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Hey BPO leaders! Stop talking “seats” — start talking “people”

May 11, 2018 Mike Dershowitz No comments exist
From the Desk of Mike Dershowitz

We’re currently interviewing for a new sales exec here at Rethink Staffing. At first, I thought I wanted someone directly from the BPO industry, working for a competitor, figuring that experience and contacts would be a great place to start as we try and grow Rethink Staffing.

In talking to a few candidates, they kept saying something that, for whatever reason, really got under my skin. Every time we talked about their past successes, I kept hearing how many “seats” they sold here, or how many “seats” they were responsible for managing there, or how many “seats” big was their organization.

I knew what they were talking about, and I had heard “seats” in conversation a million times within the industry. But there was something about referring to “seats” that really started to grate on me — what was it?

Then it hit me — as I was talking to them, I would explain Rethink Staffing in terms of how many “people” we have, how many “people” we will be at the end of the year, and how many “people” we eventually want to be as a company.

To me, this language symbolizes one of the fundamental disconnects in the BPO industry, and I think it sums up quite well what is broken — especially in relation to how it views its people.

• • • • •

Fundamentally, the quality and results we get from our operations are not from the “seats” that we have, but from the actual people that do the work — the “Humans of BPO“, if you will. Let’s take a look at how this “seats” language evolved to better understand what it means.

Most large-scale BPO contracts are structured according to the number of “seats” that the customer is “renting” from the BPO supplier. In a call center environment, that seat may be filled 8 hours a day, or it may be filled 24 hours a day. The supplier doesn’t care if the seat is filled or not, the customer is paying to rent that seat; the supplier makes their money either way.

Contracting for outsourced services this way made a lot of sense in the beginning of the industry. Facilities and infrastructure costs were sky-high in the developing world, and redundancy after redundancy was needed to ensure continuous operations. So it was natural that BPO leaders were focused on the cost of their physical operations, which were expensive, and not so much on the costs of their human operations, which were cheap (and why they were there in the first place).

So they priced their contracts that way — because that reflected their thinking.

• • • • •

In some cases, this went to the extreme. I know of contracts written such that the cost of the seat is the bulk of the cost of the contract, and the people get billed at cost on top of it. Meaning, the supplier adds no margin to what it costs to employ the human — meaning even the supplier doesn’t see value from the people (or else they would add margin).

Yes, you read that right. The supplier’s profit is locked into the seat, and not whether there’s actually a human in that seat. Literally, the person is an added cost to the seat, not that the seat is there to facilitate quality work getting done by the human.

No matter what you read on their websites, the reality is that this makes most BPO suppliers real-estate companies, not people companies.

This makes the incentive structure between the BPO supplier and their Customer completely misaligned, and this arrangement and others like it has set the industry up to fail — and fail we have.

The failures are well known: High daily absenteeismattritionto-the-minimums productivity, shitty quality of work, and a nasty backlash in the press to boot. All because the BPO supplier prioritizes facilities cost optimization, and have convinced their customer that this is the way to go.

And then there’s the human cost.

• • • • •

I know it seems silly, but this one thing, this one change in language (and eventually a change in our contracts) could change so much in our industry, and for the better.

At Rethink Staffing, we will only sign hourly labor contracts or per-piece work contracts. We never charge for facilities or equipment.

We don’t want ourselves or our customers distracted about any issues that aren’t related to the people or the work to be done. We give our front-line managers and our Agents the structure they need to pursue peak performance, and to want to come to work for more than just the paycheck. And we do it by treating them like humans, not like “resources” that are there to fill the all-mighty seat.

In reality, I’m not proposing anything new. Treating people well is not new. I’m just giving it a higher priority in the way our company is run versus others.

But, you don’t even need that priority to deliver better quality.

• • • • •

Coincidentally, right now we’re interviewing multi-site operations directors for one of our largest customers. Two of our candidates are touting how they achieved reduced attrition before they took over the account (they think it’s a selling point because of how bad attrition is throughout the industry). How did they do it? When asked, they both said they started treating people better and asked them what was wrong — and then tried to fix it.

It doesn’t take much.

I’m reading Muhammad Yunus’ latest book called A World of Three Zeros. Yunus makes the point, as he discusses how to reduce global youth unemployment, by saying that humans will and always yearn to be productive, creative, and to grow throughout their lives.

Even if you’re a manager of a BPO with a truly shitty work environment, take Yunus’ advice: you can still produce better quality for your client simply by changing your attitude first. Just start treating the “resources” like humans, and less like seat-fillers.

Then sit back and watch your KPIs improve.

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