Perfecting CSR Utilization Practices



Ed Burns
11/26/2010

CSR utilization is a vast and complex subject.

There are various problems whose impacts manifest themselves in that big bucket labelled utilization. Simply put, utilization is an indicator of how much of a CSR’s time is spent "productively", that is on the phone dealing with customer concerns. Utilization is frequently measured as a percentage of payroll hours. For instance, if a CSR was observed or measured spending 4 hours answering phones over an 8 hour paid shift, they would be 50 percent utilized on a payroll basis.

There is a closely related and very useful concept called availability that can also shed light on utilization issues. Availability is the time truly available for answering calls after taking out time lost from the shift for all other reasons. So say in the case of our 8 hour shift, we may have lunch, and breaks, there may be a shift start and shift wrap-up meetings, or other less obvious losses of CSR time during the day. For example, to talk with a support dept, waiting for supervisory authorization for a transaction, network outages etc.

It is easy to come up with a couple of hours of lost time in even a focused and well organized CSC. In a fragmented, disorganized unfocussed, chaotic CSC, or in cases where a CSR has multiple roles, losses could be even greater. For instance if all losses of CSR time total 3 hours, our CSR’s availability is now reduced to 5 hours and if they still are spending 4 hours on the phone, their utilization on an availability basis is now 4/5 = 80 percent. It’s important to note that utilization based on payroll hours hasn’t changed at all, it’s still a deceptively low 50 percent, and under-represents what is actually happening to the CSR.

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So why is high utilization a problem? Isn’t high utilization desirable? Doesn’t it indicate our CSR’s are "busy" and therefore being "productive?" Maybe not. There is a key trade off to be made between CSR resources and customer service.

On one extreme, you could have hundreds of CSR’s, such that every customer call is answered on the first ring, customers rarely wait, CSR’s spend as long on the phone as they want, developing customer relationships, maybe even cross selling some other product/service on the way. In this case CSR utilization on any basis will be very low, but customer service and the value added by the CSC is large.

At the other extreme, we may have one highly utilized overworked CSR, fielding several hundreds of calls per shift. In this case customers will be on hold for excessive periods, many calls are dropped or lost, there are lots of repeat calls to solve problems because the CSR is too hurried to correctly solve the problem the first time, and this CSC quickly gains a reputation for poor customer service, which sooner or later translates into lost sales.

Of course these are both extremes. Most CSC’s will be somewhere in the middle, but the key is to understand that CSR utilization is the product of a trade off made knowingly or (often) unknowingly with customer service. Setting the capacity of the CSC, relative to demand in terms of calls received, is obviously a critical issue.

So how do we evaluate the capacity of our CSC relative to the demand?

This involves measuring the amount of time needed for a "typical" "average" call. That is usually easy to establish from supervisors or observation. Say it takes 4.8 minutes to answer a call, and on average, we get 50 calls a day. Therefore, the utilization of our (one) CSR would be 4.8 x 50 = 240 minutes or 4 hours or 50 % of an 8 hour shift. This is called implied utilization, and to get an accurate representation, must be calculated for each month, day, even hour.

Whether we measure utilization, payroll or availability, we shouldn’t evaluate utilization as a standalone measure. It should always be viewed in conjunction with customer service measures and we should seek to optimize CSR utilization relative to customer service goals and objectives.

Inbound calls often demonstrate seasonality, which doesn’t only mean November to April, but Monday to Friday, Night/Day/Evening Shift, or even by specific hours within a shift. Therefore, alignment of CSC resourcing pattern relative to inbound demand pattern is yet another key management concern in optimizing CSC utilization.

Over and above everything I’ve touched on, the real elephant in the room is the variability of inbound calls. Variability reduces utilization. Once we incorporate variability into the mix, any utilization over 70-80 % will start to create queuing, excessive wait times, or dropped calls even under "average" levels of variability. Under "extreme" variability, utilization of even 30, 40 or 50 percent, can still cause service level issues.

Understanding variability of demand and its impact on utilization is a key factor, and is what queuing theory is all about. You can have a well organized, focussed CSC, with a modest implied utilization indicating ample capacity, yet still be experiencing poor service. The real culprit is variability of incoming calls, and especially variability relative to capacity.

But it gets better. Variability of call length is often another big source of variability, especially in technology environments, where the call can last anywhere between one minute or 3 hours. Is there anyone who hasn’t been on lots of those? This variability of call length adds to and compounds the variability of demand, and degrades call centre performance, reducing utilization and customer service even further.

In summation, utilization is a large and complex subject surrounded by problems, and more than often misunderstood, especially the impact of variability.