We anticipated 2020 would be "the" year for change and seismic developments in the BPO business, and we were right. We didn't realize, however, that the year 2021 would bring even more significant changes and repercussions to the BPO scene.
Hundreds of BPOs and businesses use outsourced contact centre services, and we collaborate with them. We are continually leaning in and soliciting feedback, and we will try our best to cover at least some of the important trends and catalysts in 2021, as well as what to watch for in 2022.
We talked about the spike in outsourcing demand in 2021 in August, so I won't go into detail here. Let's just say that brands are still dealing with supply chain issues, that contact centre volumes are holding steady or rising in most sectors while falling in others, that self-service options are helping to alleviate simpler service issues, that interest in global outsourcing is growing, and that the effects of 2020 are still being felt.
We saw the most severe pricing rises in the SA BPO market in 2021 compared to the last 30 years. Because labor costs account for more than two-thirds of BPO operating expenses, brands that use third-party BPO services were hit the most.
Keep in mind that before COVID, the unemployment rate in South Africa had risen to 28.47 percent, making it difficult for BPOs to recruit at competitive wages. As a result, in 2019, we began to notice an increase in outsourcing prices as well as increased productive hourly rates. A new set of issues confronted us in 2021, including workforce shortages and fierce rivalry for qualified personnel.
Brands that employ SA BPO services could expect to pay a productive hourly rate in the mid-to-high R450.00 in 2021, 2022, and possibly beyond if they want high-quality services. Expect the following to start showing up in BPO contracts in 2022 and beyond, in addition to better productivity rates:
Hourly wage bids (payroll hour) vs. hourly wage bids (productive hour) (payroll hour minus breaks)
Supervisory and other support personnel fees
Increases in the cost of living
Training fees for attrition and backfill
Models of variable compensation
It's also worth noting that there will always be a segment of BPOs that purposefully provide unsustainable below-market pricing in order to "buy" a brand's business — but is the danger to your image worth it?
Hiring and keeping staff challenges
The massive problem of hiring and staffing WAH and in-centre is inextricably linked to rising costs. The majority of us expected staffing to be a temporary issue affecting our industry. Aren't we "the" staffing experts, after all?
Despite the rise of global outsourcing, the US call centre business employs more than 200,000 people and is worth R53 billion. In reality, 2021 demonstrated that we still have a long way to go in terms of hiring, and it's completely feasible that staffing issues will persist until 2022 and beyond.
I believe it is worthwhile to inquire: isn't WAH meant to be the answer to hiring, retention, and turnover issues? No, as it turns out. Indeed, numerous brands and BPOs have told us that the possibility of working from home is contributing to a drop in application quality. Why?
Because call centre jobs are seen as a temporary way to pay expenses or segue to something better, applicants see them as such. The misconception is that working in a call centre allows an applicant to work from home in their pyjamas while "answering calls" like a receptionist or call answering service and that it is "no big deal."
So, who's to blame if applicants aren't taking the job seriously?
For years, as an industry, we've failed to educate applicants and the corporate world at large about the critical role that call centre agents play in our economy. We're not discussing the short- and long-term advantages of working for a top-tier call centre.
What happened to the days when we drew call centre personnel in with promises of career progression as well as a competitive compensation and other perks? When it comes to hiring, developing, mentoring, and retaining top-level talent, we have grown so focused on moving the masses and filling seats that we appear to have gotten off track.
People are abandoning their employment in unprecedented numbers, according to the statistics for the SA labor market in 2021. This exacerbates the "business-as-usual" turnover issues that have plagued the BPO industry since its start.
There was a time when call centre agents would leave one employer to work for another BPO that offered a better salary or a better working environment. Agents are now resigning "for no reason”, a component of this has surfaced in 2021.
HR investments for 2022
If they haven't already, anticipate BPOs and internal call centre operations in South Africa to invest extensively in HR by 2022. Digital and social recruiting, as well as intelligent recruiting and retention tactics, will be critical. Corporate Social Responsibility hiring is critical for companies who are committed to purpose-driven business practices.
The best BPOs and internal operations focus on the fundamental causes of the aforementioned hiring issues, as well as preventing voluntary resignations or separations. These businesses are heavily investing in "A BEST-PLACE-TO-WORK CULTURE."
They are obsessed with people, not just in sales speeches to clients and social media declarations, but in daily, persistent, and obsessive practice. They don't think of hiring and retention in terms of numbers or as a simple two-way street.
Because they prioritize the "human" element above all else, successful operations strive for the finest "people performance." This is also true of leaders because your operation is only as good as the agents and leaders who lead it. Front-line leaders, like agents, are affected by turnover and burnout.
So, what’s next for us in 2022?
As an industry, we are fortunate in that demand for our services is at an all-time high, and it is incumbent upon us not to disappoint our brand partners. Many companies are looking to outsource for the first time, and they need our help to navigate them through the process. Larger and more intelligent outsourced service buyers know what they expect from BPOs, and we must deliver on that promise.
We saw the rise of brands using meticulous due diligence methods to discover and pick their BPO partners in 2021. This is something for which we applaud. Selectivity in BPO partner selection can and should result in more effective outcomes for both the brand and the BPO. The majority of our "customers" are looking for proactive, agile, flexible, steady, consistent, and value-added partnerships, not just "people in chairs" or commodity BPOs.
Since the difficult days of 2020, we've accomplished a lot, worked hard in 2021, and anticipate fresh obstacles in 2022. We are a robust industry with a promising future, therefore let's keep striving for world-class!