"The real issue was our ability to recruit and hire people in difficult labor markets like Tampa (Florida) and Roanoke (Virginia)," says Rob Solomon, senior vice president of customer care for HSN. "Our call-center facilities in these places were not at full capacity" because of the low unemployment rates in those cities.
The challenge in recruiting call-center staff in these markets caused a double headache for Solomon. Not only were call centers understaffed, and thus unable to handle rising call volumes, but the empty seats meant that HSN could not efficiently utilize its call-center infrastructure.
Solomon and HSN responded to this double challenge by drawing from a new labor pool: part-time, flexible workers. "We made a strategic shift in the type of people we were hiring," Solomon says. "Over a period of nine months, we made a big effort to look at our workforce diversity and move toward part-time customer service reps."
The shift solved a problem that Solomon says had been plaguing the company for years. By advertising in newspapers and on radio, HSN found plenty of qualified applicants who already had good full-time jobs but were happy to supplement their incomes with flexible part-time shifts of 10 to 25 hours per week. "We just tapped into a market that we just hadn't tapped into previously," Solomon says.
Adding part-time labor to better staff local operations and improve cost-effectiveness is just one aspect of an overall HSN strategy to maintain flexibility and diversity within its workforce. The call-volume fluctuations inherent in HSN's business—the spikes that occur when a particularly desirable product is being featured on air or a particularly popular program raises viewership—require the company to supplement its internal workforce with outsourced labor both domestically and overseas.
In the United States, HSN calls on the work-at-home agents of West Telecommunications for very targeted hourly staffing assignments. "When we get sales spikes, we can put these people on for hourly blocks as opposed to carrying them for entire shifts," Solomon says. Overseas, HSN outsources a share of its call volume to PRC in the Philippines.
Even though HSN's Tampa and Roanoke facilities operate at less than full capacity, the company continues to work with West and PRC. The diverse assortment of call-center staff—internal full-time, internal part-time, domestically outsourced and internationally outsourced—makes sense for HSN. Solomon is not interested in eliminating the internal call-center operation and moving to a completely outsourced call-center workforce.
"I don't know of any large company that would send 100 percent of its traffic offshore," Solomon says, ticking off a list of reasons why such an idea does not appeal—political ramifications, concerns about rate inflation, the waste of failing to leverage money already spent on domestic infrastructure, and worries about becoming overly dependent on an external contractor. "Offshoring is a good option, but sending 100 percent of call-traffic offshore is never an option," he says.
On the other hand, Solomon doesn't like the idea of packing internal call facilities to full capacity and reducing outsourcing contracts to minimum levels either. Call volume fluctuates from week to week and can rise dramatically during the busy fourth quarter.
If HSN completely fills its internal call centers to handle regular call volume and minimizes its relationships with its outsourcing contractors, West and PRC would likely just move on and find new clients. Then, when call volume peaks toward the end of the year, HSN could find itself scrambling to find and train a whole cadre of new contract workers to handle the overflow.
"The cost of ramping up and making up for lost knowledge would be prohibitive," Solomon says. HSN needs to give its outsourcing providers enough work during the first three quarters of the year to make sure they'll be there for Solomon with a ready and trained supplementary workforce when he needs them most.
Overall, Solomon seems happy with his current mix of call-center staff. The new part-time workforces in Tampa and Roanoke have had high turnover, but Solomon says they have been in line with expectations. The employees have also measured up in terms of performance and professionalism.
"We feel like we are in a pretty good place," Solomon says. "We're evaluating what our (staffing) mix should look like, but we don't see it looking dramatically different than it does today. We'll add a little more internally or a little more (with) providers, depending on how growth does occur."
For more, see a July 2003 article on HSN.