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Low Unemployment and the effect on Utility Contact Centers

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Scott Karlin's picture
Vice President, Global Energy & Utility Solutions Alorica

Heads Alorica's global contact center outsourcing practice for Energy & Utility companies.  Services 50% of the Top 20 Electric & Gas Utilities - with over 30 Energy & Utility...

  • Member since 2018
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  • Jan 29, 2019

This item is part of the Predictions & Trends for 2019 SPECIAL ISSUE, click here for more

With unemployment hovering around 3.9% in December 2018, which includes about 3% of capable workers who actually don't want to work (by choice), real unemployment in the US is running less than 1%.  The result is not great for the traditional domestic brick & mortar contact center sites when it comes to finding plentiful, low-cost workers in certain geographies.

Competition is fierce for for entry-level to 1 or even 2 years experienced customer care staff. Retailers and fast-food establishments are now paying higher rates to secure this rapidly in-demand labor pool.  $12 to $14 per hour or more is quickly becoming the norm -- and these are exactly the staff members that in-house and outsourced contact centers search out and attempt to hire in record numbers to fill open jobs.  In the Energy & Utility sector, the addition of screening requirements for drug and criminal background checks further erodes the available applicant pool -- especially in those states where legalization of once illegal drugs has become law.   

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What does this mean for the Utility Sector? Several things actually -- and they are all going to require a change of mind-set and flexibility to adapt to available staffing solutions which may make some leaders just a little uncomfortable with the tidal wave of change that's coming.

First, traditional brick & mortar contact center capacity in the US will shrink by 30% or more over the next 3 to 5 years.  Outsourcers will not continue to invest in the USA when there are more productive alternatives. Some of the small to mid-tier outsource suppliers that you use or know of today will not continue to exist and will be absorbed into larger, financially-stable global Suppliers.  

Like it or not, traditional in-house contact centers will not be economically tenable in certain markets. Cities with higher wages and more competition for workers will feel the cost pressure first. The jobs will move to Work at Home, Other States and for the Utility industry, destinations within a 2 to 3 hour flight from the US-- such as in Mexico, Panama, Guatemala, Honduras, Jamaica and the Dominican Republic.   

More plentiful and experienced workers, reduced costs to the Utility and much lower attrition with no negative impact to CSAT or quality will continue to fuel this trend.  US contact center roles will be higher-level Analytics, Quality, Management and Analyst roles. The growth of smart home appliances and associated services together with omni-channel interactions is also helping to drive this glacial shift out of traditional US Sites.  Today a growing number Utilities either outsource some or all of their work into an Outsource Supplier in another State; via Work at Home or to a nearshore destination, close to the US with a strong cultural affinity, generally in Latin America where great English and Spanish speaking agents are plentiful.

How are things in your State?  Are you feeling the wave, yet?  Please take a moment to write a comment and join in the conversation.


Scott Karlin's picture
Scott Karlin on Jan 29, 2019

Thanks for the great questions. Several in the community have asked to hear more about Work at Home and nearby solutions that might be just outside the US.   I will publish more information about how Utilities are leveraging these solutions over the next couple of months.


Scott Karlin's picture
Thank Scott for the Post!
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