Pay slowdown for call centre agents

The latest survey by Incomes Data Services of pay and conditions in call centres detects a marked slowdown in salary increases.  This exclusive article is by the authors of the report, Sarah Miller and Catherine Chubb

PAY settlements for call centre staff averaged 3.2 per cent over the last year, but growth in average salaries was the lowest in almost a decade.
Average starting salaries for all customer service grades increased by only 1.5 per cent.  The average mid-point annual salary was, at £15,000, exactly the same as 2004.  And the average maximum salary was actually slightly lower than in the previous year.
IDS has surveyed terms and conditions in call centres every year since 1997 and this is the first time that the general rate of pay improvement has been so slow in the sector.

This marked pay slowdown may be connected to the fact that turnover has also fallen -- again for the first time since our surveys began.
Average reported staff turnover across the 79 organisations who provided a figure was 22 per cent.  This is three per cent lower than last year's survey.  Reported turnover, excluding agency staff, ranged from zero in a call centre which has only been open for a year, to 89 per cent.

Average rates  Our IDS survey shows that the average starting salary for all customer adviser grades is now £13,600 a year.
Half of all starting salaries reported by respondents were £12,000-£15,000, with a median of £13,300.  Pay band maximum salaries for customer service roles ranged from £10,941-£25,192 (the latter salary maximum being for a senior account manager at a telecoms firm).
The average maximum salary was £16,700, a decrease on last year. However, this could be partly explained by differences in the survey sample.  There was a 57 per cent overlap between the 2004 and 2005 surveys.

Sector variations  The report indicates a gap of £4,200 between the average midpoint salaries in the lowest and highest paying sectors. The lowest average salaries were for call centre agents in the leisure sector -- the average was £13,100, 14.5 per cent lower than the average for all sectors.  The firms in this sector in our survey included a cinema chain, a TV company and travel companies.
Other sectors with lower than average salaries were retail with an average midpoint salary of £14,000 a year, outsourcers at £14,700 and transport at £13,500.
These are very similar to last year's survey, and reflect the predominance of high volume, lower skill roles in these call centres -- typically involving order-taking in retail call centres and ticket-selling in leisure or transport.
The highest average customer adviser salary, £17,300, was in financial services, 15 per cent higher than the overall average.

Regional differences  As we have found in previous IDS surveys, regional pay variation was much less significant than sector variation.
There was a gap of £2,500 between the average midpoint salaries for customer service advisers in the lowest and highest paying regions (see chart).  This compares with a gap of £4,200 between the lowest and highest paying sectors.

The survey found that retention pressures had eased...last year a higher proportion reported such difficulties
The lowest salaries for customer advisers were in the West Midlands (£14,800), followed by the North West (£15,200).  The highest were in London (£17,300), followed by Eastern (£16,600).

Recruitment and retention  More than three out of five organisations said they found recruitment either fairly difficult or very difficult, a similar proportion to last year.
But the survey found that retention pressures had eased with nearly three-fifths reporting difficulties with retention.  In last year's survey, a higher proportion (almost two-thirds) reported such difficulties.
This year, over two-fifths (42 per cent) of companies reported retention of staff was fairly difficult and just over one-tenth said staff retention had been very difficult, which is similar to the proportion of companies reporting recruitment as very difficult.

Sickness absence  Call centre staff take an average of 9.3 days off work each year due to sickness; the highest rates were in public services and financial services.
The public sector had a sickness absence rate of 10.7 days a year or 4.7 per cent of working time and the financial services sector reported an absence rate of 10.4 days a year or 4.6 per cent of working time.  The leisure sector had the lowest level of sickness absence at 6.2 days a year or 2.7 per cent of working time.
The average rate of absence found in our survey is higher than the 3.7 per cent (8.4 days a year) reported by the latest survey of the whole economy by the Chartered Institute of Personnel and Development.  CIPD covered 1,038 organisations across the UK, together employing over 2m people -- approximately seven per cent of the UK workforce.
Latest figures from the CBI show a sickness absence rate of 2.98 per cent or 6.8 days a year.

Figures in brackets are numbers of call centres. Note about both graphics: average salaries by sector and by region are different because the average salary for all sectors is calculated by counting each organisation once, while the average salary across regions counts each individual call centre.  For example, to help calculate average salary by region, salaries paid at the Royal Bank of Scotland will be counted 13 different times in each job role calculation, to account for each call centre.  Similarly salaries paid at Royal & Sun Alliance will be counted 9 times, to include each call centre.

Non-pay benefits  Our survey asked organisations which of a range of non-pay benefits they offered to staff.
All but three respondents offered some type of pension scheme, with 37 per cent offering a final salary pension scheme to at least some of its call centre employees.
After pension schemes, staff discounts were the most popular benefit offered.  Half of the respondents offered a staff discount as part of their benefits package and 41 per cent offered life assurance.  A third provided some form of health insurance and childcare subsidies were offered by 28 per cent.
Non-cash recognition awards were offered at almost one in 10 organisations and 29 per cent offered a subsidised gym membership or an on-site gym.
Other benefits mentioned this year included season tickets, subsided meals, travel insurance and concessions, counselling and advice, free car parking, learning and information centres and bike loans.
Some of the financial companies offered mortgage subsidies.  For example, after a qualifying period, call centre employees at the insurance company, esure, are offered mortgage schemes and personal loans. Similarly, some leisure companies offered discounts on holidays.  Both First Choice and Virgin Atlantic offer travel discounts to their call centre staff.

About the survey

Pay and Conditions in Call Centres 2005 is IDS' ninth annual survey and was conducted in the summer of 2005.
Participants totalled 102 organisations, covering more than 97,000 employees in 217 call centres across the UK.  Respondents included those in financial services (the largest sector), the public sector (second largest), telecoms and utilities, retail, not-for-profit, outsourced services, leisure and transport.
As well as an analysis of salaries for agents, team leaders and managers, the report details the size and composition of the workforce, opening hours, bonus and commission payments, premiums for overtime and shift work and additional benefits.  It also looks at staff turnover, absence and recruitment and retention issues.
The organisations featured include Royal Bank of Scotland, Lloyds TSB, Egg, Admiral Insurance, Royal Sun and Alliance, BskyB, BT, EDF Energy, Telewest Broadband, The Carphone Warehouse, Ventura, Job Centre Plus, Tesco, Virgin Atlantic Airways and the Student Loans Company. They also include 13 local authorities, one NHS Direct site, three government agencies, three housing associations and one county police service.
Pay and conditions in call centres 2005 (150pp) costs £125 for IDS members and £225 for non-members.

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PROFILES

Sarah Miller has undertaken pay and labour market analysis for more than 15 years at Incomes Data Services.  Ms Miller has co-written and edited the annual IDS research report on pay and conditions in call centres for the last eight years.  She is also the assistant editor of the fortnightly IDS Pay Report, which covers pay developments across the UK economy.

Catherine Chubb, who has worked for IDS for two years, is a researcher on the fortnightly IDS Pay Report.  Her other main responsibilities include reports on pay in the road transport and distribution sector and pay and conditions in local government.

Our exclusive article on management pay will be in the next issue of Call Centre Europe