Opinion Piece: Most contact centre operators are ahead of the labour relations act amendments

Opinion Piece: Most contact centre operators are ahead of the labour relations act amendments


While the new rights for labour broker, fixed term contract and part-time workers, contained in an expanded section (198) of the Labour Relations Act (RLA) of 2014, will force some organisations to adopt new business models, they simply confirm that treating contractors fairly is essential to the sustainability of any business.

So says Jennifer Algie, People Director at Merchants, Southern Africa’s largest business process outsourcing (BPO) and customer experience specialist.

“In the early days, the need to build contact centres fast enough to position South Africa as a contact centre destination of choice lead to operators partnering with labour brokers, or providers of temporary staff, this was a very effective way to source enough of the right people in time to compete for international and local business.

“Things have changed radically since then. The modern emphasis on the contact centre as an organisation’s vehicle for delivering a positive customer experience leaves operators with the opportunity to put their people first. If your agents are happy, your customers will be too.

Contact centre organisations are already well down the road indicated by our labour legislators. The amendments regarding the limitation of contract lengths and fair remuneration will simply accelerate the process.

“For this reason, contact centre organisations are already well down the road indicated by our labour legislators. The amendments regarding the limitation of contract lengths and fair remuneration will simply accelerate the process.”

To retain agents – or customer service representatives – who are excellent at keeping customers happy, contact centre operators already go to considerable lengths in terms of recruiting the right people and then training them appropriately. Most are now also building career progression paths for agents and have in place for those who perform well in their first six months benefits such as medical aid.

“There is frequently an overlap between the commercial necessities for business sustainability and the human rights arena,” Algie says. “In the case of contact centres, treating employees well gives them the incentive to provide the high levels of customer service that make our own clients renew their contracts.

“So, for operators to grow their businesses, treating their agents well includes converting the employer to the company from labour brokers.

Algie is confident that reputable labour brokers still have a significant contribution to make to the economy. “We scaled down our dependence on labour brokers some time ago, by bringing many of the tasks we used to outsource to them in-house. This has exposed us to additional overhead costs, in terms of hiring top recruiters and HR practitioners. But, those costs are offset by not having to pay recruitment partners and the greater tenure we achieve through employees being directly contracted to our organisation.

Whoever retains the relationship with workers, the requirement for appropriate remuneration remains the same. This does prove to be a challenge in the contact centre industry. Although agents in different centres may be seen to be doing similar work, the nature of the contact centre and the type and complexity of transaction they are required to handle makes a big difference to the skill level required.

Also, in many cases, business process outsourcers such as Merchants may take over a client’s entire contact centre, including incumbent agents.

“People who have been with such a contact centre for a number of years are likely to have better wages and benefits than people doing exactly the same job but who joined us a few months ago. We can’t deprive the older agent of his or her existing advantages and we can’t bump someone unproven in the industry up to an equivalent salary.

“Nor, indeed, does the Act require that. It simply seeks an objective assessment of the value of the work people are doing and payment to be adjusted accordingly. The legislators understand that the process in each industry will be different and will take time. However, the amendments do serve to put pressure on organisations that are being reluctant to do the right thing by their people, contractors or otherwise.

“Even for employers who want to do the right thing, the amendments mean putting some effort into rethinking their approach to remuneration. In the end, though, it’s going to ensure that the people in your organisation who give you the best return are the ones remunerated in such a way that they remain loyal and you get to retain their talent.”

While the amendments to the Act follow a global trend towards providing cover for contract or temporary workers, they also acknowledge the global trend towards more people choosing to work as contractors rather than permanent employees.

The contact centre is a case in point, with the average tenure for an agent in any job being no more than six months. It’s rare for any agent to stay more than two years.

“An agent who stays for two years represents a considerable investment by the company in training and incentives for that person,” Algie says. “The agent becomes an asset that the company wants to retain. The company also needs to recoup its investment and maintain operational continuity by moving that person into a more senior position or paying more for the same work in a different contact centre. However, many agents don’t want to stay. They like their independence and flexibility. They’re not enormously attracted by such things as medical aid or paid leave.

“As an employer, therefore, it’s important – morally and commercially – to have protection of workers’ rights in place and, at the same time, take cognisance of the needs of each individual within the context of those rights.

“The most important consequence of the amendments to the Labour Relations Act may very well be the need for your human capital management team to function in an extremely pro-active rather than a routine way. There is no business as usual.”

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