HSBC redundancies and their call centres

It's always sad to see bad news on jobs and HSBC's announcement last week was no exception.

The BBC report is that while the bank says that 1,200 jobs are at risk, the unions are talking about up to 3,000 jobs potentially going. The jobs will go at an operation centre in Leamington Spa, (for about 280 positions), London will loose about 150 jobs and a call centre in Newport, south Wales, will be shut down according to an HSBC spokesman. The Yorkshire Evening Post reports that 70 of the job losses will be at HSBC's direct banking arm, First Direct.

What's particularly sad is that the Newport contact centre announced in June last year that it was creating 250 new jobs (I covered it here on the blog "HSBC creates 250 UK call centre jobs & offshore in decline") and presumably these will go as will all the existing jobs.

What is better news (and I've only seen reported discretely on the CCF website), is that the bank will be creating 200 jobs at a centre of excellence in Southampton and hopes many of the workers will re-locate.

Although the Unite union is angrily warning about the dangers of offshoring, I suspect that this is something of red herring. Most of the banks are moving IT and back-office offshore (see Lloyds TSB here or Barclays here on Finextra) and there is little sign that this will change. In the contact centre space I do detect that the march back onshore continues.

Although it is expensive to run a UK based contact centre, and the credit crunch is hurting many organisations badly, it is becoming clearer that the real problem in contact centre is broken processes rather than simply the cost of agents. Add in the brand damage that a bad move off-shore can do, and I suspect only the lower end of the market may continue with a push to offshore their contact centres. Of course, consumers can't see where their web-page was coded, so the chances are that IT will accelerate its push offshore.

CRM - a way of banks gaining business in a recession?

I'm always suspicious of vendor surveys but this survey from SAP, reported on Finextra, rather caught my eye. It's entitled "European and Middle Eastern banks look to invest in CRM" and focuses on how banks are focusing on CRM to differentiate themselves from the competition.

To a certain extent this is obvious. It's hard to compete on interest rates alone, and most banks don't want to be in the position where they do. Brand is another differentiator, but a great brand with lousy customer service is hardly a way of retaining customers. Given the cost of customer acquisition and the that banks know a lot about their existing customers, it makes sense to manage the relationship better to get more value from your existing customers.

Simply managing a customers relationship well has long been a selling point of banks like HSBC's First Direct operation (see post: "The contact centre agent experience - First Direct" and "HSBC creates 250 UK call centre jobs & offshore in decline"). What's always surprised me is that while bank's have talked a lot about the importance of the customer relationship, very few have really focused on it. The report does highlight some of the challenges but I suspect that these are going to get increasing focus.

One of the problems with CRM applications in banking historically has been that it has been seen as a call centre application (maybe rolled out to branch sometimes) and as a solution in its own right. Of course the reality is that the application is only one part of the solution and the processes that go round it and the quality of the agents that use it are perhaps more important. Perhaps even more important is what the CRM application is integrated to. For example, linking CRM with a marketing spend tracker can provide all sorts of insight as to how effective marketing is, but is rarely done.

I suspect that as the economic climate gets tougher, the banks that know their customers better will be able to make better lending decisions with what credit they have. They will also be able to target their most profitable customers most effectively. The call centre is key here as it is likely to be a strong determiner of the bank's brand perception, its ability to reach its customer base and its ability to take advantage of sales opportunities when they arrive.

Effectiveness of CRM as a measure of a bank's future success? Well, there are probably dafter metrics floating around at the moment, and I wouldn't be surprised if we see a strong correlation.

HSBC creates 250 UK call centre jobs & offshore in decline

After a week off sick there's been a lot to blog on.

I was interested in the Finextra story "HSBC creates 250 call centre jobs". The interesting thing for me is that these are onshore jobs. HSBC has always had onshore operations but has also been one of the firms that has pushed call centre jobs to India. The onshore operations have tended to focus on high quality customer service (see past posts like: "The contact centre agent experience - First Direct") whereas it's always been my suspicion that cost is the primary motivation for the Indian operation.

I'm not against either cost saving or offshore, I just have strong reservations that India for lowest possible cost is a sensible customer service strategy. If offshore is an appropriate option, I've tended to look at South Africa ("Offshore - why I would go for South Africa over India"). I know there are issues with South Africa as well (SA Telecom and crime being two of the big ones), but the cost savings and availability of English are strong factors in that locations favour.

HSBC is also just part of a larger trend back onshore. Earlier this month Orange announced that it was moving 500 call centre jobs back to the UK from India, but at the same time was shedding 450 onshore administrative jobs. This is very similar to what Lloyds TSB did last month, when it decided to offshore its IT rather than its customer facing operations (I covered the story here on the blog or here on Finextra).

In short, I think the trend for customer service to go offshore has almost come to an end but administration, back-office and IT might all go offshore to a much greater extent.

UK Agent Attrition

An interesting article on silicon.com about UK contact centre agent attrition increasing for the 5th year in a row.

I actually wrote a post on the survey (and HSBC's response to agent attrition) last week "The contact centre agent experience - First Direct", but the silcon.com article has a good quote from the analysts Contact Babel.

"Steve Morrell, principal analyst at ContactBabel, said in the report: "The lack of growth in agents' salaries is certainly a major factor in producing high levels of attrition. Businesses should be working to move low-value interactions onto web and phone self-service channels, and to use the savings created to pay higher salaries to their agents. This will attract and retain high-quality staff, a move which will immediately and permanently benefit both the business and the customer base.""

All very much thoughts this blog has been discussing in terms of moving from call centre to contact centre and making contact centre part of a multi-channel strategy. I'm not sure, though, this will necesaarily translate into higher UK salaries as I see high-skill offshore like South Africa being a significant factor in the market.

I've always stressed the importance of moving to converged IP because it makes managing multi-media in a multi-channel environment so much easier. Silcon.com aren't making the connection as explictly as I do, but they do produce the quite interesting statistic that:

"...pure IP infrastructure will be commonplace in most UK call centres within the next two years, with 41 per cent of respondents saying their operations will be fully IP-architected by the end of 2009.
Currently only 17 per cent of call centres have an full IP infrastructure, with a further 28 per cent using a hybrid IP/TDM network."

I suspect that one of the other big drivers to IP (besides multi-media management) is the ability to virtualise across borders. I know this is a message Cisco has pushed strongly, and I think it's the right messge for many enterprises. This is especially true in Europe where the continuing integration of the EU offers many opportunities to distribute work more efficently and more widely. Agent jobs (especially in areas like e-mail, where language skills and accent are not so crucial) will go to areas where the work represents a higher salary and on-shore will be left with higher skill, higher value agents.

The contact centre agent experience - First Direct

There's a good overview on the BBC News website of what it's like to be an call centre agent at First Direct (the telephone and internet banking arm of HSBC). What's also interesting is that it shows how First Direct deals with the problem of agent attrition and under-motivated staff. All very relevant when at the start of the month the UK Contact Centre Operational Review found that agent attrition was up for the 5th consecutive year and now stands at an average of 32%. The idea that you loose a third of your staff in the year in which you hire them would not be sustainable in any other industry. If your brand depends on telephone service (and the staff that provide it) then it is not affordable and the BBC article shows what can be done to retain good staff and hence maintain the quality of customer experience.

I find First Direct very interesting as an example of what can be done with the contact centre. First Direct actually dates back to the pre-interent age and were set up by HSBC as experiment in telephone only banking. It was extremely successfully and has since then led a number of developments such as migrating transactions to internet and introducing fee based retail banking to the UK.

The thing that most struck me about the work environment was not the technology, but the focus on the agents. Once you've migrated simple transactions to the Internet channel, the phone becomes predominantly the channel for complex interactions. I've discussed this a little before why the people matter so much when offshoring ("Offshore - why I would go for South Africa over India") and when looking at e-mail ("e-mail in contact centres, process driven or response driven?" & more fully in "Call Centre to Contact Centre... or why worry about e-mail when the phone's ringing?"), but I think it's a topic I'll need to return to in more detail.

In the end, technology is critical for handling basic interactions and being efficient, but it's how the people in the contact centre use that technology that will determine the customer experience and the perception of the brand.

Speech market share - the role of non-European langauges

Some very good comments on the "Speech Market Share" posting I did in October, especially from Martin on Telisma and why they might have achieved such a large growth in European marketshare.

I was particularly interested to see that Telisma support Hindi and are working on another 18 Indian languages (including Indo-Arayan and Dravidian). This could be very interesting for a couple of reasons.

Firstly it's the established capability developed for the domestic market that I see as crucial for successful offshore operations. This is partly why in previous posts ("Offshore - why I would go for South Africa over India"), I've tended to rate South Africa ahead of India as a location for off-shore contact centres. If India can build a domestic capability then it's ability to take on offshore work will also improve. Also, and perhaps further off, the skills developed by Indian software developers working on speech for the Indian market could be very helpful for South Africa with its eleven official languages develop speech for its domestic market.

The second, and perhaps more unexpected use of speech is to serve migrants in Europe. These groups can be significant demographic segments and well worth offering higher service for. For example HSBC launched a UK Islamic bank in 2003 and it is easy to envisage it offering multi-lingual support for its customers. Perhaps further ahead is Canada. When I worked there I was expecting English and French telephone banking, but was surprised that Scotiabank telephone banking was available in not just English and French (as you would expect), but also Cantonese and Mandarin. It turned out that these languges gave them a competitive edge for winning business in the SMB market segment.

Given my experience of working with Canadian call centres, I am surprised that UK banks have not moved further with multiple language support. This may be a cost issue (given how cost concius the UK is) and perhaps the ability to offer automated support will change that.