Let’s not beat around the bush – over the past decade, it’s been the public sector that has propped up the Australian contact centre outsourcing industry. While companies in the private sector steadily migrated their operations offshore, state and Federal Government has gone from an inhouse service delivery model to a hybrid inhouse/outsource model, partnering with expert third parties for a significant portion of work. And there are many good reasons why hundreds of millions of dollars are being spent in this way.
The public sector has traditionally been built on a permanent full-time workforce. This has made it challenging to effectively roster to the inevitable peaks and troughs of a contact centre. Government in particular is prone to announcing policies and initiatives which are either urgent or super-sensitive in nature, leaving the contact centre little time to prepare for the surge in demand that follows. This is where contact centre outsourcers offer an advantage, with their flexible workforces, including part-timers and casuals who are happy to extend their shifts or be called in as needed. Outsourcers have many clients, and they can also manage peaks in one area by pulling staff from a different account that might not be busy. This may involve an accelerated training path enabling newcomers to an account to quickly come up to speed to answer basic inquiries. More than anything, people want their calls answered in a timely fashion. The fallout of not having adequate capacity was seen with Centrelink – some of the most vulnerable people in the country were subjected to 45-minute+ wait times. After intense negative media coverage and consumer complaints, Centrelink allocated $50 million to “fill the gap” with capacity provided by outsourcers.
Outsourcers on the whole pay staff less than government employees. As wages account for around 70% of the cost of running a contact centre, this is significant. With their lower wage base, flexible workforce, and support services and technology shared across multiple clients, outsourcing is cheaper than an internal government contact centre.
Outsourcers who set up in regional areas may benefit from government subsidies linked to employment numbers, and these subsidies are reflected back in competitive pricing.
Government is constantly restructuring – departments get merged or culled, and their responsibilities change. In terms of investment (in facilities, people and technology), it is therefore riskier for a government department to set up a greenfield contact centre for 200 people when the remit a year later maybe for half that. By transferring this risk to outsourcers, the government can spend wisely and focus on policy rather than contact centre operations.
You don’t have to look far for examples of government contact centre outsourcing – at the Federal level, ATO was a pioneer of the model, then came the Department of Human Services and more recently Department of Home Affairs. In NSW, both Transport for NSW and Service NSW rely on outsourcing for answering the public’s questions about trains and motor vehicles. In Victoria, the Police recently outsourced to a provider in Ballarat. For councils around the country, after-hours answering services are the predominant call type outsourced.
At Matchboard, we predict that contact centre outsourcing in the public sector will only increase.
The Improving the Customer Experience across Government Conference, running on the 12th & 13th February 2019 in Sydney, will showcase the diverse ways in which public sector departments, agencies and local councils are setting their customer-centric service strategies, providing unique insights into the key factors for success.