We're currently interviewing for a new sales executive here at Rethink Staffing. At first, I thought I wanted someone directly from the BPO industry, who worked for a competitor, figuring that experience and contacts would be a great place to start as we try and grow Rethink Staffing. In talking to a few candidates, they kept saying something that, for whatever reason, really got under my skin. Every time we talked about their past successes, I kept hearing how many “seats” they sold here, or how many “seats” they were responsible for managing there, or how many total “seats” they had at their organization. You know what I mean, and you've probably spoke this way it yourself, at times. But as I was listening, there was something about referring to the “seats” themselves, instead of the people sitting in those seats, that really started to grate on me. When I talk about size, I talk about how many “people” we have, instead of the number of seats. When people ask me about “seats,” my brain hears “facilities capacity,” instead of people capacity. Most importantly, I think this “seats” language symbolizes one of the fundamental disconnects in the BPO industry, and it sums up quite well what is broken—especially in relation to how it views its people. The industry is talking quite a bit about employee engagement and how to motivate people. Managers lament high attrition, absenteeism, and low engagement. We try and “gamify” work, create “recognitions” systems, and ultimately try and “support” and “hear” our people. But what, if we, as managers and leaders, are sowing the seeds of poor engagement right from the start? In the way we talk about our businesses and in the way, we write our contracts with our clients?
Fundamentally, the quality and results we get from our operations are not from the “seats” that we have, but from the actual people that do the work in those seats—the “humans of BPO.” I worry that this “seats” language is setting us up to fail. But where did it come from? Many large-scale offshore BPO contracts are structured according to the number of “seats” that the client is “renting” from the BPO supplier. In a contact center environment, that seat is maybe filled 8 hours a day, or it may be filled 24 hours a day. The supplier doesn't care if the seat is filled or not - the client is paying to rent that seat; the supplier makes their money either way. Contracting for outsourced services this way made a lot of sense, in the beginning of the industry. Facilities and infrastructure costs were sky-high in the developing world, and redundancy after redundancy was needed to ensure continuous operations. So, it was natural that BPO leaders were focused on the cost of their physical operations, which were expensive, and not so much on the costs of their human operations, which were cheap (and why we all went to the developing world in the first place). They priced their contracts that way—because that reflected their thinking.
In some cases, this went to the extreme. I know of contracts written such that the cost of the seat is the bulk of the cost of the contract, and the people get billed at cost on top of it. Meaning, the supplier adds no margin to what it costs to employ the human— the supplier doesn't see value from the people (or else they would add margin there). Yes, you read that right. The supplier's profit is locked into the seat, and not whether there's actually a human in that seat. Literally, the person is an added cost to the seat, not that the seat is there to facilitate quality work, getting done by the person, in that seat. Which leads me to this conclusion: I think there's a fair argument to be made that contracts like this, makes most BPO suppliers real-estate companies, not peoplecompanies. It also prevents BPO leaders from designing employee engagement and quality work into the contract from the start. If I'm right, this means that the economic structure outlined in contracts between the BPO company and their client are completely misaligned for the production of quality work and engaged employees. This arrangement and others like it, has set the industry up to fail—and fail we have. Our failures are well known: High daily absenteeism, attrition, to-the-minimums productivity, poor quality of work, and a nasty backlash in the press to boot. All because the BPO supplier prioritizes facilities cost optimization and has convinced their client that this is the way to go. And then there'sthe human cost.
I know it seems silly, but this one thing, this one change in language (and eventually a change in our thinking and then our contracts) could change so much in our industry. We all want engaged employees who take ownership of their work, but are we taking a hard look at how the economics we are creating for ourselves, our clients, and our employees may be hindering the raison d'etre for our businesses' existence? Yes, you need engaged employees, but isn't it bigger than that? At Rethink Staffing, we will only sign hourly labor contracts, or per-piece work contracts. We never charge for facilities or equipment. Why? We don't want ourselves or our customers distracted with any economic issues that aren't related to the people or the work to be done. We give our front-line managers and our Agents the economic structure they need to pursue peak performance, and to create work and career ownership. Regarding employees in our entry-level data entry jobs, I want those people to come to work for more than just the paycheck - that's my goal. Ultimately, your clients hire you to get performance out of people at scale. How should you do it? You do it by treating them like humans, not like “resources” that are there to fill the all-mighty seat.
In reality, I'm not proposing anything new. I call it “the golden rule of economics.” If you treat someone else's economics as you would want them to treat your economics, both of your economics shall improve. (Ok, maybe this is the golden rule of microeconomics, to get technical.) Coincidentally right now, we're interviewing multi-site operations directors for one of our largest customers. Two of our candidates are touting how they achieved reduced attrition before they took over the account (they think it's a selling point because of how bad attrition is throughout the industry). How did they do it? When asked, they both said they started treating people better and asked them what was wrong—and then tried to fix it. It doesn't take much. I've just read Muhammad Yunus' latest book called A World of Three Zeros. Yunus makes the point, as he discusses how to reduce global youth unemployment, by saying that humans will and always yearn to be productive, creative, and to grow throughout their lives. Even if you're a manager of a BPO with low employee engagement, and bad KPI's, take Yunus' advice: you can still produce better quality for your client simply by changing your attitude first. Just start treating the “resources” like humans, and less like seat-fillers. Then sit back and watch your KPIs improve.