It’s Almost May: Is Your Fall Contact Center Capacity Plan in Place?

Contact center capacity planning for fall peak season requires decisions that start months earlier than most leaders expect. Many also don’t realize how many strategic questions need to be asked as part of this process, and the potential consequences of the decisions made.

Let’s explore the contact center staffing process, the options, the questions, and why the ability to accurately forecast future demand and craft a long-term capacity plan is so critical to meeting your cost and service goals.

Long-term capacity planning in contact centers: how it works

Long-term capacity planning in contact centers is an exercise in backwards scheduling and requires collaboration across functions — including HR, Finance and Training.

Why fall contact center staffing decisions start in May

Fall marks the peak season for a number of industries, including:

• Fall open enrollment for health insurance, October through December
• Retail holiday shopping season, also now starting in October and running through mid-January (to handle the returns and exchanges)

Let’s look at what ramping up for these periods takes. For ease of explanation, we’ll use small, round numbers, but you can imagine the compounded complexity for large insurers and on-line retailers.

Say you have a contact center with 80 agents. The forecasted volumes for this year’s enrollment period say you need 100 agents to meet your service levels of 80% of calls answered in 20 seconds (80 in 20). You need 20 more agents. Here’s how you backwards schedule.

Alternative contact center staffing strategies for peak season

Meeting fall peak season demand through hiring new agents might not always be possible. There might be a hiring freeze, or the job market is tight, or the economy might impact volumes, and corporate executives don’t want to risk overstaffing.

A good workforce planner, armed with workforce management software (WFM) that can execute what-if scenarios for long-term planning, can create cost/benefit analyses for these alternative options to hiring. The workforce planner then partners with the Contact Center leader and Finance to weigh the pros and cons of each option.

Option 1: maximize agent overtime

One option is to maximize overtime. Based on local and national labor laws, the number of hours an agent can work overtime each week can vary from 2 to 10 hours. For this example, we’ll use the maximum of 4 hours per week. Using the what if scenario building capabilities in modern WFM solutions, you can calculate what your coverage would be if you maxed out overtime, or applied different percentages to overtime usage. Maybe agents can do a maximum of 4 hours of overtime per week, and you want to see what it would look like at just 2 hours and just 3 hours were used.

You’ll assess each scenario for the level of coverage it gives you. Our forecast says we need 20 agents overall for the month, but to simplify this analysis we’ll look at the hours just for a week. Using our 80-agent center example, 80 times 40 hours per week = 3,200 hours. Twenty additional agents for fall peak season would mean 800 hours is needed. Overtime scenarios for existing agents:

• 80 x 2 hours = 160 (equivalent of 4 FTE) — a shortfall of 640 hours
• 80 x 4 hours = 320 (equivalent of 8 FTE) — a shortfall of 480 hours, but it gets you almost halfway to goal

Service-level impact

Based on standard Erlang C modeling, a 480-hour shortfall would drop service levels from 80% of calls answered in 20 seconds, to 60% in 20 seconds, increasing the average time to answer to 30 to 40 seconds. Not too bad of a hit, and one most consumers would tolerate. But consumers expectations keep rising, and if your time to answer starts increasing, you risk increased wait times, higher call abandonment, and frustrated customers.

Cost impact

Using a standard industry benchmark of a $40,000/year salary for an agent, hiring 20 new agents would amount to $15,385/week. Overtime for 80 agents, at time and a half, for 4 hours each per week would cost $9,120/week. That’s a savings of $6,265/week over hiring new, with only a modest hit to service levels. This could be viable option if all employees are willing to work overtime, and if you are willing to accept a lower service levels target for that time period.

And there are all kinds of ways you can slice and dice this. Maybe an online retailer has peak volumes in the late afternoon/evening, from 3 p.m. to 7 p.m. What if you hired part-time agents just for an evening shift? Your WFM solution can calculate the cost and service impact of that scenario, and many more.

Option 2: outsource peak volume to a BPO

Another option is outsourcing the extra volume to a business process outsourcer (BPO). With an outsourcer, you typically supply them with the volume of calls or number of agents you need covered and the time period. Your WFM solution can also help identify the call or interaction types you anticipate, and the specific skills that the resources will need to execute them effectively.

So if we needed 20 new agents to cover peak volumes, and let’s say these agents would take 140 calls per week. 20 x 140 = 2,800 calls/week, 11,200 calls per month, for 3 months = 33,600 calls total.

Now you need to get bids from your BPO partners on this volume, AND you typically need to lock down headcount at least 90 days in advance. So again, for an October start, you need to be in discussions with your BPOs in June and July to secure the resources.

Service impact

Provided you have a good relationship with your outsourcer, and finance approves the contract for the full volume of calls, then your service levels should remain intact.

Cost impact

You, the workforce planner, and the head of the contact center and finance would need to sit down and compare the costs of outsourcing, vs. overtime, vs. hiring vs. any other creative options you come up with.

One advantage to outsourcing is that when the fall peak season is over, the headcount disappears. If you hire new, then you are faced with the challenge of what to do with these new hires when interaction volumes go back to normal.

What-if scenarios: questions your WFM solution can answer

Contact center workforce management software with robust long-term capacity planning capabilities makes it easy to test scenarios, experiment with options, and provide accurate analyses to help anticipate challenges and develop plans for the unexpected the “what ifs” in your business. Questions executives might ask that previously, without a long-term planner, might have taken weeks of analysis, can be answered in days or even hours. Questions like:

• What would reducing headcount by 10% save us? What would the impact on service levels be like if we took that action? What impact might be on attrition, if current agents are expected to take on more work? What will that attrition cost us?
• If the economy and consumer spending slows by 5%, how does that impact our volumes? By what % might we be overstaffed and what would that excess capacity cost?
• What if we redeployed 2% of contact center agents to the back-office for 6 weeks during peak enrollment to help with application processing? How would that impact contact center service levels?
• What if we backfilled 20% of full-time positions with part-timers instead? What does that look like from a cost and service perspective?
• What if…
• What if…

The business case for long-term capacity planning in contact centers

Effective, long-term capacity planning helps ensure you have the right number of resources with the right skills to meet your service goals a month, three months, up to three years out! Workforce planners and contact center leaders can more confidently make decisions about future staffing needs.

Accurate forecasts

The long-term planning capability in modern WFM solutions leverage statistical analysis of historical data as well as third-party data to accurately forecast demand and capacity needs. Accurate budget planning helps prevent shortages and the need to ask finance for more headcount mid-year.

What-if scenarios

An effective long-term planning solution enables you to conduct what-if scenarios to test the potential impact of adjustments to plans before implementing them. It helps you identify all your choices so you can make a more informed decision on the option that will best meet your cost and service goals.

Maximum resource utilization

Accurate capacity plans help you know when to hire, reduce, or redeploy headcount. This helps you reduce instances of over/understaffing, minimize resource costs, and reduce overtime budgets, all while meeting service goals.

Verint is an industry leader in contact center workforce management software. Learn about Verint Enterprise Workforce Management and Verint Long-Term Capacity Planner.