Human resources management in a call centre

This essay will argue Townsends research into the paradox of recruitment and selection, training and the high level of turnover that appears in the growing industry of call. His research is based on PowerGrid, which is an Australian Government owned Power Company. There has been an enormous increase in the number of call centres, due to this a large number of interesting issues have arisen such as high level of turnover in call centres, despite companies spending vast sums of money on training and recruiting. The research of Townsend is valuable and meaningful for there has been little academic research conducted in the area of recruitment, training and turnover in call centres. This essay will be based on the critical review of Townsend’s use of research methods, findings, practical implications and the concepts he used.

Townsend adopts a three-step research strategy. Specifically, a seven-month non-participant job observation, ten interviews of managers and leaders in the organization and an analysis of the human resource documents compose the research method. Townsend considers the importance of PowerGrid call centre mainly for two reasons: At first, during the 1990s Australian government deregulation to power supplies session, PowerGrid had grew out of joint efforts by other power suppliers; Next, the PowerGrid call centre was based on Erlang C model which uses mathematical method to calculate and predict call volumes and keep balance of contact within the call centre (Angus, 2001). Townsend’s findings suggest that the company was able to reduce its cost of training and recruitment through internal transfers. Moreover, Townsend points out that training should focus more on emotional labour as it is important for call centre agents to show to their customers rather than solely focus on technical trainings and the role of the human resource department is to hire the best candidates and filter out the ones who may be incompetent.

Looking at the literature, the paradox between high cost of recruitment and training and high ratio of employees’ turnover in the sector of call centre’s, could be described as a “sacrificial HR strategy” (Wallace, Eagleson & Waldersee, 2000), this formed the basis of Townsend’s research. By agreeing with (korczynski, 2002) Townsend accepts the idea that organizations face “dual imperatives” for instance call centres want to minimise their costs but on the other hand have to provide excellent service to its customers. But companies mainly use call centres to minimize their cost rather than offer customer service, although call centre managers describes customers service as their main goal (Robinson &Morley, 2006).

Townsend agrees with (Mulholland, 2002) that whatever the type of call centre it may be, Customer service representatives (CSRs) have to show a high degree of emotional labor to the customers. CSRs are also required to have the ability of “micro-self manage” (Wray-Bliss, 2001).But on the other hand he disagrees with (Hochschild, 1983) that those CSRs who displayed artificial emotional labour suffered from negative consequences. Townsend’s argument is supported by findings of (Wharton, 1993) who through his research suggested that emotional labour does not cause any negative consequences.

Townsend discusses the importance of the role of recruitment towards the future and wellbeing of an organisation and compares it to the role of a “gate keeper” (2007: 57). It should be noted that by hiring competent applicants the firm’s productivity and performance can be improved significantly (Russo, Rietveld, Nijkamp & Gorter, 1995). It is also better to employ those people who are “willing to learn.” (2007: 478). Besides, Townsend agrees with (Breaugh & Starke, 2000) who suggested that new recruits’ job satisfaction and initial performance should be more important to organisations. That is, when the applicants are being hired it is important for the employers to see, whether the applicants’ attitude is suitable to organisations and this should be considered more important than one’s technical skills.

As mentioned before, PowerGrid is a government-owned Australian electricity supplier. Townsend acknowledges that there is difference between governments owned companies and privately owned companies. As he identifies the unique characteristics, there is a debate on whether the findings of this case could be generalized to private companies. Moreover, it’s rational to doubt whether Townsend has paid attention to the fact that his research is conducted in Government run working environment. Townsend argues that PowerGrid being a Government owned company has to have its call centers in the country, which increases costs, while on the other hand they need to be efficient in terms of operations. But being a Government owned company it has the protection of the Government in terms of costs. Private companies on the other hand do not have this advantage and may need to outsource their call centres in order to cut down their costs, to low costs countries such as India and Philippines (Snow, 2005).

Townsend identifies that PowerGrid makes internal transfers which it called positive turnover; this is when CSRs moved within the organisation. Due to this the organisation is able to reduce its training and recruitment cost which otherwise would have been spent on hiring and training new candidates. As (Robinson & Morley, 2006) confirmed high staff turnover rate in call centres can greatly affect the cost impact on business and that could be direct costs; that are training, recruiting etc. or could be indirect for instance bad customer service. But Townsend fails to give any evidence for his findings as to how we can see if the organization was able to reduce its costs by internal transfers.

According to Townsend, PowerGrid used a three stage training programs for the new recruits (2007: 485). He mentions that the first stage is the basic training program away from the computer and it is done in an environment that is decorated with nappies, baby clothes and pacifiers. He mentions that the management calls it the nursery. However, he questions the logic of using this word and shows some reservations about whether using this word is appropriate for this level but then agrees to the concept of the management who call it as part of the “fun” in the organization. But training programs are at the entry level of the company and may give wrong perceptions of the company, the perceptions may become permanent and in future it would be difficult to change these perceptions (Marchington, 2005).

Townsend points out at some of the problems faced by Powergrid with regards to training of new CSRs. Previously the training time for news CSRs was eight weeks (2007: 484). A new system was to be introduced that would half that time to nearly four weeks. Even though the management spend AU$ 30 million on the new system, it turned out to be a failure as it not only doubled the training time as new recruits would have to learn both the systems but also increased employee dissatisfaction. He points out the ineffective communication and low employee involvement during the development and implementation of this new system when he mentions about the training team leader who points out that the management did not disclose to him information about the new system due to which the new system became an “add on” (2007: 484) to the old system rather than a completely new system. According to Lewis, (1999) there is a direct link between “communication process” within the organisation and “organisational change” implementation.

Townsend identifies that the training for the employees was mostly focused on technical and product knowledge rather than on emotional labour. He believes that money would be well spent if it was spent on trying to improve the emotional labour rather than spend it on other skills. But he fails to provide any ideas on how this can be improved.

Townsend points out at the dissatisfaction of the CSRs with the management (2007: 485). The employees are unhappy with the schedule for their trainings because they had to perform their training modules outside their working hours. The employees felt they were already overburdened as they only got thirty minutes of release time which was spent mainly to check their emails. The CSRs would be dissatisfied because a CSRs job is more stressful and less satisfying as compared to other jobs (Holdsworth & Cartwright, 2003).

Dissatisfaction of managers can be identified in PowerGrid. As a call centre manager called himself “between a rock and a hard place” (2007: 487) as they had to do continuous recruitment as some of their employees would move through to the larger organization due to internal transfers and many would leave the organization altogether as they would be heavily scrutinized through the software analysis system or will not get enough pay or benefits. So in order to retain the employees the organization must offer its employees good pay and benefits and should adopt a transparent performance management system (Raman, Budhwar & Balasubramanian, 2007).

There can be weaknesses identified in Townsend’s research methods. He used three steps to conduct his research. Firstly, he used non participant job observations to carry out his research. Non participant job observations include two types’ direct or indirect observations (Rowley, 2004). It has not been mentioned if he used direct or indirect observations, as in direct observations questions can be asked and may lead to change in behavior of the people observed, on the other hand indirect observations cannot be used for gaining information on perceptions, attitudes etc. (Rowley, 2004). He made observations only once or twice a week which seem not enough. Effective observation is an art and needs to be honed and perfected overtime (Rowley, 2004). There is nothing mentioned in the article that suggests that whether the author has experience or has gone through training to conduct and observation at this level.

Secondly, he then conducted eighteen interviews of key personnel in the company who included contact centre manager, call centre manager, training team leader, roster and planning officer and human resource representatives, out of which he selects only ten interviews that he believed were relevant to topic of his research. The author should provide more detailed criteria for choosing only ten interviews out of the original eighteen.

Thirdly, he obtained data from the organisation related to the Human resource department and analysed it to reach the conclusion. He has not mentioned what type of data he used to come to conclusions neither he has mentioned any process or methods that he used to analyse and interpret the data. There are two methods for data analysis; Computer based analysis and manual analysis (Borch & Arthur, 1995). So in this case we don’t know if he has used manual or computer based analysis or a combination of both. As some researchers use one type of methodology while some use a combination of both (Borch & Arthur, 1995).

Due to the debatable nature of Townsend’s research methods it is very difficult to find his results conclusive. However, he agrees with (Mulholland’s, 2002) which suggest that CSR’s need to show a high degree of emotional labor to the customers. Lack of proper planning and communication can be seen between the management of PowerGrid as they wasted AU$30 million in trying to implement a new software without consulting the training team leader and it turned out to be an “add on” (2007: 486). He identified that the recruitment and selection department should act like a “gate keeper” (2007: 478) in order to only let in the right candidates. He emphasized that training should focus more on emotional labour, as it is the most important aspect while communicating with the customers, rather than focusing on technical skills. Townsend fails to identify by how much the company was able to reduce the cost of turnover when they had to keep recruiting throughout the year due to employees moving into the larger organization or leaving the organization altogether.

This research provides useful information for practitioners in the call centres. However, researchers who further study, need to research in depth into industry of call centre and should specially address the limitations found in Townsend’s study.

Townsend wanted to consider the paradox of extensive recruitment and training conducted in call centres that are faced with high levels of turnover. He came to the conclusion that PowerGrid was able to reduce its cost of recruitment and training, by having internal transfers within the larger organisation. Furthermore, Townsend has been able to identify certain problems within PowerGrid. He has failed to highlight is there any difference between this call centre and other private call centres. He has advocated that there should be a great emphasis on training of emotional labour rather than technical training but he has been unable to provide any suggestion how it can be done. Finally, Non-participant job observations, interviews are types of qualitative research methods which can be called problematic because of problems with their “validity” and “reliability” (Kirk & Miller, 1986)

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