The Gig Economy – Work On-Demand
In recent years, the world has been trending toward a gig-based economic format. A gig refers to when an independent worker is hired, often through a digital marketplace, to work on a short-term project or task on-demand, such as freelancers, independent contractors, and temporary hires. These gigs are often created to meet consumer demand via the real-time delivery of services. Some well-known apps such as Fiverr, TaskRabitt, and Upwork have a large part in boosting gig work and have seen their membership explode during the COVID-19 pandemic. There is no doubt that the gig economy is growing. In fact, Everest Group estimated that U.S. gigs will surpass the permanent workforce by 2027, growing 40% by 2027 to reach 86 million.
Economic and logistical challenges have resulted in businesses turning to the gig economy to support and scale their customer service and sales efforts while lowering their fixed costs and in-house overhead. Brands and retailers have begun leveraging gig workers to ensure high-quality customer experiences while only staffing and paying for the actual work needed.
The Concept of GigCX: Freelance customer service agents
The use of gig workers in customer service – known as GigCX – is becoming increasingly common. GigCX works by sourcing freelance customer support agents to perform on a per-task basis. This gives businesses the flexibility to take on additional GigCX agents when necessary, allowing organizations to ensure top-quality service during high-volume periods.
GigCX not only benefits enterprises and retailers but the agents themselves. According to Aspect Software, while 16% of customer service agents currently work in the gig economy as “on-demand” agents, 41% of all agents and 51% of Millennial agents said they would be interested in an on-demand job in the future.
Why Customer Service is adopting the Gig Model
Business Continuity in Times of Crisis
When the pandemic hit back in March 2020, customer service operations went into crisis mode. Physical contact centers were shut down, with agents hastily transitioned to a work from home (WFH) model and field service crews immobilized, yet calls from customers for assistance skyrocketed. Harvard Business Review reported that businesses dealt with more than double the number of “difficult” customer service calls in the early days of the pandemic. Another survey corroborated these findings, with just under half (45%) of U.S. consumers saying they have required technician assistance during the COVID-19. With the pressure on, some brands caved, leaving frustrated customers on hold for hours. In times of crisis, businesses have come to realize that utilizing freelance GigCX workers can go a long way toward ensuring business continuity.
The rise of remote work
COVID-19 has ushered in a new reality for businesses. More and more companies recognize the benefits of allowing their employees to WFH, or more accurately, work from anywhere (WFA) that best suits their lifestyle. WFH employees in the U.S increased from 2% to 37% in 2020, and two out of three U.S businesses extended their remote working scheme to 2021. A survey by Aberdeen backs this up, finding that while only 14% of contact centers admitted having remote work capabilities in place before the pandemic, that number increased to 52% by June 2020. 62% plan to continue expanding their remote work capabilities well into 2021. In fact, Global Workplace Analytics estimates that 25-30% of the workforce will be working from home multiple days a week by the end of 2021. This rise of the remote working model is here to stay and has paved the way for customer service to adopt the gig economy.
Inefficiencies in the traditional Call Center Model
In a traditional call center, agents are occupied only up to 60% of their shift time, a number known as agent utilization rate. This is a key KPI that measures the percentage of the day that agents are engaged in active work. It excludes idle or non-billable time spent filling out paperwork or completing other administrative tasks – basically any time not spent directly involved in servicing a customer. With fluctuating call volumes and a lower agent utilization rate, it is common practice to over-staff a shift to ensure all bases are covered, making the traditional call center model extremely inefficient. However, customer service models are changing, especially with digital marketplaces such as Upwork and Fiverr providing innovative work opportunities for freelancers. Leveraging freelance customer service workers is an efficient way to ensure that fluctuating call volumes can be met by scaling customer service staff according to need.
With days filled with frustrated customers, confined to a cubicle, and often on a low pay scale, some agents will inevitably experience burnout. In fact, customer service turnover in the U.S is estimated to be between 30% and 45% – more than double the average for other sectors. Businesses recognize that alleviating their burden by leveraging freelance customer service workers during peak times can reduce pressure on full-time contact center staff, improving their engagement and motivation. GigCX agents benefit from managing their own schedules and working from the comfort of their homes. The flexibility it affords is unprecedented as freelance agents can choose to work for multiple companies, take on a side job, or only be available on weekends.
The evolving role of AI
As artificial intelligence (AI) advances, it now plays an increasingly important role in the basic fabric of many gig platforms. Not only does the technology drive recommendations based on historical activity and purchases, but AI can be leveraged to build customer review and rating mechanisms that drive further sales. Businesses have recognized the possibility of using this same technology in the customer service function. AI can detect low-value customer inquiries and direct those to GigCX staff, leaving the higher value inquiries for full-time agents with more expertise. AI-based routing can pass a customer’s inquiry to the best possible agent based on skills and expertise. It can also serve a role in intelligent quality assurance, ensuring that the customer service gig worker is providing the levels of service expected by the business. The gig platform’s AI can learn from these gig workers’ answers, helping the AI engine become smarter over time. Freelance customer service workers appreciate the technology, with on-demand agents ranking their employers higher than the average customer service agent when it comes to the quality and capabilities of the software they use to service their customers and contact their employers.
Benefits of transitioning customer service to the gig economy
Scale customer service operations rapidly in line with business needs
While companies may need to relinquish a measure of control, the gig economy provides the flexibility many companies need for scaling up or down depending on business needs. Unplanned spikes in customer requests can result from a crisis, unexpected press or something else, leaving the nosiness under-staffed. Tapping into the gig economy opens up a wider pool of resources that can be onboarded to deal with peaks in demand. It also provides businesses with access to skill sets that may be unwilling or unable to commute to a physical call center.
Gain real-world recommendations that impact customers
A gig model allows brands to crowd-source customer service agents from among their own customers. Often, these crowd-sourced agents are knowledgeable and passionate (and loyal!) about the brand’s products or services, making the onboarding process quick and easy, and reducing recruitment costs. When brand advocates serve as your customer service agents, their impact can be felt beyond basic questions and answers. When ‘objective’ past customers give reviews and recommendations, their opinions are heavily weighted and can drive new customer acquisition and retention. Gartner estimates that by 2022, 90% of customers will seek issue resolution from individuals outside of the company, mainly using generic how-to user guides created by freelance customer service experts.
Optimize the cost to serve customers
Staffing is the highest operational cost in any contact center. Tapping into the gig economy allows businesses to eliminate the wastage common in the standard customer service operating model. Hiring freelance customer service agencts who work from home enables contact centers to save resources in physical office space, overhead fees, recruitment costs, employee benefits, and training costs. GigCX also allows organizations access to experts who may be too high-priced to maintain on regular staff. In some cases, successful GigCX models have proven to reduce the cost-to-serve by 50%.
Provide follow-the-Sun coverage
With customers increasingly expecting service on-demand, traditional 9-to-5 contact centers cannot possibly meet this need. A gig workforce located in every corner of the world can cover customer service requests 24/7. Even local customer service agents can fill the gaps, as people may choose the gig way of working because they prefer to be on-call off-hours or weekends.
Promote diversity in company culture
The importance of diversity and inclusion in the workplace has been increasingly recognized and embraced of late. 60% of CX leaders interviewed stated their top reason for leveraging a gig model was the need to source talent aligned to company values and culture. The GigCX model enables companies to advance diversity as a strategy and ensure the representation of diverse talent by recruiting experts based only on their skills.
Will freelance customer service become the norm?
The growth of the on-demand economy means more and more people are choosing the work they do and when they do it. Companies are increasingly recognizing the importance of adopting an agile customer service strategy for real-time support. This resource availability, coupled with the digitalization of customer service, all indicate that the time is ripe for the GigCX model to be adopted at a quicker pace. Davies Consulting underscores this sentiment with its research indicating that 80% of organizations agreed that 20-50% of customer service will be made up of freelance customer service experts by 2025. Is your organization on board?
This article was first published on the TechSee blog.