By Emma Price, ActiveOps
In the UK, it’s official – we are in a recession. And with that news, many organisations are scrambling to plan their responses as swiftly as possible. In new research commissioned by ActiveOps, we asked 1,000 professionals in the financial sector about their organisation’s likely responses to a recession, and published that data in a report titled Are you recession ready? How to do more with less.
From this data, we know that finance professionals think their organisation’s responses to a recession could include:
- Absorbing increased workloads with fixed staffing levels
- Reviewing processes further to find efficiencies
- Increasing use of automation and digital transformation
- Outsourcing specific operations
- Reducing operational employees through redundancies
- Retraining/cross-training operational staff to be more versatile
Obviously, organisations hope that these responses will protect the health of the business in tough times, but what does this mean for your customers? In this blog, we’re going to consider the impact these changes may have and offer some guidance on how to improve operational efficiency without sacrificing the customer experience.
Why prioritise customer experience?
Most of the conversations in your operations teams about recession planning are likely to be focused on cost-cutting, for obvious reasons. But, at the end of the day, in a recession the top line is as important as the bottom line – you need to keep revenue coming in, and that means keeping hold of your customers. Customer experience, satisfaction, and retention are directly linked: a bad experience creates an unhappy customer, and an unhappy customer is more likely to leave you.
The problem is compounded by the fact that, in a recession, your customers are likely to have even less tolerance for poor customer service than usual. John Ainsworth, one of the experts we interviewed for our report, summarised the problem: “[Customers] are likely worrying about their finances, their job security, and all the knock-on worries those bring around health, happiness and family.” When customers are in that negative space, any drop in service quality from your operations could make you unhappy enough to leave you.
“Even in a recession, it’s possible to optimise things for the customer.”
Vincent Brennan, banking industry operations leader
Because the actions that operations leaders might take in a recession will be inspired by the desire to reduce costs, it’s possible that the consequences for the customer of those changes will not have been thought through fully. We saw some of this play out during the pandemic, where brands including high street banks and insurers were lambasted by customers for confusing messaging, not having anyone available to talk to, and nonsensical processes (for instance, customers being told they had to make appointments in-branch, only to find that there was nobody in the branch who could help).
If you fail to put the customer at the heart of your decision-making, then the very actions designed to help you survive a recession may actually hinder you as customers become dissatisfied and leave.
Now, let’s dive into the detail and consider each of those responses to a recession that organisations are considering from a customer experience perspective. For each response, we’ve detailed the risk it poses, and how you can respond to protect customer experience, based on our own experiences over more than 20 years helping back office operations do more with less.
The risk: busier staff provide poorer service
Making everyone busier will likely increase lead times on various workflows and tasks, meaning the customer must wait longer to receive a service or resolve an issue. The strain of that increased workload will also make employees more stressed, making it harder for them to deal with unhappy customers or tricky problems while still providing friendly and helpful service. You may find more errors creeping into work too, requiring rework that further delay processes, or customers simply not getting the right service from you.
Your response: spread the work and watch for burnout using data
Gather productivity data to understand exactly what work each individual and each team has on. Look for opportunities for quieter teams to support busier ones, maintaining service levels without increasing lead times or pressuring staff. You can also consider additional automation to help eliminate manual tasks and reduce the chance of errors, but be careful that this doesn’t leave customers without someone to interact with. Finally, encourage managers to watch vigilantly for signs of burnout or stress in their teams – and to support those who are struggling as soon as they see something’s wrong.
The risk: processes become more efficient but less customer-friendly
Done right, it could give customers a better experience by eliminating unnecessary work and giving employees more time to focus on customers. However, if the wrong steps are cut from processes (or the wrong processes cut altogether) in order to reduce costs, there may be unintended consequences that harm the customer experience – and you probably won’t know about it until customers start complaining or leaving you.
Your response: build customer-centricity into your organisation
Ensure that any proposed changes to processes are considered from the customer’s perspective. Nominate a customer champion at C-level who will ensure that the customer experience gets attention at every level of your organisation, especially when reviewing processes. If the customer experience is at risk, are there other efficiencies you can find instead that give you the saving you need?
The risk: customers can’t solve their problems or talk to a human
As a rule, automated processes tend not to handle complex work or exceptional cases well. As customers come to you with thornier problems, automated processes may prevent your people from giving customers the right help – a “computer says no” situation that’s bound to antagonise a customer and make more work for your team. And as with the point above, any digital transformation that’s implemented without consideration of the customer experience opens you up to the risk of accidentally making things difficult for customers.
Your response: review comms and automate with care
Think very carefully about what you automate and how. And, before you invest in additional RPA or similar, consider whether there’s additional capacity in your current robots that could be utilised before you bring in more. In fact, you may have unused capacity in your human workforce which you could also unlock, which may be more effective and cheaper than investing in more automation. As with process reviews, any digital transformation project should have a customer champion whose role is to protect the customer experience as the project takes shape.
At the very least, you need to review your customer communications and the journey a customer takes through your organisation. Does it make sense, and as a customer do you feel understood and heard? If you don’t, or you have a complex challenge that you need help with, how easy is it to speak to a real person?
The risk: your partner lets you down and provides poor service
Introducing a third party into your operations always introduces the risk of miscommunication, workflow challenges, and puts the quality of your work in the hands of someone else – while costing you money. All this can lead to delays and rework that keep your customer waiting – and, if you outsource customer-facing work, your customers may get frustrated that they’re talking to someone who doesn’t know your systems and processes as well as you do.
Your response: look for extra capacity in your existing team
In most situations, keeping work in-house isn’t just better for your budget – it also gives your customers a better experience as they deal with people who know your organisation and the work involved best. If you’re outsourcing to bring in extra capacity for less than hiring new staff would cost, look for that additional capacity in your workforce first. Gather productivity data to find that capacity and build a culture of cross-team collaboration to take advantage of it.
57% of respondents believe they have spare capacity in their organisations, but they don’t know where it is or how to access it.
If you’re outsourcing as part of a wider strategy that involves redundancies, maximising the capacity of your in-house teams will still enable you to reduce the amount of outsourcing you need to keep your operations running.
Finally, if you’re outsourcing to fill a skills gap in your teams, then consider whether you can train individuals in your organisation to take on that work instead of outsourcing it. Understanding everyone’s workload and capacity will help you find opportunities to fit in the necessary training without affecting your ability to complete work.
The risk: employees are overwhelmed and demoralised, affecting service quality
Take all the challenges you get when you absorb increasing workloads with fixed staffing levels, and amplify them – because now, you’re managing increased workloads with less resource. And, of course, mandatory redundancies decimate employee morale. So, your customers are likely to find that it takes longer to get services or responses from you, and when they do talk to someone they end up dealing with a demotivated, burnt out and demoralised employee – not a recipe for a happy interaction, even in the best of times.
Your response: minimise redundancies with productivity tools, and use productivity data to handle the transition sensitively
Firstly, consider whether you can find any other cost savings that let you limit or remove the possibility of redundancy. Can you eliminate errors and rework? If you’re paying out for SLA failures regularly, can you improve processes, so you hit all your SLAs? If you’re cutting from just one area of the business, could you instead retrain those employees and move them into another department that’s overworked? If so, you could solve two problems at the same time.
If redundancies are unavoidable, then your priority needs to be protecting the morale of those who are staying, to keep them engaged and motivated. There are some levers you can pull, such as looking at voluntary redundancies first, or offering outplacement services to employees who are leaving, to help reduce the negative feeling around the change. You can also use productivity data to explain why redundancies are necessary, why you’ve made the decisions you have, and what the future for the department and the organisation is. That data-driven narrative helps people to put the change in perspective, and can make it more objective, and so protect morale.
And finally, once redundancies have taken place, it’s vital that you unlock every last bit of capacity from your remaining teams. As we’ve discussed, using productivity data to access hidden capacity in teams will help you protect service levels as much as possible with a reduced workforce.
The risk: minimal – but training can’t interfere with day-to-day operations
This response to a recession carries the least risk of harming the customer experience. By making your people more versatile, the borrowing and lending of resource we’ve already talked about is made much easier as more people can do more types of work. It’s therefore easier to clear backlogs and to handle growing work volumes, even if teams don’t grow or are cut.
That said, the retraining needs to be handled in a way that doesn’t impact customer experience – after all, you can’t just send everyone off on a training course at the same time. And, as employees start working on more varied work across teams, careful management will be needed to ensure objectives are still hit and nothing slips through the cracks.
Your response: use workload data to plan training around core tasks
Gathering productivity and performance data will help you plan upskilling activities for employees in a way that doesn’t disrupt day-to-day operations – as well as showing where those skills can be best put to use, as we’ve already discussed. Beyond that, the only thing to do is to fast-track your retraining and upskilling activities! Because of the versatility it brings to your operations and the way it helps employees feel engaged with your brand, broadening your skills pool will help you continue to offer customers a prompt and winning experience, even if your operations come under pressure.
“Downturns are an opportunity to build long-term agility and resilience in a whole new generation of leaders. Handled right, it can be a great experience for them.”
Jude Pinto, finance industry operations leader
Make data your starting point
Our survey revealed that one in four respondents either did not have the information needed to make decisions to improve productivity and performance, or didn’t know if they did. That same data and understanding of what’s happening in your operations is vital for protecting the customer experience.
The benefits of that data go even deeper, though. As we’ve discussed in other blogs, being able to see what people are working on and where capacity is in your organisation in real time will also help you to protect your employee wellbeing, and make your operations more resilient to shocks, and agile in the face of unpredictable workloads. to shocks, and agile in the face of unpredictable workloads.
So, if you can get access to this insight, you’ll find that you’re not only able to protect your bottom line in a recession – you can keep customers happy, too.