak to a call centre worker nowadays: a recording warning them to expect “home life noises in the background” once someone answers.

“A friend of mine heard splashing water when she called her bank,” said consultant Ursula Huws, a long-term advocate for staff to be allowed to do their jobs from home and who coined the term teleworking in the early 1980s.

“The agent revealed she was in the bath. For an industry historically so resistant to remote working, that speaks volumes about how far things have come in the past 12 months.”

Before coronavirus arrived in the UK, only 3.8 per cent of the country’s 812,000 call centre workers were based at home, according to research group ContactBabel — below the 5.1 per cent average for the working population.

But as the government introduced sweeping restrictions in March last year, the pendulum swung. By November homeworking was almost twice as common among call centre staff as the general workforce with about three quarters of 139,000 agents surveyed saying they were home-based.

This looks set to remain. A recent poll of 107 call centre managers and directors conducted by industry bodies found just four who anticipate a full return to the office.

HSBC has confirmed its 1,200 call centre staff will remain at home permanently. Outsourcer Capita has said many of its 16,000-strong call centre workforce in the UK can do the same, while rival Teleperformance has indicated many of its 10,000 employees will be allowed to continue working remotely once the pandemic subsides.

First Direct customer service representative at a call centre in Leeds, England
Working from home has allowed call centres to shed costly office space © Chris Ratcliffe/Bloomberg

The shift will have far-reaching consequences: for the working lives of hundreds of thousands of people employed in the sector, for commercial landlords and for customers relying on their services.

Working the phones

The earliest known example of a call centre in the UK was in the Birmingham Post and Mail building in 1965, but it was not until the establishment of Direct Line in 1985 that they became more widespread. From 63 staff at the insurer’s call centre in Croydon, the industry has since mushroomed into one of the UK’s largest.

For a sector weighed down by a reputation for frenzied offices, distrustful management and high attrition rates, the post-pandemic world in theory offers a chance for a reset.

“Call centres are . . . a fun punching bag for a lot of people,” admitted Gary Slade, Teleperformance’s UK chief executive. But he insisted that a hybrid working model will offer his employees “more choice” rather than simply being an opportunity “to squeeze the staff by cutting costs and removing benefits”.

Yet half a dozen staff who spoke to the Financial Times on condition of anonymity, two of whom are Teleperformance employees, said remote working had made their jobs more difficult — or alleged they were being denied the right to do so.

One 26-year-old, who works for an online travel platform, described the stress from solving more complex customer queries from home as “all-encompassing”, while a 21-year-old Teleperformance agent said virtual training was “difficult to absorb”, adding that he often “had to wing it”.

Two are office-based, one of whom is working for an outsourcer in Liverpool having had repeated requests to do so remotely rejected for “no apparent reason”.

Chart showing that WFH improves staff morale but raises performance concerns

Privacy is another concern. Teleperformance has already butted heads with Unite, Britain’s biggest trade union, and the Communication Workers Union over concerns about a plan to issue remote workers with webcams.

Slade said reports they will be used to monitor staff at will are “absolutely not true”. He said webcams will be used to replicate “the checks and balances” that are normal in the office.

The FT has seen an internal memo sent to Teleperformance staff suggesting video calls could be mandated to “conduct clean desk audits” and “[detect] unauthorised objects in [an] employee’s workspace . . . such as a mobile phone”. Slade said “occasional checks” are essential to “avoid data breaches”, adding that the webcams are “not designed to be remotely activated”.

But Jamie Woodcock, who went undercover in a call centre for his book Working the Phones, fears what he describes as “callous management practices” mean the chance to improve the workplace culture with the adoption of remote working will be “squandered”.

“Managers in call centres rarely ask workers what will improve their work, instead they simply rely on ever stricter targets and monitoring to get results,” said Woodcock.

Aimie Chapple, Capita’s executive officer for customer management, insisted she was “always checking in” with staff such as during virtual coffee mornings but that a balance has to be struck between “what employees want [and] what clients want”.

Others are more optimistic. The migration of consumers online during the pandemic has prompted a hiring spree to meet demand for helplines. “Thanks to the work from home model, they’ve been able to tap into wider talent pools,” said Leigh Hopwood, chief executive of Call Centre Management Association. “A call centre in Bradford can now easily hire an agent in London.”

Landlords put on hold

The prize for call centres allowing staff to work from home is the freedom to shed costly office space.

Capita saved £10m from office closures during the first UK lockdown and has now permanently closed 49 sites worldwide, nearly a fifth of their commercial real estate holdings, with plans to offload more.

In the UK, Santander has scrapped plans for a £75m call centre in Merseyside that would have housed 2,500 workers, while travel group Saga has put a 600-capacity call centre in Kent up for sale.

The call centre industry is important to the north of the UK

That could pose a problem for landlords in regions where call centres are a major employer. “Are they lettable? It hangs on the location. Some of these [operators] went to locations which had high unemployment and not a lot of other industry,” said Mat Oakley, head of UK and European commercial property research at Savills.

In the north of England and Scotland more than 6 per cent of the local population are employed in call centres, according to ContactBabel.

They are often thought to be unappealing workplaces. “Secondary office buildings in Dundee, Prestwick, East Anglia . . . on business parks like the one where [TV show] The Office was filmed,” said one analyst.

Many suffered during a wave of offshoring in the early 2000s but customer preferences led to a return, said Oakley, who also argued that concerns about high staff turnover led to improvements in office quality.

That will increase their chances of being re-let to other businesses or to the government as part of its drive to disperse employees around the regions, he added. “Many of these centres are in the north of England, I expect quite a few will get taken up as part of the government’s move of civil servants away from London. That’s the obvious tenant.”

Customer service

Both Slade and Chapple insist productivity, as measured by metrics like average call handling time and first call resolution, have remained consistent or even improved despite homeworking.

However the shift has presented new dilemmas for satisfying customers and maintaining data security. 

“At very least, a dog barking or a baby screaming in the background [of a call] will come across as unprofessional,” said Teresa Cottam, chief analyst at telecoms consultancy Omnisperience. “But if [the agent is] handling sensitive medical or financial data and their flatmate is next to them that opens the door to fraud and crime.”

Call centres are able to remotely monitor technology “to the nth degree”, she said, but adds the “human factors” remain “very risky”.

Huws forecasts that, regardless of the great WFH experiment, employees will eventually be asked to return to the office. “Face-to-face meetings and handshakes are in call centre managers’ muscle memory,” she said. “Juggling a hybrid workforce requires good management and they’re not really allowed to be good managers.”

Sir Peter Wood, who co-founded Direct Line, rues that the heyday of the call centre “has long gone”. “I used to man the phones just for fun and sometimes call customers back . . . when they were rude to my staff,” Wood recalled. “But the romance of call centres is a thing of the past.”



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Analysis

Huawei’s fall hits growth of Sony’s chip business

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Growth of Sony Group’s semiconductor business has slowed, reflecting a plunge in shipments of image sensors for smartphones to Huawei Technologies as a result of the US-China trade war.

Although Sony has avoided a fall in the volume of shipments thanks to orders from other Chinese smartphone makers, the recovery of earnings appears likely to be delayed until the fiscal year of April 2022 to March 2023 because of weakened demand for sensors for high-end smartphones.

As Samsung Electronics of South Korea, which is strong in processing sensors for midrange smartphones, catches up, Sony is halfway towards recapturing the smartphone market.

“We cannot achieve an earnings recovery in the year through March 2022,” said Terushi Shimizu, president and CEO of Sony Semiconductor Solutions, at a press briefing on June 3.

This article is from Nikkei Asia, a global publication with a uniquely Asian perspective on politics, the economy, business and international affairs. Our own correspondents and outside commentators from around the world share their views on Asia, while our Asia300 section provides in-depth coverage of 300 of the biggest and fastest-growing listed companies from 11 economies outside Japan.

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For fiscal 2021, the semiconductor arm of Sony Group expects its operating profit to decline for the second consecutive year to ¥140bn ($1.26bn). The projection reflects changes in the smartphone market structure resulting from the trade friction between the US and China.

Huawei had a global market share at the 4 per cent level in terms of shipments in the January-March period, according to US research firm IDC. With the US government banning the export of American technology to Huawei, the Chinese company saw its market share plunge some 14 percentage points from the same quarter of 2020, when it ranked second.

At the expense of Huawei, Samsung, Apple of the US and three Chinese smartphone manufacturers — Xiaomi, Oppo and Vivo — expanded their shares.

Changes in global smartphone market shares

Sony commands half of the global market for image sensors in value. Growing demand for high-definition smartphone cameras, and the trend of using two or more cameras in a smartphone in recent years, have enabled Sony to expand shipments to Apple and Huawei on the back of its advanced technology of producing high-end sensors.

With Huawei losing its momentum, demand for cutting-edge sensors for high-end smartphones has weakened. Sony thus increased shipments to the three Chinese smartphone makers which primarily manufacture middle- and lower-end phones. While sensors for such phones are each priced low, the makers demand improvements in image quality to attract consumers.

Samsung has set an eye towards capitalising on the “new normal” created by the trade friction between the world’s two largest economies, in a bid to recover its lost ground.

Samsung ships nearly 300m smartphones per year, most of which contain image sensors it produces on its own. While having stable demand, the company is strong at producing high pixel sensors used in midrange smartphones and is enjoying growing demand.

In the global image sensor market, Samsung, with a share of 20 per cent, is trailing Sony, with its 50 per cent share. With Samsung boasting microfabricating technology needed for high pixel sensors, Shimizu said, “We are actually falling behind as far as high pixels are concerned.”

But, he added, “we will add new value using technology cultivated in the field of high image quality.”

Terushi Shimizu, president and CEO of Sony Semiconductor Solutions, speaks at a press briefing on June 3 © Masaharu Ban

Samsung has a large number of manufacturing facilities, including those for memory chips and central processing units. Sony will spend ¥700bn on production facilities in its semiconductor business under a three-year plan through fiscal 2023, up 20 per cent from the preceding plan. But if the importance of microfabrication technology increases, Samsung may gain an advantage because of its greater leeway for investment, according to a research company.

Sony is also expected to take time before reducing its reliance on the volatile smartphone market. Although the company positions image sensors for automobiles as a growth market and keeps boosting annual sales by 50 per cent, the business is still small in scale. Collaborating with its “Vision S” prototype electric vehicle project, Sony plans to develop a high-performance sensor capable of detecting objects even in the dark and sell it to American and European automakers.

Sony will also challenge for a new business model. While Sony has engaged in the sale of image sensors, it is attempting to establish a recurring model of collecting fees on a continuous basis. Specifically, it will use a sensor equipped with data-processing functions of artificial intelligence it has developed. Data, therefore, can be processed both in the cloud and in the sensor so that the volume of communication can be reduced.

For example, the sensor can be used in a camera at a cashless payment retailer with no cash register and improve the performance of street monitoring cameras.

Sony’s AI image sensor has found its way into smart monitoring cameras the city of Rome will put into use in June to optimise the operation of buses by sensing congestion at bus stops or emit light to pedestrians walking through a red light.

Image sensors with data-processing functions of artificial intelligence, developed by Sony, are promoting the rise of new core semiconductors for smartphones (Photo courtesy of the company)

The semiconductor business centred on image sensors was positioned as an engine of growth when Sony was rehabilitating itself. In fiscal 2019, it contributed to Sony’s earnings, logging more than ¥1tn in sales and an operating profit ratio of 22 per cent to sales.

Sony Semiconductor has propped up the revival drive despite such difficulties such as damage inflicted on its local plant by a series of earthquakes in Kumamoto Prefecture in 2016.

While striving to address radical changes in the smartphone market, Sony Semiconductor is being tested for whether it can develop new growth sectors such as image sensors for automobiles and AI image sensors.

Cutting-edge semiconductors are also drawing attention from the viewpoint of national security as the government has drafted a policy of courting overseas manufacturers.

The procurement of logic chips has become difficult as even Sony farms out most of production to overseas manufacturers. Asked whether Sony Semiconductor will launch production, including a joint venture project, for stable procurement, Shimizu admitted to the difficulty of producing them on its own in terms of both technology and cost.

“Generally speaking, it is extremely meaningful to receive state support,” Shimizu said, suggesting the need for government financial assistance for production.

A version of this article was first published by Nikkei Asia on June 7, 2021. ©2021 Nikkei Inc. All rights reserved

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Kamala Harris takes heat handling knotty vice-presidential portfolio

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US vice-president Kamala Harris gave a widely panned television interview while visiting Guatemala this week. 

Asked why she hadn’t been to the US-Mexico border, where an influx of migrants is putting a huge strain on local communities, Harris first dismissed the question and said, “We’ve been to the border.” Pressed, she laughed and said: “And I haven’t been to Europe.” 

Her comments drew criticism and underscored the political dangers that the number two official in the White House faces as she juggles a cumbersome, and expanding, policy portfolio.

Harris was in Central America as leader of the Biden administration’s response to the border problem, including the thorny question of how to address migrants fleeing north from the troubled countries of Guatemala, El Salvador and Honduras.

She has also been handed the nearly intractable task of shepherding contentious voting rights and police reform legislation through a sharply divided Congress. She has hit the road to sell President Joe Biden’s sweeping infrastructure plans. In addition, she has also taken an interest in black maternal mortality and other racial equity issues, including tackling vaccine hesitancy among African-Americans. 

Harris’s first foreign trip as vice-president exposed what detractors and allies alike say are her shortcomings as a politician and vulnerabilities should she run again for president. Harris, a former senator from California, abandoned a floundering primary bid for the White House in late 2019. 

Her comments earlier in the week to NBC News sparked outrage, particularly from Republicans who are hammering the administration over migrants. Meanwhile, she took flak from fellow Democrats for urging migrants not to come to the border in the first place. 

Mary Anne Marsh, a Democratic strategist, pointed to the vice-president’s failure to effectively convey her message on the trip.

“If this is your debut as vice-president on the international stage, you want to give your best performance, and she certainly can do better,” Marsh said. 

Harris made history at her January swearing in, becoming the first woman, the first black person and first Asian-American to serve as vice-president. She holds outsized power as the tiebreaking vote in a Senate evenly divided between Democrats and Republicans. But the other duties of a vice-president are less clearly defined. 

People close to the administration say that Harris has proven a deft counsellor to the president and a near constant presence at the White House, attending regular briefings, offering Biden advice and appearing at his side for big speeches. 

Biden himself served as vice-president under President Barack Obama from 2009 to 2017. When he announced Harris as his running mate last summer, he said he hoped that she would provide advice as he did to Obama. 

“When I agreed to serve as President Obama’s running mate . . . he asked me what I wanted most . . . I told him I wanted to be the last person in the room before he made important decisions,” Biden said. 

He added: “That’s what I asked Kamala. I asked Kamala to be the last voice in the room.” 

Harris is hardly the first vice-president with difficult assignments. Most recently, Mike Pence, Donald Trump’s vice-president, headed the White House coronavirus task force. 

“The vice-presidential tasks are such that usually, if you are successful, they become the president’s and the administration’s accomplishments. If you are unsuccessful, they become yours,” said Kenneth Baer, the founder of consultancy Crosscut Strategies. He was a speech writer for vice-president Al Gore in the Clinton administration and Gore’s ill-fated 2000 presidential bid. 

Harris supporters contend that her challenging portfolio only underscores the faith Biden has placed in her.

“Any one of those issues would be a full-time job for most people,” Marsh said.

Many Democrats argue Harris faces undue criticism, from Republicans in particular, given her identity as a woman of colour. But others admit she made missteps in Latin America and say that her refusal to correct course — Harris later had a frosty exchange with a Univision TV anchor about the border crisis — only remind people of her shortcomings as a presidential candidate in 2019.

“What I think you have seen in the past few weeks . . . are some of the issues you saw during the campaign,” Marsh said. “At different points during the campaign, she did not perform particularly well. Other days, she was spectacular.” 

Looming over Harris’s term is the political future of Biden, who is 78. Her allies say that she is focused on supporting the president as he seeks to push through his legislative agenda ahead of the 2022 midterm elections, when control of both chambers of Congress will be up for grabs. Next week, as part of her voting-rights remit, she will meet state legislators from Texas, where Democrats recently blocked a state bill that would have restricted access to the ballot box. 

“There is a sense . . . that she is focused on her future as opposed to the job, and I just don’t think that is true,” said Dylan Loewe, a former speech writer for then-vice-president Biden who also ghostwrote Harris’s memoir. 

“The last thing that she wants for her future presidential campaign, whenever it is, is for the storyline to be that she was focused on the future and not the president, and that she was not the same kind of vice-president to Joe Biden as Joe Biden was to Barack Obama.”

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Analysis

Big weddings may be allowed despite expected delay to lockdown easing

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Boris Johnson will consider proposals to allow larger weddings to go ahead in England, despite a likely delay to the June 21 easing of England’s lockdown.

Speaking at the G7 summit in Cornwall, the UK prime minister said the government would be cautious in its approach to ending lockdown restrictions, which senior Whitehall officials said would be delayed for four weeks.

“What I can certainly say is we are looking at the data, continuing to do that, but what you can certainly take is . . . the road map was always cautious but irreversible and in order to have an irreversible road map, we’ve got to be cautious,” he told the BBC.

Johnson will meet senior ministers on Sunday to sign off on an expected delay to the easing due to the spread of the Delta variant of Covid-19.

But ministers may still sign off on plans to allow larger weddings to go ahead. Those with knowledge of the proposals say they will mirror those currently in place for funerals. 

Indoor celebrations will be allowed up to each venue’s Covid-secure capacity, which means social distancing and masks would be required. 

Outdoor celebrations would have an overall cap, which could be 100 attendees. One person familiar with the proposals said: “It’s a completely arbitrary number and I have no idea how it would be enforced.”

Chart showing that roughly 15 million adults remain unvaccinated in England, including around two million over-50s

One senior Whitehall official said it was unclear whether the plans would be signed off. “Boris hasn’t decided but he will do it if it won’t harm the Covid situation.”

The delay to the lifting of coronavirus restrictions in England for a month comes after the prime minister’s chief medical adviser pressed him to postpone the move following a surge in Covid-19 cases.

The restrictions were meant to be removed on June 21, but Chris Whitty, England’s chief medical officer, has advised Johnson that a four-week delay to the final stage of the government’s lockdown easing plan was needed, stressing that a shorter delay would be insufficient to control the spread of the virus. Johnson is due to make an announcement on Monday.

The expected delay would come as the NHS races to vaccinate more adults amid a sharp rise in Covid-19 infections and hospitalisations across the UK due to the coronavirus variant named Delta. Almost 15m adults in England remain unvaccinated, including 2m people aged over 50, according to Financial Times analysis.

Nine in every 10 new Covid-19 cases are the Delta variant, according to a Public Health England report released on Friday.

PHE data also indicated Delta, first identified in India, is 64 per cent more transmissible than the previously dominant Alpha variant that originated in Kent.

Chart showing that cases are rising steeply in England, and hospital metrics are now also accelerating upwards. Deaths so far show no sign of a sustained rise

With two doses of a coronavirus vaccine showing good protection against infection from the Delta variant, the government is seeking to get more jabs into arms. Currently, 55.4 per cent of the adult population has had two doses.

Johnson was given data on Thursday that outlined the latest analysis of the Delta variant and its potential impact on the NHS. “It is now critical we double jab everyone as quickly as possible,” said one official.

One Cabinet Office insider said: “A delay [to lifting the final restrictions] is the only sensible course of action. It’s our working assumption. The latest modelling is dire and it would be suicide to go ahead with a full easing.”

The government’s medical advisers have modelled the impact of a four-week delay on vaccination levels, concluding that a smaller postponement would not make much difference.

But they believe four weeks would have a substantial impact by increasing the number of adults fully vaccinated with two doses, as well as giving more younger people at least some level of protection from a single jab.

Chart showing that England’s current surge in cases has a much younger age profile than its second wave last autumn, which should make it less lethal

The UK has recorded the highest weekly rate of Covid-19 cases since early March, with 45,895 new infections reported in the past seven days. This is a rise of 58 per cent on the previous week.

Office for National Statistics data showed the infection rate was highest in the north-west of England and among children of secondary school age.

Covid-19 hospitalisations have risen sharply since the Delta variant became dominant, with 884 beds occupied in England on Friday, up from a low of 730 on May 22. They have increased 9.8 per cent over the past week.

The link between cases, hospitalisations and deaths has not been broken by the vaccines, but data suggest it has weakened significantly.

More than half of the 42 people who have died after being infected with the Delta variant were unvaccinated, according to PHE.

With older people much less likely to be infected now due to vaccination than in the infection wave last autumn, the fatality rate is likely to be 75 per cent lower amid the latest surge in cases, according to FT analysis.



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