Yesterday, I saw this headline in a newspaper: “£136million spent by customers waiting to get through to HM Revenue and Customs”.
The article bemoaned the amount of time that HMRC customers were left on hold (if they got through at all), and went on to estimate that the combined cost of dialling the 0845 number plus their wasted time amounted to that humungous sum of £136,000,000.
The proposed ‘solutions’ appear to revolve around throwing more money and resources at the problem, whilst setting standards for the speed and proportion of calls answered.
This is not the answer!
Know why? Because it rests on the assumption that the current volume of calls is all value demand (i.e. the demand the system is there to deal with; demand that meets purpose from the customer’s perspective). Let’s look at some simple principles that will show HMRC and other organisations stuck in the same mindset how to save millions of pounds, whilst providing a better service.
In conventional management thinking there is an assumption that it is generally good to break up the flow of work into functional specialisms and the old back office / front office design. You know, to get an answer to your query you have to overcome various obstacles, which usually include the inevitable call centre. After negotiating your way through the labyrinthine ‘press one for this, press two for that’ phone menu, if you survive the endless recorded announcements urging you to contact the organisation by any other means than trying to speak to a human being, you eventually get through to some poor soul in a call centre.
The call centre person wants to do their best to help you, but is probably not paid very much and doesn’t have the expertise to handle much more than the most straightforward of queries. They are also usually working from a CRM screen or menu-driven prompt card. Conventional managers think this is a good idea because at face value it seems to be a relatively cheap option. Then they impose targets on the call centre workforce (e.g. answer ‘X’ percent of calls per hour, or within ‘X’ amount of seconds) because they think that is also a good idea. Of course, these tactics just lead to gaming and other types of dysfunctional behaviour that I regularly rant about, but I don’t want to digress onto that subject this time.
The problems with this system design are multifold: firstly, these automated, low-skill, one-size-fits-all mass-production models of customer interface cannot cope with the inherent variety that is present amongst incoming demand. Not everyone has a query that neatly fits the menu card. This causes the wrong forms to be sent out and people being put through to the wrong department. The call centre people are trying to help but they aren’t experts, so have to rely on the automated prompts that constrain them. Often, when the menu-driven options dry up, they will pass on the query to someone else. This causes handovers in the process, which are inherently inefficient. (And costly).
The second big problem surrounds that misguided assumption that all demand must be value demand. The predictable knee-jerk reaction of chucking more dosh at the problem and inflicting targets on the workforce is based on this erroneous assumption; worse still, it totally ignores the problem it is trying to address. Are all these calls first time enquirers? Does HMRC actually know what its demand profile is? How many times do they resolve the issue at the first point of contact?
Managers should ask ‘What is the type and frequency of predictable demand?’ Once this is understood, the system can be designed to handle the anticipated type and volume of calls. Now think about what the demand profile would look like if the service resolved the issue for the customer first time round. No call back necessary. Happy customer. Reduced demand on the telephone switchboard. What’s not to like?
This brings us to the nub of why the call centre is so unable to handle demand and why people are stuck on hold so regularly. It’s called Failure Demand. John Seddon defines failure demand as ‘demand caused by failure to do something or do something right for the customer’. So… all those calls about ‘I don’t understand the form you sent me’, ‘why have you sent me two identical letters?’, or ‘no one has gotten back to me about what’s happening with my case’, is failure demand. Whilst the call centre is dealing with someone else’s failure demand, you’re stuck on hold, and contributing to that £136,000,000.
The design of the system is responsible for this – experts postioned away from the point of transaction, ill-fitting templated responses to customer demand, handovers, departmental specialisms, and so on. And you know what, HMRC? It costs MORE. Not less. It’s not a cheaper option for you to operate this way! Furthermore, the problem of people not getting through on the phonelines or being stuck on hold having to listen to Bruno Mars is definitely not a capacity issue, so it doesn’t need money and additional resources throwing at it. A slightly larger call centre will only handle failure demand a bit faster, not fix the problem.
All HMRC has to do is take out the failure demand caused by their system design and suddenly there will be no need to spend another £34million just to try and answer 90% of calls (never mind deal with them properly). Not only will the intervention prevent this unnecessary additional spend, but it will result in a more effective system and happier customers, as well as obliterate that £136,000,000.
Happy Christmas taxpayers of the UK.
If HMRC listens to this you might have a few more pennies left for mince pies. 😉
HMRC didn’t have these problems when they had local offices which were able to deal with your call – by putting you through to the person who was dealing with your case. The person you spoke to could probably answer your question and/or assess what needed to be done, and thus resolve the enquiry more promptly. It saved your time, it saved their time. There was also a possibility if you were a regular ‘customer’ that they knew the history and details of your case.
By separating out the ‘call receipt’ element from the ‘answering your query’ element, they created two stages where previously there was just one. Worse, they have also centralised the call handling element, and made it even more remote from those who do the actual work. (I think they may have also split into ‘specialisms’, so that rather than having one team dealing with a customer, different types of enquiry have to be dealt with in different offices – although it may be DWP who’s done that). The end result is that delays go up, errors go up, the cost of handling enquiries go up, and tax income goes down. In the meantime, £millions have been paid to the consultants and IT companies who advised HMRC to change to this system and sold them the kit.
The logic is that by getting lower paid staff to handle the more mundane elements of a process (eg, answering a phone), you can free up experts to concentrate on the more difficult elements, and so reduce the number of expensive experts required. Unfortunately, all the evidence shows that this logic is wrong. Rather than save money, it actually increases costs.
It is possible to separate out more basic tasks and deal with them more cheaply, either using less-skilled staff (less pay) or automation (IT). But the knack is to make sure that the tasks they perform are ‘Clean’. That means that they arrive in a state that do not require much further work, and the key issues have already been resolved. If they arrive ‘Dirty’, then either they have to be sent back, or they have to be re-worked at point of receipt, or they end up being processed incorrectly. The net result is more work and more errors. Obvious!
Identifying the failure demand is one thing – the next stage is to work out what is causing that failure demand. Once you get past the inability to answer the volume of calls, you’ll probably get to the point that the person who receives the call is probably unable to deal with the enquiry.
I know of an organisation that has a two tier phone system. For important calls you phone a free number and for less important calls you phone the same organisation but you have to pay. The result is that people phone the important phone number with minor enquiries clogging the system or they don’t phone at all because they know their important call isn’t quite important enough for the important call system but are unwilling to pay for the other. This results in vital information not getting to the organisation that requires it.
It’s just dawned on me which organisation you are talking about. The free number starts with a ‘9’ and contains three digits, doesn’t it? Ha!
I’ve often thought that a lot of the issues with the 999 system could be solved by charging £20 to phone the number, refunded if there was an actual emergency.
I’ve recently complained to HMRC about my experiences trying to contact them and suggested they configure their call centres to deal with value demand whilst minimising waste. I am not holding my breath but I’ll let you know what they say!