Wilton, N.

(2010) An Introduction to Human Resource Management, London: Sage

Instructors Manual

Chapter Six Chapter Case Study Six: 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 companys 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. 25 advisors deal with the ordering of spares and accessories and the remainder field enquiries about Tengo products. Tengos 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 Tengos rapid growth over the previous three years had lead 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


Whilst prior to restructuring there had been a degree of movement between the departments. What do you think the main causes of poor customer service quality at Tengo? Essentially. 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. commonly felt by the advisors to be the more interesting and desirable work. were entry-level positions. N. The majority of advisors across most of the departments were Level 2. The customer service manager considers a certain level of turnover to be acceptable and even beneficial to the firm. (2010) An Introduction to Human Resource Management. There was. employee advisors were graded into three bands. speed up response times and improve managements ability to monitor service quality. 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. It was also hoped that this would reduce training and development costs for new employees. employee turnover was found to reflect both the industry and regional average. Advisors at Level 3 were mainly those dealing with detailed technical problems.to explore the people issues that might be contributing to poor service quality. particularly the complaints department in which 25 per cent of new recruits left within the first two months. Employee absence has risen significantly.Wilton. however. with workers often trained to undertake a variety of roles. 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. 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. speed up response times and improve managements ability to monitor service quality appears not to have had the 60 . however. labour turnover has increased by 10 per cent and a number of long-serving advisors have left the centre.the HR advisor . He has asked you . 1. greater churn of employees in all other sections. typically those dealing with customer complaints. London: Sage Instructors Manual automated computer system which sought to standardise customer service. The new automated computer system which sought to standardise customer service. as well as having the best reward package. Since the restructuring. Among the technical support team. Following the restructuring. Level 1 advisors. the poor customer service quality at Tengo can be attributed to problems of people and process.

Wilton. The restructuring and redundancies are likely also to have affected employee morale and might be considered to constitute a breach of the psychological contract with a subsequent impact on the demonstration of discretionary behaviour. (2010) An Introduction to Human Resource Management. lack of variety and boredom as possible push factors. (1999) suggest that the latter form of work is associated with greater job satisfaction. strict script adherence. tight call-handling times. First. management needs to address the following questions: 61 . The restructuring and the impact on morale is also likely to be significant (as discussed above). is likely to adhere to the former. in particular the rigid demarcation between departments and the concentration of workers in specific areas of customer service. Second. Moreover. the introduction of task specialization and demarcation between departments can also be discussed relative to low satisfaction. This has removed the valuable job rotation that would likely lead to improved job satisfaction and a commensurate benefit to service quality. hard quantitative targets. For the former. high call volumes and low level of operator discretion. students might consider whether call centre work is inherently dissatisfying and whether the means of control (lack of discretion. in particular. the nature of call centre work itself. soft or qualitative targets. London: Sage Instructors Manual desired effect and customer dissatisfaction persists indicating that service quality appears not to be a function of workplace technology. Reference can be made to the distinction referred to in Box 2. qualityoriented call centres are characterised by more complex and individualised customer interaction. low call volumes and high levels of operation discretion (Taloyr et al. N. call monitoring) and management of performance are likely to be associated with poor employee retention. What information do you need to collect in orderly to understand and remedy turnover? How might this information be collected? In order to properly understand labour turnover. the management and work at Tengo. Moreover. This classification can be applied to this case where complaint handling. the increasing level of labour turnover at the call centre is likely to have a negative impact on service quality as experienced employees are replaced with newly-trained workers. A further issue concerns terms and conditions of employment at Tengo and the apparently better T&Cs (other than pay) available at other nearby call centres. for instance. flexible or no scripts. How can you explain high labour turnover in the call centre? Students might consider two themes here. prioritisation of customer satisfaction. whilst technical help is likely to be associated with the latter. 2002). Frenkel et al. High turnover in the complaints department.3 between two general types of call centre work and workflows: quantity-oriented call centres which are characterised by simple and routinised customer interaction. indicates a lack of intrinsic job satisfaction in such work. relaxed call-handling times. 3. a high percentage of operator time spent on the phone. 2. The persistence of poor customer service is more likely to lie in the organisation of work and the impact of the restructuring.

Wilton. although this turnover appears to indicate a failure in employee selection and/or training. 62 . Alongside such an approach. improved training and development and responding to the recent benchmarking exercise by improving terms and conditions of employment relative to that of competitors. N. Is turnover in the call centre likely to be universally dysfunctional? As explained in Chapter 6. This appears to be the case in the complaints department where new recruits are leaving after only a short time. What changes would you make to HR practices and process within the call centre to address any identified problems? Here the same HR solutions would seem to apply whether management was seeking to address labour turnover or poor service quality. management need to understand the dynamics of labour turnover and to identify patterns of turnover that might have a detrimental effect on performance. even in this case where turnover is clearly affecting customer service quality. management might also be proactive in seeking to identify and address the internal drovers of turnover through employee attitude survey and suitable responses to head-off any potential problems. However. improved recruitment and selection processes (to ensure realistic job preview). some turnover is likely to be functional where it leads to the loss of poor performers or those unsuited to the work. wastage analysis by department or type of work). 5. London: Sage Instructors Manual · · · Who is (and who isnt) leaving the organization? Why are they leaving the organization (or staying)? Where are the leavers going to work (if anywhere)? In short. symptomatic of wider employee relations problems). Possible initiatives might include the (re-) introduction of some job rotation and associated cross-training. 4. lowered return on investment in HRD. In order to do this the organization take reactive approach and seeks to identify prior or current patterns of turnover through exit interviews ad turnover data analysis (e. (2010) An Introduction to Human Resource Management. most labour turnover can be considered dysfunctional for a variety of reasons (loss of skill/knowledge.g.

outlining the way in which the organisation was to address a number of key challenges facing healthcare in the capital over the coming decade. However. the ratio of clinical staff to occupied beds varies from 0.4% of the total NHS workforce.9 to over 2. which imposes a maximum of 48 working hours per week. and education.000 population against an England average of 67. (2010) An Introduction to Human Resource Management. It has some of the worlds leading medical centres of excellence which form a national and international hub for innovation in clinical care. The current workforce Londons complex healthcare system has the highest number of constituent NHS organisations in the UK. Advances in technology will also have a significant impact on the shape of Londons workforce through the creation of more centres with the technology and expertise to deliver highly specialised.5 nurses per 10. and there continue to be growing numbers of women in the medical workforce. This will require the redesign of working patterns.2) but fewer nurses (62.London has more doctors (30.0 . research.As a result of historic recruitment patterns and more staff delaying retirement there are now a higher proportion of older staff in the workforce than ever before.000 staff. shape and distribution of Londons healthcare workforce. and through the development of assisted technology enabling care to be delivered closer to home.000 population compared to an England average of 21. Healthcare has always attracted a large proportion of female workers. It is anticipated that the working hours per week in the medical workforce will reduce over the next ten years reflecting a greater demand for flexible working arrangements by both men and women and the need for compliance with European Working Time Directive by 2009. NHS London published Workforce for London: A Strategic Framework.000 additional users of health services over the next ten years) and highly-variable quality of healthcare provision. the development of new skills and expertise and the opportunity to create new roles. and employs over 205. London: Sage Instructors Manual Online Case Study Six: Workforce Planning in practice at NHS London In September 2008. the report also outlines a number of key staffing issues faced by NHS London. complex care. N. London plays an important role both nationally and internationally in training and developing future healthcare professionals but suffers from high labour turnover and loss of key staff to other parts of 63 . resulting in the highest rates of consumer dissatisfaction in England.Wilton. These include a rapidly growing population (predicted to equate to 600.The lowest staffing levels are often in the areas with the greatest need more GPs are in the south and west of London than in the more deprived east and north .5) when compared with the rest of England. These challenges along with a stated strategic objective to provide world-class healthcare for every Londoner have significant implications for the size. . 15.In London hospitals. including: .8 doctors per 10.

For example.3%) is in proportion to the number of staff employed (17. To assist in the workforce planning process. trains. The review suggested that Londons NHS workforce will need to grow by between 4% and 23% over the next ten years dependent on the level of productivity delivered. as demonstrated by consistently higher vacancy rates. The first focuses on the quantitative dimensions of the required workforce needed to increase productivity. and how these will affect the overall shape and size of Londons workforce. the strategic framework acknowledged the central role played by the workforce in high quality service delivery but identified that staff were not fully utilised (productivity levels of staff in London were lower than elsewhere in England). improve service quality and to address wider initiatives in the NHS regarding the delivery of 64 . technology and patient and public expectations on the future size.7%). it is believed that London exports qualified and experienced staff to the rest of England. For nursing and midwifery. Londons share of students (18. London: Sage Instructors Manual the country. N. shape and composition of Londons healthcare workforce and the changes required to how the organisation plans.Wilton. develops and deploys its employees. In broad terms. demographic trends. Workforce for London: A Strategic Framework The purpose of the review which lead to the strategic framework was to assess the impact of anticipated changes in healthcare needs. London trains 29% of UK medical undergraduates but over a third of these students do not work there after graduation. The framework outlined three broad strands in how NHS London should respond to the demand and supply forecasting process. NHS London employed scenario modelling to provide insight into the strategic challenges ahead. However. (2010) An Introduction to Human Resource Management. Labour Demand Activity Productivity Changes in setting of care Changes in role Labour Supply Retirement Career progression Other staff outflow Inflows from commissioned education Other inflows/recruitment Actions needed to drive improvements in care and address mismatches in supply and demand Scenario modelling approach taken in Workforce for London The resulting strategic framework identified a number of both quantitative and qualitative changes in the NHS workforce needed to meet the challenges of the coming decade.

Why might the formal approach to workforce planning used by NHS London not necessarily be appropriate in many private sector organisations? 4. For example. The review also suggested enhancing employment opportunities for Londoners to reduce turnover. What responses to the workforce planning process are outlined in the case? 3. London: Sage Instructors Manual care. The framework also indicates a need to develop excellent leaders at all levels of the organisation and to develop a pipeline of talent for Chief Executive and Director roles across the capital. (2010) An Introduction to Human Resource Management. it stresses the importance of the effective integration of workforce planning. with service needs. The second element focuses on the systems required to support this new workforce. NHS staff indicated that a positive relationship with staff tends to relate to improved performance and the framework indicates a desire to engender teamworking and partnership across the organisation. The review indicated a need to develop new roles and new skills through increased targeted workforce development and investment. How can HR planning contribute to the achievement of organisational objective in all organisations? Tutors Notes The Workforce for London report provides an excellent example of public sector workforce planning and can be used to highlight why formal HR planning is important and appropriate in an organisation such as 65 . In particular. with a particular focus on fostering a climate of worker engagement and empowering front-line staff to improve and develop the services they provide. Questions 1. tailored to meet the diverse needs of patients. particularly through providing care closer to peoples homes. the review advocates the development of broader sets of skills across the workforce. What are the pertinent factors which are shaping the supply and demand for medical practitioners in London over the coming decade? To what extent are these factors reasonably predictable? 2. and educational investment. Finally. and to develop a workforce more representative of the community it serves. the framework proposes a number of changes to leadership processes. creating new freedoms to innovate and provide the leadership for local change. N. particularly through the localisation (as far as possible) of workforce planning. In response to recent staff surveys.Wilton. The review also suggests changes to where and how practitioners work.

(2010) An Introduction to Human Resource Management. What are the pertinent factors which are shaping the supply and demand for medical practitioners in London over the coming decade? To what extent are these factors reasonably predictable? Many of these are explicit in the case but it is perhaps a useful exercise for students to work through the case highlighting pertinent considerations for workforce planning.g.g. This case summarises the key points from that report. more flexible practitioners) Increase workforce diversity and representativeness through targeted recruitment from local community 66 . demography.e. home care) Factors shaping labour supply Loss of key skills and knowledge out of region Uneven distribution of practitioners across region Worker shortages in some areas (e.g. the imperative for organisations to build some flexibility into the responses to the planning process to allow for unforeseen developments should also be stressed (e.g. Planned organisational responses to meet the objectives deriving from the planning process at NHS London include: · · · Development of new practitioner roles Targeted development of required skills (broader skills to create more rounded. However. London: Sage Instructors Manual the NHS and also why it might be less appropriate in a more turbulent organisational context. breakthrough treatments. new technology). 2. patterns of labour wastage). 1. growing. ageing population Developments in technology and treatment Changes in practitioner role Changes in end-user requirements (Variable) healthcare quality Inefficient use of current staff Changes to the location of service delivery (i. nurses) Reduced maximum working hours Retirement Recruitment activity (targeted to areas of greatest need) Inflows from commissioned education Career progression Existing vacancies To some degree most of these factors are predictable to the extent that recent and longitudinal trends given management some indication of what the future might hold (e. The table below highlights the key issues: Factors shaping labour demand Demography and end-user profile (e. N. What responses to the workforce planning process are outlined in the case? The case highlights a point made in Chapter 6 that there are a wide variety of responses that organisations might adopted in response to the planning process and the issues that it identifies.Wilton.

For instance. It encourages employers to develop clear and explicit links between their business and HR plans. This leads into a discussion of the next. Students might therefore discuss the types of organisations that this precludes and the types of unpredictable contextual factors that shape labour supply and demand that diminish its appropriateness. such as public sector organisations Operating in reasonable stable product and labour markets Having key staff groups who require lengthy or expensive training Competing in industries in which decisions concerning future investment in plant and equipment are made a number of years ahead and are essential to effective product market competition (i. How can HR planning contribute to the achievement of organisational objective in all organisations? Despite the above discussion regarding the limitations of HR planning. Why might the formal approach to workforce planning used by NHS London not necessarily be appropriate in many private sector organisations? This question refers to a discussion in Chapter 6 that outlines the conditions under which formal. capital-intensive industries).g. innovation) and more efficient service delivery Improve the working relationship (partnership) between management and employees Improve the quality of leadership 3. N. London: Sage Instructors Manual · · · · · Educational investment to support continued workforce development Localisation of HR planning process to provide ensure appropriate labour supply to more tailored services designed to meet the diverse needs of patients Improve worker engagement and engender greater employee empowerment to allow for the development of new competencies (e. it is important that students recognise that some commentators argue that HR planning can be beneficial in all organisations as a means of developing organisational flexibility and adaptability and reducing the impact of uncertainty.Wilton.e. It allows for better control over staffing costs and numbers employed 67 . (2010) An Introduction to Human Resource Management. longterm HR planning is most appropriate. Marchington and Wilkinson (2005) identify the following four reasons for the continued importance of HRP: 1. related question. 4. Taylor (2008) suggests that HR planning is likely to most beneficial in organizations with the following characteristics: § § § § Large enough to be able to dedicate resources to the establishment and maintenance of an HRP function. and so integrate the two more effectively 2.

which is important to any organisation claiming to promote equal opportunities 68 . It provides a profile of current staff. It enables employers to make more informed judgements about the skills and attitude mix in the organisation. and prepare integrated HR strategies 4. N. London: Sage Instructors Manual 3.Wilton. (2010) An Introduction to Human Resource Management.