Customer Service Professionals
A Key Occupation in the Information Age
Importance and Numbers of Customer Service Professionals Growing
In today's information-based service economy, where success depends on being "customer focused," the number and importance to organizations of customer service professionals is growing.
Nationally, more than 3.3 million women and men work as customer service and sales representatives in virtually every industry. Job titles include customer service representative, airline reservation and customer service ticket and gate agent, account executive, account representative, newspaper advertising sales representative, telemarketing representative, technical support representative, and eligibility and claims specialist in the public sector.
CWA Represents 60 Percent of All Organized Customer Service Professionals
Nationally, seven percent of customer service employees are represented by a union. The Communications Workers of America (CWA) represents 60 percent of all organized customer service professionals, or 130,000 employees. These include customer service representatives, sales representatives, account representatives, and technical support personnel in the telecommunications, cable, and broadcasting industries; advertising sales representatives in the publishing industry; and government information providers.
The work of a customer service professional is fast-paced, demanding, constantly changing, and very stressful. Customer service professionals are skilled communicators and problem solvers. They know a vast amount of information about the products they sell and service, and are conversant with a variety of databases that store, organize, and collect information.
Customer service professionals work with complex and continually changing information technology. Customer service employees are the interface between this new technology and the customer. By navigating through the vast amount of on-line information, customer service professionals enable the new technology to provide value to the customer while preventing information overload.
Customer Service Employees Are Key Asset
Management literature recognizes customer service employees as key strategic assets. Through relations with customers, they build trust and personalized service that helps retain loyal customers; they "tease" out information from customers to market additional services, thereby increasing revenues; and finally, they provide continual feedback to their employer on what new services customers are demanding, thereby contributing to service product innovation.
A recent Wharton Business School study documents the value of highly skilled customer service employees. This study finds that losing a customer due to poor customer service costs five times the annual value of a customer's account. At the same time, the cost of attracting a new customer is five times greater than the cost of retaining an existing customer.(1)
The importance of high-quality customer service cuts across industries. A 1996 survey of 75 communications executives found that customer service beat price as a differentiation strategy by a seven to one margin among established communications providers.(2)
Although customer service professionals are valuable assets, their employers often do not treat them that way. An organization of customer service professionals can strengthen the voice of these employees at the workplace to make sure management recognizes their true value.
Despite the growing importance of customer service professionals, little has been written about these employees, their work environment, and their unique issues and concerns. This paper begins that discussion. It is divided into two sections: first, a closer look at who customer service professionals are across industries; and second, a discussion of workplace issues and concerns of customer service professionals.
I. Customer Service Professionals: Who They Are and Where They Work
Using a conservative methodology, we estimate there were more than 3.3 million customer service professionals in 1995. This includes 2.4 million customer sales representatives in business and financial services; 310,000 transportation ticket and reservation agents; 151,000 billing and account representatives; 183,000 interviewers; 89,000 eligibility interviewers; and 150,000 customer service representatives in communications and energy industries.(3)
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Who Customer Service Professionals Are |
| Job Title |
Number |
| Transportation Reservations and Ticket Agents |
310,000 |
| Real Estate Sales Representatives |
718,000 |
| Business Services Sales Representatives |
571,000 |
| Insurance Sales Representatives |
562,000 |
| Securities & Financial Services Sales Representatives |
397,000 |
| Interviewers |
183,000 |
| Advertising & Related Sales Representatives |
151,000 |
| Billing & Account Representatives |
151,000 |
| Customer Service Representatives, Communications and Energy |
150,000 |
| Eligibility Clerks, Social Welfare |
89,000 |
| TOTAL |
3,282,000 |
| Source: Bureau of Labor Statistics, 1996. |
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Where Customer Service Professionals Work |
| There are customer service professional titles in virtually every industry. A trade publication, The Service Level Newsletter, lists the following industries as those providing customer sales and service through call centers: |
| Industry |
Department |
| Airlines |
Reservations Centers |
| Communications |
Business Office |
| Software |
Technical Support |
| Travel/Lodging |
Reservations |
| Banks/Credit Unions |
Customer Service |
| Catalogs |
Orders |
| Credit Cards |
Customer Service |
| Government |
Information |
| Health Insurance |
Claims |
| Insurance |
Claims |
| Manufacturing |
Customer Service |
| Mutual Funds |
Shareholder Services |
| Utilities |
Customer Service |
| Source: Service Level Newsletter, July 1995. |
The Bureau of Labor Statistics (BLS) ranks many customer service occupations as among the fastest-growing occupations in the nation. They project over the next ten years a growth rate of 37 percent for securities and financial services sales workers and 19 percent for customer service representatives at communications and energy companies (compared to other communications and energy job titles which are expected to decline significantly over the same period). The BLS expects that the number of transportation reservation and ticket agents, however, will decline by four percent.
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The Bureau of Labor Statistics expects that the number of transportation reservation and ticket agents will decline by four percent over the next ten years. |
II. Workplace Issues
Employers in the service industries face a choice in competitive strategy. They can adopt a cost-cutting strategy: reducing wages and benefits, downsizing, and using part-time and temporary employees. They can manage by stress and speed-up: raising revenue quotas, workloads, and employee monitoring.
Or they can compete based on what is called a "high performance" strategy: investing in a highly trained, experienced work force, and providing employees with the working conditions that allow them to win customer loyalty and increase market share through high-quality, responsive, and timely service.
Customer service professionals know that the latter is the only effective winning strategy for employees. Competitive advantage, particularly in service industries with complex and constantly changing service offerings, depends upon high-quality customer care and the intelligence of customer service professionals.
Customer service professionals want to be able to provide high-quality customer service and they want the conditions at work that enable them to do so.
Customer service professionals also know that they are highly skilled professionals, and as such, have a right to the compensation, career opportunities, and working conditions commensurate with their talents and with the value they create.
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No Protection Without Representation
Absent Representation, customer service employees have no protection against layoffs that result from corporate restructuring. Sixteen hundred unrepresented customer service representatives at the regional telecommunication company NYNEX in New England understood this when faced with a massive reengineering and consolidation plan in 1994. They voted that year to join CWA.
Subsequently, with the support of the other 30,000 CWA members working for NYNEX, they negotiated a contract that guarantees a job to any employee whose current job is eliminated due to corporate restructuring, provides the option of voluntary early retirement with 6 years added to service and age, delays the date of office closings, and mandates job set-asides for surplus service reps in different titles near their current work location.
The contract also included an immediate reclassification of 190 temporary service representatives to permanent status, with priority placement for remaining temps as permanent openings became available. |
Stable Career Employment Equals Good Customer Service
Workplace policies that provide customer service professionals' stable, career employment also create the conditions at work which allow them to provide good customer service. These include:
- Job Security
- Full-Time Careers and Equity for Part-timers
- Flexibility in Work Schedules
- Fair Compensation Practices
- Training and Skill Improvement
- Service Quality
- Control of Stressful Working Conditions and Monitoring
- Healthy and Safe Work Environment
1. Job Security
Good sales and service depend on high levels of employee commitment. That in turn depends upon a commitment by employers to employment security and career opportunities for employees.
But many employers are slashing jobs through consolidation, restructuring, and contracting out work to outside vendors. Subsequent under-staffing puts additional pressure on remaining employees.
Many sales and service jobs are contracted out to vendors with no experience in the industry in which they are hired to work. Regular employees find their workload increases as they clean up the mistakes made by outside vendors (while the regular employees get no credit for the revenue generated).
Some airlines have contracted out major parts of their service operations. American Airlines recently contracted out 550 ticket agent jobs in 28 second-tier airports. These jobs pay $7 to $9 an hour with inferior benefits compared to the $19 an hour jobs of regular ticket agents.
2. Full-Time Careers and Equity for Part-timers
Many customer service employers use part-time and temporary employees to avoid paying benefits. But many employees need and want full-time work, and must work for two or three different employers to make ends meet. Even if multiple job-holders work more than 40 hours a week, they often do not work enough hours at any one employer to qualify for benefits nor to meet the work hour requirements for federal programs such as the Family and Medical Leave Act (FMLA) and unemployment insurance.
Other part-time employees prefer their part-time hours, but want equitable treatment in benefits and coverage by workplace protections.
USAirways is a typical employer who is turning full-time jobs into part-time work to save money on benefits and to encourage experienced employees to leave. When experienced employees leave, the company then replaces them with part-timers working at the bottom of the pay scale. Customer service employees hired after 1986 were put on part-time status. Today, 41 percent of all customer service agents at USAirways work part-time. As workload increases, USAirways hires temporaries or requires mandatory overtime rather than convert part-timers to full-time status. USAirways is also increasing the hiring of temporary customer service agents in the airports.
3. Flexibility in Work Schedules
Part-time and temporary work is not the "flexibility" that most customer service reps need to accommodate their multiple demands as parents, caregivers of elderly or ill relatives, or other personal responsibilities or interests.
4. Fair Compensation Practices
In many customer service workplaces, employees earn low base wages with the promise of higher earnings from commissions and progression through merit pay. Absent contractual protections, commission plans, however, often do not pay what they promise. Companies set aside a limited amount of money to pay commissions. As employees sell more, employers raise the revenue quotas and thereby reduce commissions.
Incentive pay plans can be filled with inequities. For example, how can one ensure an even distribution of business and leisure traveler calls for each agent? A reservation agent may spend half an hour on a call with a customer who then calls the next day to give the booking to another agent. Union-negotiated pay plans provide protection against such inequities.
5. Training
Customer service professionals work in a world of ever-changing technology and service offerings. They require constant
training. But in an environment of cost-cutting and under- staffing, training opportunities are often the first to go.
Few customer service organizations have developed career ladders. Nor is there a vision of how to use the information that customer service professionals have about their customers to improve the products and services.
6. Service Quality
Employers that short-shrift their employees also find that they short-shrift their customers as well. Under-staffing, speed-up, part-time and temporary employees, lack of training, and stressful working conditions undercut the ability of dedicated customer service professionals to provide good quality service.
Evaluation systems that push sales over service backfire in the long run. Consumers who are pushed to buy things they do not want will take their business elsewhere.
7. An End to Stressful Working Conditions and Monitoring
Growing job insecurity, bigger workloads, and increased pressures to sell combine to raise the stress levels of customer service professionals. Stress-related disability has reached epidemic proportions in many customer service jobs.
At call centers, employers have added another stress factor--employee monitoring. They use the computer systems that gather detailed information about customers to gather detailed information about their own employees. This information is then used to speed up work and to make employees work faster and harder.
8. Health and Safety
Customer service employees have unique health and safety problems. Many suffer from repetitive motion illnesses as a result of working all day doing the same tasks on a computer. Under-staffing, monitoring, speed-up and a highly demanding job over which employees have little control contribute to one of the highest rates of stress-related illness.
Resolving employee health and safety problems requires a two-prong approach. First, employers must provide properly designed equipment, schedule frequent breaks away from computers and sufficient time to do the work, and provide all employees with health and safety training. Second and more fundamentally, the source of the problem--repetitive and stressful work conditions--must be changed to increase the variety and autonomy and end stressful monitoring on the job.
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CWA Contracts Bar Monitoring
CWA has made progress, despite strong employer resistance, in curbing the worst abuses of supervisory monitoring. Many CWA contracts with telecommunications employers bar secret monitoring by requiring prior notification the day monitoring occurs, giving employees the option of side-by-side monitoring, and prohibiting discipline or suspension as a result of monitoring (except for gross customer abuse, fraud, or violation of privacy). |
Conclusion
Many customer service employers have chosen the low road for customer service jobs, putting downward pressure on employment standards for all customer service employees.
Through organization, customer service professionals can articulate a different vision of their profession and join together to work to achieve the compensation, career opportunities, and working conditions that will make that positive vision possible.
Endnotes
1. Aksin, O. Zeynep, "Transition to a Sales-Driven Organization," (mimeo), The Wharton School, 1996.
2. Survey by Andersen Consulting reported in Telephony, March 25, 1996, 14.
3. Bureau of Labor Statistics, U.S. Department of Labor, Employment and Earnings, January 1966, Table 11 and (for customer service representatives in utilities) Bureau of Labor Statistics, U.S. Department of Labor, Monthly Labor Review, November 1995. The 3.3 million estimate undercounts the total number of customer service professionals. It does not include catalogue sales workers and technical support employees, among others.
