Resourcing the Call Centre at Tengo Ltd.

Tengo Ltd. is manufacturer of notebook computers. Since first entering the market in 2000 they have enjoyed rapid growth due to the ongoing popularity of their low-cost laptops aimed at the student market and the development of a range of higher-spec ‘business’ notebooks. Their products self in 30 countries across Europe and the Far East, although their main manufacturing operations, research and development and support functions (HR, finance, sales, marketing and IT) continue to be based in the UK where they employ over 500 members of staff. Given that Tengo trade exclusively over the Internet – they do not have retail outlets nor do not sell their products through high street retailers – The company’s customer contact centre provides a number of key functions: it is the customer point of contact for spares, accessories and extended product warranties; it provides technical support for existing customers; and, it is the channel for customer complaints; and, it fields enquiries about Tengo products. The contact centre was built three years ago on a greenfield site on the outskirts of a large town in the Midlands. There are a number of other customer contact centres situated nearby and, following a number of new employers locating to the region, competition for labour is intense, especially for those with prior call centre experience.

The workforce in the contact centre consists of a customer service director, a HR advisor, a call centre manager, 8 team supervisors and 95 contact centre advisors. Out of these 95 advisors, approximately 20 form the technical liaison team who deal with detailed technical questions and 10 members of staff working in the complaints department who also deal with some low-level technical enquiries. Twenty-five advisors deal with the ordering of spares and accessories and the remainder field enquiries about Tengo products. Tengo’s call centre is known locally to offer comparatively high pay, however a recent benchmarking study of local competitors found that other terms and conditions of employment were less favourable. In particular, advisors were required to work longer shifts than employees in other nearby centres and received less holiday entitlement and fewer opportunities for training and development.

Following a periodic HR planning exercise six months ago, the HR director (based in London) felt that Tengo’s rapid growth over the previous three years had led to overstaffing at the call centre, particularly amongst the customer service department. As a result, a programme of rationalisation and restructuring was undertaken resulting in the loss of 30 jobs in the contact centre. As a result, 18 workers were made redundant, with another 12 posts lost through ‘natural wastage’. Significant investment was also made in providing more effective and interactive online product support for customers, mainly to provide detailed technical advice. A customer satisfaction survey undertaken at the turn of the year rated satisfaction with after-sales customer service as poor and, subsequently, further investment was made into a new automated computer system which sought to standardise customer service, speed up response times and improve management’s ability to monitor service quality. It was also hoped that this would reduce training and development costs for new employees.

Following the restructuring, employee advisors were graded into three bands. Level 1 advisors, typically those dealing with customer complaints, were entry-level positions. The majority of advisors across most of the departments were Level 2. Advisors at Level 3 were mainly those dealing with detailed technical problems, commonly felt by the advisors to be the more interesting and desirable work, as well as having the best reward package. Among the technical support team, 16 of the 20 advisors had joined the company at a lower-level and had previously worked in at least one of the other areas of the contact centre. There was, however, greater ‘churn’ of employees in all other sections, particularly the complaints department in which 25 per cent of new recruits left within the first two months. Whilst prior to restructuring there had been a degree of movement between the departments, with workers often trained to undertake a variety of roles, the customer service director had decided to more clearly delineate the responsibilities of each department in the hope that customer service would be improved by encouraging advisors to specialise in particular areas.

Prior to the organisational restructuring, employee turnover was found to reflect both the industry and regional average. The customer service manager considers a certain level of turnover to be acceptable and even beneficial to the firm. Since the restructuring, however, labour turnover has increased by 10 per cent and a number of long-serving advisors have left the centre. Employee absence has risen significantly. Management took the decision to seek to tackle the recruitment problems in the technical support and team leader roles by focusing outside of the organisation in order to reduce training and development costs.

Task

Recent customer service feedback highlights growing customer dissatisfaction with after-sales support and complaint handling and the customer service director is under significant pressure to address these problems. He has asked you – the HR advisor – to explore the ‘people’ issues that might be contributing to poor service quality.

1. What do you think the main causes of poor customer service quality at Tengo?
2. How can you explain high labour turnover in the call centre?
3. What information do you need to collect in orderly to understand and remedy turnover?
4. How might this information be collected?
5. Is turnover in the call centre likely to be universally dysfunctional?
6. What changes would you make to HR practices and process within the call centre to address any identified problems?