The Tech Paradox: More Automation, More Call Centers

July 12, 2023
More Automation, More Call Centers

The Inception of Call Centers and the Rise of Tech

Contact center roles' are not on the verge of extinction, rather, they are set for a marked expansion over the next half-decade. Considering the state of technology, the failure of the industry to adopt previous technology, and the value that can be created for customers through meaningful interactions - you can confidently assume –  'contact center roles' will witness substantial growth over the next five years. Not just outsourcing, total contact center workforces will grow globally.

Contact centers have long been the backbone of many companies' operations beyond customer service, digitization is only expanding the influence and value these roles play in each company's strategy. They've been a mainstay since the 1960s, ushering in an era of increased accessibility to customer care and order management. But since their inception, these centers have been targets of an ever-evolving range of technologies intended to automate and optimize their functionality. The prevailing notion? Technology would eventually replace the human element in customer service. The reality? Quite the opposite.

With each wave of technology meant to streamline and automate, we observed an interesting phenomenon - call centers didn't shrink; they grew. The introduction of each new technology created new complexities and more demand for human interaction. As customers adopted more connected devices and subscribed to more services, the volume and complexity of inquiries grew. The age of social media further amplified this demand, requiring moderation and interaction on a scale never before seen. I referenced in my GigCX article the appetite that AI companies have for data labeling and RHFL models. Companies like these have raised over $100B in the last 6-months and their appetite for a human workforce is growing. Last year Open.AI only had to build ChatGPT, now they have a freemium model, paid subscriptions, and a growing list of enterprise services - do those customers need support?

For this prediction the term ‘contact center roles’ encompass traditional customer service, sales, and technical support, as well as rising sectors such as social moderation, data-annotation, and e-commerce services like product listing and order processing. While it's true that an in-depth look at certain industry verticals might reveal a less optimistic outlook, other growing areas could suggest exponential growth. The bottom line is, despite some roles potentially contracting, many more are poised to expand, leading to overall substantial growth in 'contact center roles'.

Yes! AI (and other digitization) will reduce contacts

There's no denying that automation, digitalization, and AI will streamline operations and reduce contacts for many businesses, particularly those large enterprises grappling with inefficiency. This trend often leads to a decrease in 'contacts per product' or 'contacts per service in operation.' Some types of interactions will certainly reduce vs overall. However, this doesn't spell the end of the road for contact center roles. On the contrary, as we see a reduction in 'failure demand' - the need for customer contact arising from an issue or problem - there emerges a heightened appetite for 'value demand'. This is the type of customer contact where organizations can add value, provide a superior customer experience, and differentiate themselves from the competition. And it is in fulfilling this 'value demand' that the exponential future growth of contact center roles lies.

The Complexity of Modern Consumerism, Growth in Need

Demand is increasing. It's not a stretch to suggest most consumers could read this entire article faster than they could individually list and log into all their different subscription services. Every day a new value-added product is being launched that requires high-touch interactions to succeed. Consider the transition from traditional cable TV to online streaming platforms. In the past, a single provider would bundle dozens of channels together. Today, each of those channels has potentially evolved into a unique subscription service. We've swapped one cable bill for Netflix, Hulu, Disney+, HBO Max, Amazon Prime, and a continually growing list of others. Each new service not only demands a separate subscription but also introduces its unique interface, payment system, and customer service - vastly multiplying the points of potential customer interaction for both failure and value demand.

In another example of the growing appetite for human contact, after a race to the bottom in the hospitality industry, travel groups are making experiences and services the difference between them and the aggregated hotel and transportation giants. Companies like The Pursuit Collective, are investing heavily in human interaction from first touching their website to during their adventure to post-check-out. I could add another 10 examples and everyone reading has other services they pay for or have contacted that I have never heard of, but are adding value to their targeted customer base.

Consequently, sectors that previously outsourced customer interactions to cut costs and had quadruple-digit headcount reduction goals, such as healthcare or the financial industry, are now finding ways to reinvest digitization savings into human experiences and more human talent. They're recognizing the value of direct, meaningful interactions with their consumers, driving the demand for contact center roles even further. We're living in the era of 'value demand', and it's transforming the face of contact centers.

The Evolution of Contact Centers, Simple Math

When we look at the data from the US Bureau of Labor Statistics, a surprising pattern shows up: with every big technological improvement meant to automate customer service, the industry didn't shrink as you'd expect - it grew. This is the paradox that overly zealous AI advocates are failing to account for. The real-world application of technology is never as simple as the spreadsheet computes and the customers that represent the numbers in those spreadsheets continue to value humans more than 1’s and 0’s can understand.  

  • Late 1990s - Early 2000s: Introduction of Interactive Voice Response (IVR) systems. Instead of shrinking the industry, the number of customer service representatives in the U.S. grew by approximately 19% from 1999 to 2005.
  • Mid 2000s: Rollout of web self-service options. Despite the added automation, the number of customer service representatives increased by around 21% from 2006 to 2010.
  • Mid 2010s: Advent of mobile apps for customer service. Instead of replacing human agents, the number of customer service representatives rose by approximately 17% from 2010 to 2016.
  • Late 2010s: Deployment of Robotic Process Automation (RPA) and AI-powered chatbots. While entire departments were scaled back or repurposed, the overall number of customer service roles still grew close to 8% as more consumer demand for value increased.

In each phase, we observe a counter-intuitive pattern: the adoption of automation technologies doesn't contract the industry; instead, it fuels its expansion. Even this limited US-based dataset  (all while offshoring more work than any other nation) still shows steady growth in the very narrow definition of customer service roles. My prediction expands to include global contact center roles and will outpace the attached graphical visual.

AI won't replace you, a Human with AI will replace you

I won’t dive into the application theory of the statement "AI won't replace you, a human with AI will replace you." Instead of elaborating, I'll illustrate this truth using real-world examples decades in the making.

Teleperformance and Concentrix stand as ideal adopters of this statement - as much as any large enterprise could I suppose. Both have ascended to leaders of the BPO industry, leveraging the power of digital transformation and automation to augment their human capital, not replace it. While Teleperformance has mostly pursued in-house development and Concentrix has taken the acquisition route, their market dominance is partly attributed to their strategic investment in tech-human integration. My time with Teleperformance informed the opinion that their competitive edge is using technology to augment, not replace, human interaction. Telus International is another player making gains. As they climb up the BPO leadership ladder, they've made significant investments in technology, including a $1.2 billion acquisition of an AI firm while never wavering from their people-first culture.

Then there are IT powerhouses like Accenture and Tata Consultancy Services (TCS), who have leveraged technology to venture into the BPO space. Today, they are vying for leadership positions by providing automated solutions that enhance, rather than eliminate, human engagement. Originally positioning ‘contact center’ services as a ‘low-value’ client-required offering, Accenture has adjusted its future outlook making humans and contact center roles a core value-add in the transformation journey for companies.  

While money isn’t everything, the market leaders are investing and the message they are forecasting is a human-tech integrated value experience. For example, Accenture's $3 billion investment in AI and Teleperformance's $185 million investment with Azure focused on AI.  For smaller players without billion-dollar budgets, focusing on AI integration can still yield results. As evidenced by "Agents Only", a company built on leveraging AI without any legacy limitations. Our focus, driven by a necessity to replace control of the frontline with influence and enablement, has turned into a potent competitive advantage. In the age of AI, it isn't the strongest that survive, nor the most intelligent, but those who can best manage change. And that change is about enabling humans with AI.

Don’t believe the Hype! Plan your human talent value expansion

The narrative surrounding the future of contact centers isn't about the demise of human roles but their redefinition and expansion, fueled by technology. Ignore the hype and plan for your human talent's value expansion. The future will be rich with contact center roles thriving on human-tech collaborations. Each technological advancement redefines 'value demand', leading to more, not fewer, interactions. Yes, failure demand will reduce through digitization and smarter products. Everyone will save, but the companies that win will repurpose the cost center to grow value underpinned by tech-enabled human interaction.  Utilizing platforms such as Agents Only will give companies access to top-level talent and the technology to enable them while providing a flexible human-talent roadmap as technology improves.

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