Customer Service Considers a Wage Increase

Article Featured Image

The debate over raising the minimum wage has been going on for some time in the United States, and although a higher minimum wage has not been made a policy at the federal level, many states have taken matters into their own hands. Currently, 29 states and the District of Columbia require minimum wages that are higher than the federal standard of $7.25 per hour.

Minimum wage increases went into effect for 18 states at the beginning of 2018, and more are on the way when we enter 2019. Ultimately, in a number of states, a $15 minimum wage requirement is just a few short years away, with California, Massachusetts, New York, and Washington, D.C., committing to it by 2023 or sooner.

And it’s not just happening in the United States. In Canada, the minimum wage is also a hot topic of debate, with current pay rates set on a province-by-province basis.

With this in mind, organizations of all stripes are likely thinking about how minimum wage hikes might affect their operations. This extends, of course, to contact centers, about which there is a widespread perception that employees are underpaid.

ContactBabel noted earlier this year that the average salary for new contact center agents hired in 2017 was $28,215, and job search and employee review site Glassdoor listed the average salary for a call center representative in the United States at $29,541 this year.

Average per-hour pay for contact center representatives in the United States is $13.29, with some variations depending on employer and industry, as well as geography and tenure, according to PayScale, a provider of compensation data and software.

Job site provider Indeed puts the national average per-hour rate a little higher, at $13.96, based on 58,343 salaries submitted by employers and collected from job advertisements in the past three years.

But while agent compensation is a concern, there are other pressing concerns that have historically taken precedence. Among them is a concern over how artificial intelligence (AI) technologies will alter the nature of contact center jobs.

Donna Fluss, founder and president of DMG Consulting, asserts that agent attrition is the biggest issue facing contact centers. And the statistics bear this out. According to Indeed’s data, the typical tenure for a call center representative is less than a year.

Fluss notes that positions in contact centers “are often first-time jobs for people.” And while salary is an important issue, she argues that the No. 1 reason for attrition is that employees are not getting the appropriate feedback from supervisors.

That’s not to downplay the financial considerations. According to Fluss, many agents are on food stamps or rely on other state benefits programs to make ends meet. Many also find it necessary to supplement their income with other jobs, which can contribute to lateness and absenteeism.

It is also important to note that contact center agents are often paid less than anyone else in the company despite the important role they play as the face of the organization.


An added consideration is the increasing role that technologies like speech analytics, robotic process automation, and intelligent virtual agents are having on contact center agent jobs. As technology gets more sophisticated, agents are getting more complex problems to solve, requiring more advanced skills.

Contact centers are also increasingly omnichannel, Fluss notes, which she asserts results in two outcomes: Agents might either be required to manage many different channels simultaneously or there might be different agents carrying out different functions, with those responsible for email, for example, being paid at a different rate than those responsible for another channel.

Sheila McGee-Smith, president and principal analyst at McGee-Smith Analytics, presents a different perspective, asserting that an increase in the minimum wage will not have a huge impact on contact center operations in the United States.

“We’re approaching full employment, [and] we have a very low unemployment rate as it is, so competition for people is already high,” she says. “Raising the minimum wage may not even impact the wages at contact centers all that much because they’ve had to have rates that are near living wages to begin with.”

Like Fluss, McGee-Smith notes that the types of queries that contact center agents have to answer have become more complex. This, she asserts, has led to the emergence of the “super agent,” whose job is more complicated and therefore commands higher pay, regardless of what the minimum wage is.

“We don’t have to call to find out if a check cleared. We just log in to an application on our smartphone. When we do pick up the phone to call an agent or even to chat with an agent, it’s because it’s beyond the simple,” McGee-Smith says. That, she adds, requires “a higher-level agent” who needs to be better informed and skilled.

“You can’t pay those people a minimum wage and see the kind of churn we’ve had in the past,” she says. “It takes too long to train them to [handle] those difficult questions.”

With all this going on, contact center agents have graduated beyond the minimum-wage pay scale, according to McGee-Smith.

Artificial intelligence, she asserts, “is going to help agents become the super agents they need to be,” but with that comes a new set of responsibilities. Artificial intelligence will be able to provide agents with a simultaneous transcription of what the customer is asking and suggest knowledge-base articles that the agents will then need to sort through and match to what they’re hearing from the customer; then they can start responding to the customer’s needs. “That’s not a minimum-wage job anymore,” she continues.

Brad Cleveland, senior adviser and founding partner at the International Customer Management Institute (ICMI), agrees that the tasks contact center agents face are getting more complex. “The underlying assumption is that contact center jobs, many of them are entry-level. That’s not so true anymore,” he says. “It’s very hard to put someone new to the workforce in a contact center chair and expect her to be able to really engage with customers, understand where they’re coming from, understand the organization’s processes, understand the organization’s services, and add value.”


Cleveland and others also point out that the minimum wage is less of a concern for companies that run in-house contact centers than it is for outsourcers.

“Lower-paying contact center jobs are going offshore, and thus don’t impact what is being paid in the United States,” McGee-Smith states.

Additionally, for many outsourcers, increases in the minimum wage across the country might actually be a blessing, according to Cleveland. Minimum wage hikes in some areas might actually increase their business if their operations are in lower-cost areas, he says.

But even for outsourcers, wage considerations probably are—or at least they should be—a secondary consideration, Cleveland says.

Outsourcers, he explains, are going to want to examine their business models. “Some of the automation tools and some of the things happening with AI are more of a game changer than the minimum wage,” he states.

Outsourcers might look to compete on price alone, but they should focus more on “really adding value” to their clients, Cleveland advises, noting that tools like artificial intelligence and automation can help them deliver that value.

The same can be said for operators of in-house contact centers. Cleveland advises them to “really focus on the value of the services you’re providing and learn from them. What are they telling you about the products, processes, and services that you have in the market that can help you understand where to make improvements so that your customers don’t have to contact you in the first place?

“The cheapest contact,” he continues, “is not one handled by AI; it’s one that’s not ever needed because the product works so well or the service is so easy to understand.”

Cleveland also downplays the wage issue for another reason, arguing that salary and other compensation issues have less of an impact on employee engagement than one might think. Offering an appropriate pay level is “more of a ticket to the game than…a dial where, when it goes up, there’s more engagement, [and] when it goes down, there’s less.”

Sitel Group is a contact center outsourcer based in Miami. It employs 75,000 people in 150 locations scattered throughout 25 countries. Its vice president of human resources, Ben Bekhor, echoes the assertion that nonmonetary factors have a big impact on employee engagement.

“Our approach to engagement is all about communication, employee recognition, and truly living our values by building trust and listening to our associates,” he says. “We take the time to listen to our teammates, and engagement becomes so much more than just feeling like you’re a part of an organization. It’s about making personal connections throughout all levels of the company and feeling like you have a voice.”

Equally important is the idea of fostering company culture and brand identity while remaining loyal to clients’ identities, Bekhor points out.

As for wages, Sitel Group uses a type of predictive modeling to determine salaries for its agents, including those who work from home. “We take a proactive approach to understand the changing market. We clearly understand the decline of available workers as unemployment levels have dropped to record lows,” Bekhor says.

The company, he explains, has built three-year predictive wage modeling that takes into account a competitive market analysis, prevailing wages within its operational locations, local economies, and even the geography of the states with changing wages.

“Our strategy as human resource partners is to determine the facts, offer realistic data, and look at market availability with different anchors of wages. In the end, we arm our business partners with the local story so we can create relevant customer agreements and be a local competitor in offering jobs that build lifelong skills,” Bekhor says.

Cleveland agrees that contact center jobs offer employees valuable experience that cannot be duplicated in other fields. “From a learning perspective, contact centers are incredibly rich environments in terms of what you’re going to learn about an organization and systems and processes and how to engage with customers and communication skills,” he says.

“These are really impactful jobs for employees, and it’s my hope that they’ll continue to offer a career path for employees that really want an interesting job,” he continues. “They’re just so diverse and so fascinating in what they can offer in terms of a career opportunity.”

Associate Editor Sam Del Rowe can be reached at sdelrowe@infotoday.com.

CRM Covers
for qualified subscribers
Subscribe Now Current Issue Past Issues