Strategic HR Call Center Case Study

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Case No. 1: Scanim Call Center:Prepared by: Raza Moghal (6642557)Prepared for: Scott McKeeConestoga College Spring 2013

HRM8050 Sec1

Strategic Human Resources PlanningTABLE OF CONTENTSTable of Contents

2

Executive Summary and Introduction

3

Questions

4 -11Conclusion

12Appendix A: Demand Forecasting Techniques Implementation Plan

13Endnotes

14Bibliography

14EXECUTIVE SUMMARY

This paper, prepared by the Ontario HR Manager for Scanim, argues the company is ready to start the new Inbound Service and Warranty Claims Contract for Chrysler Corporation. Scanim managements recognizes they have to boost their workforce by 100 inbound operators. However, a disruption in service to existing customers will not be tolerated. Furthermore, call center operating costs must remain as low as possible during and after the personnel changes.

In order to take on the additional workload, the HR Manager wanted to ensure the call centers operational readiness. Thus, he wanted to assess their ability to determine HR Demand, as well as ascertain HR Supply and do more for succession management. Two methods for forecasting HR Demand, namely the quantitative method of regression and the qualitative envelope/scenario method will be examined. This will be followed by completing a Markov Model to determine HR Supply. Three developmental opportunities within succession management will follow next, namely job rotations, formal training and development, and mentoring and coaching. Finally, this paper will look at movement analysis as another method to ascertain HR Supply. INTRODUCTION As the Ontario HR Manager for Scanim, we are looking forward to starting our new Inbound Service and Warranty Claims Contract for Chrysler Corporation. We want to ensure, however, that we will not disrupt service to our existing customers. Nevertheless, this report argues that we are ready for the challenge. The expansion of our operation by 100 operators poses some operational hurdles. We have to ensure that our expanded operations will not reduce service quality to existing clients. In addition, we will have to hire externally to fulfill most of our personnel needs. And our call center manager assures me we will have enough trained inbound operators to ensure the optimal trade-off between maintaining customer service levels and low call center operating costs.

In order to prepare for the additional workload, we will look at two methods for forecasting HR Demand. The first is the quantitative method of regression and the second is the qualitative envelope/ scenario method. Secondly we discuss how a Markov Model can help us to complete a forecast of our internal HR Supply. Then we look at three 3 developmental opportunities as part of our new succession management program. Finally, well look another HR Supply method known as movement analysis.

1a) Comparison of 2 Demand Forecasting TechniquesAs the Scanim HR Manager for Ontario, I recommend implementing Regression Analysis and Envelope/Scenario Planning as our demand forecasting techniques. Regression analysis is a very effective quantitative forecasting technique for short-, medium and long-range time horizons and can be easily updated. A simplelinear regression modelis a mathematicalrelationship betweentwo quantitativevariables, i.e. X and Y. Y is the variable we seek to predict based on the other variable X, for which we have information. Regression can predict Scanims personnel requirements for inbound operators at varying levels of Chrysler auto sales. In preparing a hypothetical regression analysis, I also assumed I had access to 5 years of historical data with respect to matching Chrysler auto sales to the number of inbound service and warranty claims operators. I also assumed that auto sales drive the number of warranty claims processed in our call center. A regression analysis could allow us to make the following hypothetical HR Demand forecast for Scanim: For every $1 Million increase in sales (X) there is a predicted increase of 6 operators (Y) associated with that change. Envelope/ Scenario Forecasting is a qualitative and flexible HR demand forecasting technique. Envelope scenario forecastsare projections of future demand for personnel based on a variety of differing assumptions about how future organizational events will unfold. Figure 1 below illustrates envelope/ scenario forecasting for our new Inbound Service and Warranty Claims Team (ISWCT) workforce over a period of 5 years. I relied on actual Chrysler auto sales data for the year ending 2012 to generate my optimistic scenario sales figures. The Optimistic option projects 5 years out from now. Chrysler auto sales are now worth $60 Billion dollars and the size of the ISWCT has more than doubled. Secondly, the normal scenario projects out five years from now where our HR demand forecast for Scanim has remained the same. This assumes that Chrysler maintains sales at $30 Billion per year. If there would be any personnel increase, they would only represent a 5 to 10% increase. Finally, the Pessimistic scenario projects Chrysler will go bankrupt 3 years from now. Auto sales in this scenario have evaporated 100% leading to the entire disbanding of the Inbound Service and Warranty Claims Team. The optimistic and pessimistic scenarios presented above, and their matching staffing tables, demarcate the four corners of the envelope starting from now and extending to 3 or 5 years from now. The normal scenario plots the midpoint along the envelope. Each of three distinct scenarios generates its very own staffing table based on each forecast. Figure 1: ISWCT Workforce Scenario ForecastsI recommend both quantitative and qualitative forecasting techniques to achieve a more comprehensive demand forecast as well better decision making and organizational results. Regression analysis can help us proactively and successfully recruit, select, develop and train employees and deploy them at the exact time theyre needed. In addition, envelope/scenario planning can generate preplanned and flexible HR demand estimates to help us adapt to rapidly changing circumstances. This latter technique infuses our strategic HR planning process with the elements of uncertainty and change.1b) Demand Forecasting Techniques Implementation PlanRefer to APPENDIX A at the end of this document to locate the plan. The plan strives to achieve the optimistic scenario mentioned above that takes place five years from now where the Scanim ISWCT workforce has more than doubled. 2. Explanation of Markov AnalysisMarkov analysis forecast of a firm's future human resource supplies, using transitional probability matrices reflecting historical or expected movements of employees across jobs. Markov analysis is a non-complicated way to predict the internal supply of human resources into the future. The technique can help us identify how many of our staff will remain in their jobs at years end, how many will transition into new positions within our call center, or how many will exit our company altogether.

A probability matrix is developed to determine the probabilities of job incumbents remaining in their jobs for the duration of a forecasting period, moving into a different position, or exiting the organization. The forecast time period is usually one year in length. To predict the number of employees who will remain in their positions at years end, the matrix should be multiplied by the number of employees in each job at the start of the year. The Markov Model below was created specifically for Scanims new warranty claims contract. I, as the Scanim HR Manager for Ontario, along with the ISWCT Management Team can rely on the model to predict the internal supply of our inbound operators into the future. Markov ModelYear 2014

Year 2013Initial Staffing LevelManagerCoach/ SupervisorBilingual CSRCSRExit

Manager

11----

Coach Supervisor

42(.80)1(.10)1(0.10)

Bilingual

CSR

151(.05)11(.75)3(.15)

CSR

852(.02)66(.78)17(.2)

Predicted End of Year Staffing Level 13146621

The above table shows the incumbent Manager will remain in his/ her present position at the end of the year. Only two of the current Coach Supervisors will remain in their positions. One will leave the organization and one will be promoted from a Bilingual CSR role. Eleven of the Bilingual CSRs will remain in their position, three will leave (based on a probability of 15% which is less than the standard 20% turnover rate for CSRs). One new Bilingual CSR will be created from a CSR promotion. Finally, Sixty-six CSRs will remain in their present positions, seventeen will leave the organization (based on the industry CSR turnover rate of 20%) and two will be promoted into a Bilingual CSR Role.3. As part of Scanims new succession management program, I recommend we use the following three development methods for our new Inbound Service and Warranty Claims Team:i. Job Rotation;ii. Formal Training and Development; andiii. Mentoring and Coaching.Job rotations are lateral transfers of employees between jobs in an organization. Despite that rotations involve changing jobs; there is no assurance of greater decision-making or financial reward. Job rotation programs boost morale,job satisfactionandorganizational commitment, and decrease turnoverin customer service roles - all of which more than compensates for the time and expense involved in cross-training the employees in their new roles. And higher level supervisors and management staff positions can keep abreast of customer needs and wants by rotating frequently into front-line customer service positions.

PROS Helps reduce job monotony and expands an employees professional network. Broadens an employees knowledge and experience. Makes employees more satisfied, motivated, and committed to the organization. Useful for orientation and career development.CONS Employees require more time to learn their new jobs and may produce more errors while they learn. The work completed by a trained employee is of greater quality and quantity than that of a new worker. Older employees must assume additional work and stress in order to orient, train and socialize the new arrivals.

Staff may be rotated away from a task they particularly enjoy or perform well such that newcomers cannot possibly perform the same tasks as well.ii. Formal training and developmentCall centresare at thefront lineofcustomercontact and service. For Scanim inbound operators to deliver superior customer service, our operators will require a thorough knowledge of our service and warranty claims, as well as grasp call center technology to retrieve client information, and how to promptly execute client requests. Our inbound operators will have to be adept with keeping up with changing technology and client needs. We will seek formal training and development opportunities through our local post-secondary institutions to prepare our employees for their new roles as inbound service and warranty claims operators.PROS Employees will learn together the same information at the same time. Training programs conceived for adult learners will incorporate methods to suit multiple learning styles. Formal education programs enable employees to acquire specific skill sets and complete specific and measurable tasks needed to do their work. Formal training can take place in-house in the form of courses or through on-the-job learning.

CONS Some external courses may prove quite expensive if they require an overnight stay at a hotel out of town. It can be difficult to assess the expertise of external trainers and their training courses, and there is no guarantee the knowledge they convey will be of particular value. Employees learn at different learning speeds and those who are slower learners progress at a compromised rate.

Not all the learners start at the same knowledge or skill level. There is a risk that those starting from the absolute beginning may be lost from the start and will not be able to keep up for the duration of the training session.

iii. Mentoring and Coaching Both Mentoring and coaching can provide trainees with one-on-one learning opportunities with experienced employees in both formal and informal settings. The ISWCTs 4 coach supervisors could benefit from mentoring prior to the start of our new contract. A mentor and/or coach could help our supervisors to better recruit, screen, and hire front line CSRs as well as teach supervisors how to mentor and coach front-line employees and assist with any other skill to ensure the success of the new contract. Furthermore, there is a positive correlation betweenthe percent oftime coachingCSRs and CSR retention. Our 4 coaching supervisors should thus, coach and support our CSRs to boost their confidence and self esteem for higher productivity, greater customer satisfaction and problem resolution. The investment in mentoring and coaching outweigh the costs. PROS

Increased productivity, enhanced achievement of targets, and reduced customer complaints; Improved job satisfaction and motivation, improved organizational commitment, improved staff retention, and development of a positive work culture. Accelerated learning and the development of new knowledge and skills. Improved career progression and potential rejuvenation of longer serving staff. Increased psychosocial support to our CSRs via counseling and friendship to boost their self-confidence, productivity and organizational commitment.CONS

Fees paid to external coaches and mentors and establishing their credibility. Ensuring trust and confidentiality between the mentor/coach and protg. Potential conflicts of interest may impair the full transfer of knowledge and wisdom to the protg. Both mentor and coach will use work time and consume training materials in order to coach junior employees4a. Movement analysis enables us to analyze personnel supply, and in particular examines how promotions or job losses and how their subsequent chain or ripple effect impacts the movements of company personnel. In our case, very few of our CSRs will be promoted up to the Bilingual CSR role. To illustrate how a hypothetical movement analysis works, we could say Our Movement analysis has identified this years need to fill 2 coach supervisor vacancies. And 6 movements will occur across the entire ISWCT due to the ripple or chain effect on promotions. Notice how the total number of personnel movement is exceeds the number of vacant coach supervisor positions to be filled. This is how personnel movement works according to the movement analysis technique. A movement analysis will likely show that our personnel supply will not generate many ripple effects/ chain movements at the Manager or Supervisor level. We need to keep in mind that the organizational structure of the ISWCT is relatively flat, and will afford very few career advancement opportunities as compared to more hierarchical organizations. Thus, very few CSRs will be recruited, trained and employed into the Bilingual CSR, Coach Supervisor and Manager Positions. Figure 2 illustrates below our call centers Personnel Funnel in which the greatest movement of personnel will occur at the front-line CSR level. The personnel supply at this level will be entirely external. The diagram also graphically depicts the high level of turnover for our CSRs and that very few advance to the top position within call center. I as the HR Manager and in collaboration with the ISWCT Manager will set our HR supply mix to be purely external, meaning that we will hire almost entirely externally for our CSR positions. However, as we move into the higher level positions, we will start to fill them through our internal HR Supply and will thus promote and hire from within.Figure 2: Scanim Personnel Funnel

Source: Strategic Human Resources Study for the Canadian Customer Contact Centre Industry, 2003, p. 63.CONCLUSIONIn this paper, we made the case that we are getting ready to begin our new Inbound Service and Warranty Claims Contract for Chrysler Corporation. To ensure we can increase our workforce by 100 operators, we examined both regression and the scenario/envelope techniques to forecast future requirements for HR demand. The Markov model we created will help us prepare for individual movement between jobs in our call center. The model relies on historical data to calculate transitional probabilities to predict how long employees will remain in their jobs, will be promoted, or will depart our company. This model can help us keep track of our open positions as well as track career progression. Movement analysis enables us to identify where our vacant positions are and who will fill them. We then looked at some developmental opportunities to help us with our new succession management plan.Finally we have to ensure that our new team contains enough trained inbound operators to ensure the optimal balance between maintaining high service levels to our Chrysler customers and low call center operating costs. And we hope to transition from being primarily a cost center to a profit center by earning increasingly more revenue through up-selling extended warranties and other products and services.APPENDIX A: DEMAND FORECASTING TECHNIQUES IMPLEMENTION PLAN

Goal/ describe results

Achieve Optimistic Scenario in which in Chrysler auto Sales are $60 Billion dollars 5 years from now and Scanims Inbound Service and Warranty Claims Team has more than doubled.

Person Responsible

Scanim HR Manager Ontario Scanim + Inbound service and warranty Claim Team Manager, Supervisors, Bilingual CSRs, and CSRs Coach Key Action Steps

The call center Manager and Supervisors need to ensure that weekly staffing levels can respond to the demand for inbound service and warranty claims processing.

Management will need to ensure that operators consistently deliver a high level of customer service while minimizing operating costs.

The management team will encourage CSRs to continually seek up-sell opportunities, such as selling extended warranties to callers.Potential Problems/ Hazards/ Risks

1. Operator absenteeism

2. Staff attrition

3. Declining agent engagement given repetitive and monotonous work.4. Call Centers flat organizational structure with limited career prospects

5. Mandatory cost-cutting in call center operations especially if there is a downturn in Chrysler auto sales.

Problem/ Risk Rating

1. Agent absenteeism is likely.2. Staff attrition is likely.3. Declining agent engagement is likely.

4. Flat structures with limited career prospects are certain.

5. Mandatory staff reduction if there is a downturn in sales is likely.

Problem/ Risk Control Measures

1.Reduce absenteeism with return-to-work interviewsto help supervisors

better understand employee absences and how they can be avoided.

2. Reduce attrition by hiring people who see call center work as a career option.3. Institute an operator of the month recognition program. 4. Create a more tiered contact centre with more job levels to allow

for both mobility and succession planning

i.e. creation of a specialized Level 2 CSR

position.

Other Measures:Performance Management improves agent and supervisor productivity and reduces the cost per transaction .Surveying customer employee feedback to improve performance.Coaching to reduce costs, increases productivity,

and increases first call resolution (FCR) and customer satisfaction. Time Frame, Monitor and Review

Offer intensive training for new operators for the first 3-4 months.

Track operators in the first 6 months so that Management can monitor their performance and identify best performers.

Provide job

rotation opportunities for operators between 24-36 months on the job to avoid burnout

and to promote job growth.

Commit to continuous improvement until the end of the 5 year inbound service and warranty claims contract (60 months from now).

ENDNOTES Monica Belcourt, McBey Kenneth, Ying Hong, and Margaret Yap,Strategic Human Resources Planning, (Toronto, ON.: Nelson Education Ltd., 2013), 143.

Ibid., 144.

Ibid., 148.

Five things I learned from January car sales numbers. Last modified June 23, 2013, http://www.theglobeandmail.com/globe-drive/driving-it-home/five-things-i-learned-from-january-car-sales-numbers/article8352815/.

Hermann Schwind, Hari Das, and Terry Wagar, Canadian Human Resource Management: A Strategic Approach. 9th Ed., (Toronto, Ontario: McGraw-Hill Ryerson, 2010), 106.

Strategic Human Resources Study for the Canadian Customer Contact Centre Industry. Last modified June 6 23, 2013, http://www.iccs-isac.org/en/pubs/ HRDCCALL.pdf, iii.

Monica Belcourt, McBey Kenneth, Ying Hong, and Margaret Yap,Strategic Human Resources Planning, (Toronto, ON.: Nelson Education Ltd., 2013), 214.

Strategic Human Resources Study for the Canadian Customer Contact Centre Industry. Last modified June 6 23, 2013, http://www.iccs-isac.org/en/pubs/ HRDCCALL.pdf, 108.

Mentoring at the Call Center Consulting Group. Last Modified June 23, 2013, http://thecccg.com/mentoring.htm

Strategic Human Resources Study for the Canadian Customer Contact Centre Industry. Last modified June 6 23, 2013, http://www.iccs-isac.org/en/pubs/ HRDCCALL.pdf, iii.



BIBLIOGRAPHY

Belcourt, Monica, McBey Kenneth, Ying Hong, and Margaret Yap.Strategic Human Resources Planning. Toronto, ON.: Nelson Education Ltd., 2013.

The Call Center Consulting Group, Mentoring at the Call Center Consulting Group. Last modified June 23, 2013. http://thecccg.com/mentoring.htm.

DMG Consulting LLC., Call Center Supervisor Best Practices Last modified June 23, 2013. HYPERLINK "http://www.dmgconsult.com/files/CallCenterSupervisor_BestPractices"http://www.dmgconsult.com/files/CallCenterSupervisor_BestPractices _White_Paper Final.pdf.

Globe and Mail, "Five things I learned from January car sales numbers." Last modified June 23, 2013. http://www.theglobeandmail.com/globe-drive/driving-it-home/five- things-i-learned-from-january-car-sales-numbers/article8352815/.

Institute for Citizen-Centred Service Network , "Strategic Human Resources Study for the Canadian Customer Contact Centre Industry." Last modified June 23, 2013. http://www.iccs-isac.org/en/pubs/HRDCCALL.pdf.

Schwind, Hermann., Hari Das, and Teri H. Wagar. Canadian Human Resource Management: A strategic Approach, Ninth edition. Toronto: McGraw-Hill, 2010.

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Strategic HR Call Center Case Study