OVERVIEW
CSAA is focused on responding to members’ changing needs by improving and expanding services. The goal is to increase the value of joining AAA to help sustain membership and attract new members. One means of achieving this goal is to raise the productivity and job satisfaction of customer services staff so that they can deliver a better experience to members. CSAA is also concerned with delivering its services as cost-effectively as possible.
Coleman Consulting also focused on finding ways to help CSAA reduce employee turnover. Past experience has shown that employee turnover is correlated with the amount and/or quality of training employees receive to make them productive. Another factor is employee satisfaction with their schedules. Coleman Consulting believes that to be effective the process of developing schedules must take into account the needs of employees. Finally, Coleman Consulting analyzed the “abandonment rate” of incoming calls to identify ways to reduce it. The goal of the abandoned call analysis, however, was not to merely lower the abandonment rate across the board but to focus on those areas of call centers where reducing the abandonment rate would result in significant increases in revenue.
THE RESULTS
THE CHALLENGE
CSAA was looking for ways to improve employee schedule satisfaction, provide better customer service/satisfaction/ retention, and reduce turnover. Coleman Consulting’s analysis of call center operations focused on employee turnover, rate and cost of abandoned calls, and the match between the current workforce schedule and the actual workload (call volume and call duration). Data was analyzed in one hour increments for all hours of operation in each call group for the entire year. It is commonly believed that an hour of overtime costs a company approximately 1.5 times an hour of straight time. A common mistake however is to overlook the fact that most benefits are based on a fixed cost; that is to say, those fixed-cost benefits do not increase as an employee’s weekly total hours increase from forty to forty-one. In reality, one hour of straight time is more expensive than an incremental hour of overtime. So it is actually less expensive to have an employee produce an extra hour of overtime than to hire a worker to cover the increased workload. Overstaffing also creates pockets of unnecessary idle time because more employees are required than the work to be carried out. Therefore, a key part of the solution for CSAA was to identify schedules that would better match the call center workforce to the call volumes.
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BACKGROUND
The American Automobile Association (AAA) Emergency Road Service responds to more than 29.9 million distress calls from members nationally. The AAA-Approved Auto Repair Program has evaluated and approved more than 600 auto repair facilities.
AAA Travel is also the nation’s largest leisure travel agency. At any given time, AAA members occupy a quarter of all hotel rooms nationwide. Each year, AAA tourism editors evaluate and assign ratings of 1 to 5 diamonds for nearly 30,000lodgings in the U.S., Canada, Mexico and the Caribbean. These diamond ratings are listed in the annual Tour Book® Guides. AAA is the largest travel publisher in the world, distributing millions of maps, Tour Books, and other travel publications each year. VIA, the award-winning bimonthly magazine from AAA is the 21st largest consumer magazine in the U.S., with a circulation of more than 2.5 million.
The California State Automobile Association (CSAA) provides a variety of automobile and travel related services. CSAA insures more than two million vehicles in Northern California and Nevada, with one out of every four cars on Northern California roads being insured by CSAA. CSAA is also California’s fourth-largest insurer of residential property.
CASE STUDY:
California State Auto Association
INDUSTRY: Travel/Finance
NUMBER OF EMPLOYEES: 6,000
REVENUES: $1.8 billion from insurance premiums and travel agency sales
AMERICAS HEADQUARTERS: San Francisco, CA
Coleman Consulting Group identified a total of $2.2 million in potential cost savings in four areas—rescheduling the workforce to match the call volumes, reducing turnover by 24%, reducing the cost of abandoning calls/losing customers (lost revenue), and optimizing operating hours. Central to CCG’s recommendations were abandoning the standard 8-hour shift and instead instituting 4, 5, 6, 9, or 10-hour shifts. Coleman Consulting also found that another $1 million in savings was possible through adjusting the service level agreement (SLA) for the call centers.
Coleman Consulting also developed a program to gain management and employee buy-in, making it possible for CSAA to realize the identified savings. Included in that program was a proctored survey of employees to assess their attitudes toward current schedules, ideas for changing policies or procedures they are unhappy with (e.g., attendance policy and dress code), and receptiveness to the proposed new approach to scheduling. Employees turned out to be highly receptive to CSAA’s efforts to revise schedules. Nearly 80% of those surveyed had a positive opinion of the program, and only 1% had a negative opinion. The survey also revealed a high willingness to try multiple scheduling options, allowing greater flexibility in redesigning the schedule and ensuring that CSAA could achieve most of the objectives of the call center project. Furthermore, Coleman Consulting assisted CSAA in its successful transition to AB-60, California’s “overtime over 8” labor law. CSAA’s return for this project was greater
than 7 times their investment.
IDENTIFIED COST SAVINGS
1. Match workforce to workload: $1,531,845
2. 30% reduction in turnover: $255,300
3. Cost of abandoned calls: $310,820
$2,239,057
Subtotal of opportunities
4. Optimize operating hours: $141,092
Additional opportunity:
5. Optimize SLA: $1,000,000