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VirWo, Inc.: Boomers Stabilize the Workforce, Boost Productivity

Six years ago, VirWo, Inc., a business process outsourcer based in Kansas City, MO, faced staff turnover rates of 25% per year and the company was spending close to $90,000 a year in recruitment and training to keep fully staffed. The turnover rate also affected its efficiency as an operator of contract call center activities, back-office, outbound CRM, customer interaction, forms processing, and web-based information solutions for clients in the insurance, health care, and financial industries, and in the CRM business.

It was Michael Amigoni, Chief Operating Officer for VirWo, who made the decision to turn the business virtual in 1997, but it took some five years to make it happen. Amigoni, who manages operations and information technology at VirWo's Contact Center, developed the model that allows some 90 teleworkers to remain offsite, working from their homes.

Several circumstances convinced Amigoni that going virtual was worthwhile. While high turnover is a fact of life in many traditional call center businesses, Amigoni faced a unique problem in recruiting: Kansas City hosts some 90 call centers, so the applicant pool was shallow. VirWo did not want to move to a larger facility, which it couldn’t afford, to accommodate more staff, which is needed. Amigoni told Network World Fusion, an online news site, that VirWo was already paying about $500,000 per year in facilities costs and about $5,000 per employee.

Once he saw the potential for both cost savings and improved client services that going virtual offered, Amigoni upgraded the technology VirWo needed onsite to hire virtual workers, then set about recruiting. His target: Baby Boomers. Amigoni says he recognized that the number of workers born between 1950 and 1963 was more than twice the number born after 1973, and it made sense to him to go after the larger potential pool of workers.

“Boomers are mature, experienced, and comfortable making decisions on the phone,” says Amigoni when asked about the advantages of hiring older workers. “VirWo has clients in the insurance and financial services sectors, and a lot of the people we talk to are older. It helps,” he says, “that the people making the calls on financial services products are older, because they are in similar circumstances to the customers.” Younger, entry-level workers cannot make the connection as easily, he says.

For insurance companies, Amigoni says, a lot of the work VirWo does is underwriting, which involves asking questions about health, among other things. Again, it helps to have older workers who are facing some of the same health issues – their own or perhaps their parents’ – as the customers are.

VirWo’s at-home call center staff are 90-95% female, says Amigoni. Most are either empty-nesters or have older children who do not need transportation to and from school, so they are ideal for the call center work. But, he notes, VirWo at-home staff set their own hours; if someone needs to pick up a child at 3:00 p.m., for example, they just log off and then log back on later in the day. In fact, the slack time for this work is usually in the afternoons, so it is not a problem for staff to be offline then, he says.

VirWo saves money versus bricks-and-mortar call centers who have staff onsite through the slack time in order to have them available for the peak times, Amigoni says. And most people do not want to leave the bricks-and-mortar facilities for two hours when work is slow just to turn around and drive back two or three hours later for peak-time calling. Overall, VirWo staff can match their work hours to business needs better because they work at-home, he says.

Amigoni calculates annual savings from going virtual at $1 million. “Savings come from reduced turnover [down from 25% annually to 7%] and from increased productivity,” he says, as well as from not having to enlarge the home facility’s footprint to accommodate the growing call center staff.

VirWo’s productivity is up 15% since going virtual, he says, with some improvement coming from using more seasoned staff, who are better at their jobs because they are experienced. There is still a lot of empty space, he says, in the facility VirWo leases; that facility is still used for training and, more recently, VirWo began using it for storage of fulfillment materials, primarily paper forms. Amigoni says he expects VirWo to save even more as the company grows, simply from not having to spend any more on space for new staff.

At-home call center staff do have to buy their own equipment, but what they need is pretty standard and most people already own everything they use, says Amigoni: a phone line, Internet connection (most have either cable or DSL), and a decent PC, which now are very low-priced. Amigoni told Network World Fusion that the company saves $500,000 in facilities costs from not having to buy equipment. Some workers also have cell phones, but apparently do not need them for VirWo work. VirWo actually lets at-home workers call spouses using VirWo’s central telecom equipment, he says, which makes it possible to avoid having a second phone line or call waiting, which VirWo does not allow on the business line. VirWo provides headsets and amplifier boxes to every employee, which Amigoni says run the company about $200 per worker.

All at-home call center workers are employees, not independent contractors; about 40 are full time and 60 part time. All full-time workers receive health benefits and have a 401(k) option as well, Amigoni said.

Amigoni told Network World Fusion that, even though VirWo has shown impressive improvement in productivity and costs from going virtual, he does not expect huge retailers like LL Bean to follow this path for a couple of reasons: one, they already have too much money tied up in facilities or a long-term lease, and two, management of call center operations can become uncomfortable “when they can’t see the back of your head.” He said the virtual model works well for companies interested in expanding an existing call center or for new companies, such as Jet Blue Airlines, which only has virtual agents.

One other thing that’s clear: Baby Boomers seem to be a perfect fit for this kind of work.

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