By Peter Lyle DeHaan, Ph.D.
I’ve never met anyone who felt they were overpaid. Occasionally someone will admit to being adequately compensated, but most people say their pay doesn’t reflect their work or value to the organization. This is especially true of call center agents. I’ve seen this both in running call centers and as a consultant. It matters not what the pay rate is, the universal belief is that the pay is too low.
Compensation is the single greatest expense for call centers. It accounts for anywhere from 40 percent to 85 percent of total expenses, depending on call center size. Pay too little, and turnover shoots up, training costs increase, and morale decreases. Pay too much, and the outflow of money exceeds the inflow of cash. No organization can stay in business if it loses money every month.
But what is an appropriate pay rate? Fortunately, the answer is close to home. I call it the “fast-food factor.”
Quite simply, if you hire call center agents at a fast-food wage, you’ll get a fast-food mentality and a fast-food performance. Yes, you will find the occasional star employee, but how long do you expect to retain him or her? Generally, you’ll find people with little work experience. They’ll view the job as temporary, not understand customer service, and fail to comprehend the necessity of being at work on time (much less giving two weeks’ notice before quitting). With the average agent training time exceeding the average fast-food employee tenure, you can’t afford to hire agents who might quit before they finish training. Yet when you compete with fast-food restaurants for entry-level employees, this is the likely outcome.
To succeed, call centers must pay more than fast-food restaurants, but how much more? Even fifty cents an hour can make a difference. A dollar more will have a much greater effect – if you do it right. What you must avoid when raising your starting wage is merely making it easier to find the same caliber of people; you must raise your standards, too. When you pay more, you can expect more.
As a consultant, one client’s staff kept complaining, “People working in fast food make more than we do.” After hearing five such complaints, I visited the seven fast-food restaurants within walking distance of the center. The staff’s perception was wrong, but the misinformation had gone unchallenged and been repeated enough that the lie was seen as truth.
Another client’s agents enjoyed a much higher starting wage, but they, too, complained of being under-compensated. Again, I surveyed the pay at nearby fast-food restaurants and discovered the call center’s starting wage was three dollars higher than the local fast-food benchmark. Fortunately, accompanying this higher starting wage were tighter pre-employment screening and higher performance expectations. The caliber of the staff was noticeably greater. No adjustment to their compensation was needed.
To determine the appropriate hourly rate for your call center agents, you have four options:
- Continue what you are doing (which probably isn’t working).
- Pay someone thousands of dollars to do a wage study.
- Refer to local wage surveys (which seldom list data for call center agents).
- Visit local fast-food restaurants, and then distinguish your hourly rate – and agent expectations – from theirs.
Applying the “fast-food factor” has never let me down and, I suspect, it won’t let you down either.
[From the Aug/Sep 2014 issue of AnswerStat magazine]