The Cost of Living Crisis – Part 2

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There is so much concern amongst both front-line staff, managers, and all our customers, about the rising cost of living, and the increasing difficulties of making ends meet.

In the second part of this Editorial series, we continue to explore what this means for the contact centre and customer service sector, both for the customers and our people, the effect it is having, and will continue to have, on our People and Customers, and what can Employers do to support, with a range of views from those running operations, and those supporting people and vulnerable customers.

What impact is this having on front line staff?

“In my view, over the coming months perhaps the biggest impact on the industry will be on colleague morale”, say William Carson, Director of Market Engagement at Ascensos.

“Debt can be a very real and emotional burden on people with a direct impact on their physical and mental wellbeing. That in turn has a direct impact on ‘the best you’ that people bring to their work, whether working from home or on site.

“But why am I focusing on debt in the context of the ongoing rise in the cost of living? According to The Week, people in the UK borrowed £1.5bn on credit cards in February of this year, the highest monthly amount since records began. The Office for National Statistics found that 12% of respondents were using credit cards more than usual to cope with increased prices in the first half of March. With inflation at a 30-year high, some believe it is a sign of consumers “falling into debt to maintain their standard of living” according to the FT, at a time when for many, real disposable income is declining sharply. Charities too are concerned that more people will be pushed to credit to cover rising bills, which could be storing up problems further down the line when repayments are due.

In a people industry like ours, we know this is just one of several areas related to the cost of living crisis that has the potential to negatively impact our front-line staff.”

“It has been all over the media in the last few months about the cost-of-living crisis that we find ourselves in today. I have seen report after report of families struggling to survive, the impact is significant, and we cannot just sit back as business owners or leaders and not respond. This crisis is not just an economical one it is also a massive health crisis”. Says Claire Bennett, Director of Hornbeam Workplace Wellbeing.

“The impact of living costs rising is affecting our mental health, our physically health and our social wellbeing. These 3 key pillars of our overall health are intertwined, our physical health is impacted in highly stressful situations as our immune system depletes and digestive system slow down. The longer it continues the worse the physical impact is and the more it will begin to affect our social relationships and therefore our feeling of self-worth. It is a vicious cycle if we don’t put things in place to help and relieve pressure where we can.

In the workplace, especially in those customer facing roles we have a lot more to think about. 

Firstly, our employee’s welfare due to their own personal circumstances is being impacted which may lead to a decrease in productivity, increase in absenteeism and presenteeism which are already a massive financial burden to UK businesses”. 

How can they be best supported? What do managers and leaders need to do differently?

“Our employees may be dealing with very difficult complaints or demands from customers. Dealing highly emotive conversations and may need to increase their conflict resolution skills, whilst also managing everything else that is happening for them personally.” says Claire.

So, what can businesses do? Well, there isn’t a magic wand that is going to make this easier, but there are some things we can do. How businesses react in this current situation can make or break their businesses and reputations for both employees and customers. 

Employee assistant programs (EAP) can make a huge difference to your organisation. Many come as standard with financial advice as well as access to counselling services. Other health benefits around nutrition advice and health support are also available via many of these schemes. The biggest challenge in the work environment is awareness of what’s on offer. Services of EAP should be promoted within, line managers should be trained on how to signpost staff to support services and encourage people to reach out for help. 

If EAP isn’t an option, then look for local services in the area such as charities, helplines or citizen’s advice for example. Make a list of where people can access support and have it visible for signposting purposes for all employees.

Training of staff to better manage this stressful environment. Conflict resolution training for front line staff to mitigate as much as possible the increase in stress of those dealing with complaints or emotional customer contacts. Training for line managers to have mental health discussions to catch early warning signs of poor mental health and get support before the impact becomes more severe. Make sure your stress policy and risks assessments, which are legal requirements, are up to date and reviewed put in place and mitigating actions as a priority. The working environment, making sure employees have access to refreshments, ability to stand, do some desk exercises, making sure breaks are taken and that there are comfortable places for people to spend their breaks to that have a chance to recharge. All of which help to effectively manage periods of high stress.

If we can ensure that our employees are trained and equipped to best serve our customers and show empathy and understanding to their challenges, we could make a huge impact.“

“Great leaders and managers in customer contact are always focused on their core asset – people. By listening to staff concerns, acting on them and anticipating solutions that will delight their colleagues, a great deal can be achieved in employee retention and creating an effective and positive, performance-led culture. At Ascensos, we run ESAT every week and during 2020 we learned how much staff were missing their onsite conversations and about their key concerns during lockdown” says William.

“One of the areas colleagues were concerned about most included financial advice. We have addressed this through an online solution that provides budgeting tips and ideas as well as a discount scheme with major brands – every little helps as they say – but now more than ever, colleagues will need to know they can reach out in confidence – and confidentially – to their welfare teams for support.

Leadership needs to ensure these areas of the business are well supported, resourced and funded and (critically) empowered to deliver resolutions for employees.” 

What impact, if any, will this have on turnover and recruitment?

William “As well as creating low morale generally, the cost of living challenge could mean people may be less likely to risk a job move, thereby stagnating the market. However, during the national lockdowns of 2020/21, there was of course much less movement in the job market and turnover reduced considerably while WFH offered opportunities to new labour pools that would have otherwise worked in other sectors like hospitality, travel or retail. If, as a result of customers’ budget concerns, brands in those verticals aren’t seeing growth or indeed are contracting, that may stimulate interest in onsite, WFH and GigCX roles in customer management.” says William.

According to Reuters, UK consumer confidence dropped to its second lowest reading in April since records began. This could mean that roles in those natural job-market competitors to our industry will be fewer.”

Will there be an increase in rates of pay, or other benefits to support staff?

William “The rates of pay in our industry were well overdue an overhaul and 20/21 shone a light on this. Last year Red Recruitment did an extensive summary on the average salary starting point for an advisor and reported that this has already now risen to between £21k and £23k p.a. with some paying up to £25k. With recent rises in NI contributions and minimum wage, the industry as a whole is probably in a better place than it has been for some years as an attractive career entry role or back to work opportunity for some. 

Those businesses that are choosing not to address this are possibly the type of company that don’t address employee engagement initiatives more broadly. Such companies will always struggle with attracting and retaining good staff.” says William.

“All companies should be reviewing their retention and recruitment strategies, but a price war is not the answer, as people may move to other companies to get higher pay, however whether they are happy in the new company is another matter, this is where you see people joining other companies, and then moving on in a short length of time. Old saying “the grass is always greener,” sometimes it works, however for salary wise, that is not normally the case. Make a choice of moving to another company based on type of company and their values and not just the pound sign.” says Marianne Withers, CEO of The Verity Centre

“There is quite a bit of talk about toxic environments around at present, it seems to be a growing trend that there are a lot of people who are making decisions based on their mental health and not always their pockets. Therefore, instead of getting caught up in the only thing to do is increase salary to attract people, which may not financially be sustainable for your company. Spend time on reviewing what your staff need, how you should support your staff, how your managers are leading, how you are leading – review the environment, evaluate all information, and make an informed decision on how to support your staff being happy and wanting to stay with your organisation. “

How do we support front line staff when it comes to aggressive customers?

“It’s a good point”, says William. “Customers too will be feeling vulnerable to the cost of living crisis and will be getting into debt to maintain monthly spending habits. This can create problems when payments are due or already in arrears.” 

“During the national lockdowns many of us took up and enjoyed multiple monthly subscriptions to streaming media providers and shopping services like Gusto. When faced with the increases in regular monthly bills like gas and electric, many will be seeking ways to reduce these, and customers may find they are tied into contracts that last 24 or 36 months leading to frustration and even anger when the penny drops. 

As ever, regardless of the wider economic context, providing colleagues with the right skills, knowledge and tools will go a very long way to empowering them to address aggressive customers effectively.“

“This is definitely on the increase” says Marianne. “I remember when I worked in housing on the front line, and it was about 5% of the people that came in or contacted us. I still know people in that industry, and keep abreast of what is happening, and they are saying it is now at least 40%. 

If this is also what is happening across the service industry, then our front-line staff, need a lot more support, development, and coaching to be able to handle this daily. What we now must be looking at, is not just the vulnerability of the people contacting our centres, but the vulnerability of our staff. 

Therefore, the education, development, coaching, and nurturing has to be at the main core of how you support your people on the front line, educate them how to handle other people’s vulnerability and distress as well as their own.”

“Signposting can be beneficial for customers, if possible, can your business offer advice and support? says Claire. “If that isn’t possible again use of national helplines and understanding what some other financial services such as banks and citizen’s advice are offering can be a great way to effectively signpost customers to options of help.

There is a question however about how to effectively signpost without someone feeling that they are being past from pillar to post. A clear pathway should be created with clear contact information and where possible, identifying business partnerships to make the transfer ‘warm’ keeping the customer at the centre.

The same can be said for employee signposting, I truly believe that everyone wants support. However sometimes we put up barriers because we are overwhelmed or scared. So, to affectively signpost we need to understand those barriers and help to remove them. All of this can be achieved with training, clear policies and ways of working and good two-way communication.” 

How do we support front line staff with vulnerable or distressed customers?

“We need to consider our customers, what are they going through, how are they coping? They will be under similar pressures to our workforces. So, the impact is vast, customer satisfaction may be impacted and, in some cases, not because of dissatisfaction with the company but other stress factors.” says Claire.

We may need to step up safeguarding for vulnerable customers. Interactions with customers may be far more complex and therefore more time consuming. Which in any contact centre or customer service role has an impact. These considerations when looking and performance and KPI’s may need to be factored into reviews and communication”

“In the current climate, brands may find that the number of customers that they would register as ‘vulnerable’ will increase, and certainly the number of distressed customers will too as the year progresses and cost of living increases begin to bite. However, customer management and services providers, inhouse and partners, should always have the right approach and supporting functions and mindset in their business to manage worried customers effectively, with empathy and consideration.” says William.

“We should be understanding and appreciating that everyone is an individual, we as people are very different, with our thoughts, likes opinions and demographics, therefore there should be a different approach to each person.

However, this should not be mixed up with treating customers fairly. TCF is the compliant part, that is about ensuring that every person is treated fairly, however dealing with people differently according to them as a person is completely separate, you still have to stay within TCF, but what you are doing is having an individual conversation with a person and understanding how they feel, I thought that is what customer experience is all about. 

Once again this is about education, development, coaching and nurturing. Sorry to be reiterating, however to me it is quite simple, it is leadership and about your values and culture and developing your people to be part of that. Develop them to aspire to be excellent and be the best.” says Marianne.

How do businesses continue to provide effective service to customers during such challenging times?

“Customer insight is key” says William. “Often seen as the tool to leverage increased customer value and associated brand growth, it is also fundamental to identifying trends in customer behaviour.” 

“Capturing customer tone of voice is already recognised as a core component of continuous improvement and that will become critical to customer retention as energy bills impact on consumer spending and customers adjustments to their budgets as disposable income reduces.

Right now brands should be designing  their ‘save customer’ offerings and marketing strategies and ensuring that frontline staff are trained and have the right knowledge, tools and the empowerment they need to support and serve customers accordingly, and  ensure the right functions and resources are available to manage the training, knowledge and communication skills necessary to support worried customers underpinned with the right tools and systems to drive continuous improvement in this critical area of customer care.”

What does the immediate future hold?

William concludes “We need to be prepared for an autumn and winter of challenges, whether or not they will subsequently transpire. Not only will customers have had to get used to months of significant hikes in energy bills, these are expected to rise again by at least as much in October. At the same time, the impact of the war in Ukraine will have knock on effects on global food security that might not hit the UK directly but may increase the price of some food products indirectly. 

Brexit too continues to hang over product availability which in turn reduces customer choice and how far budgets will stretch. All of these developments will continue to press on the cost of living bruise through 2022 and into 2023.”

Thank you to our editorial contributors:

William Carson, Director of Market Engagement at Acensos (www.ascensos.com)

Claire Bennett, Director of Hornbeam Workplace Wellbeing (www.hornbeamtraining.co.uk)

Marianne Withers, CEO of The Verity Centre (www.tvc15.co.uk)

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