Industry Update
Press Release15 November 2021

McKinsey Insights: An on-demand revolution in customer-experience operations?

Whether relying mainly on in-house or external talent, gig-style staffing models—when managed carefully—could give customer care the horsepower and flexibility it needs for today’s increasingly volatile markets.

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McKinsey & Company

When businesses across the globe were forced to shutter in 2020, the leaders at one regional North American bank shifted to virtual mode. Anticipating that customer-call volumes would remain elevated through the early months of the COVID-19 pandemic, bank leaders created a streamlined training module to cross-train sidelined branch workers. The extra support from branch colleagues helped the bank to manage the high volume of calls. Better still, because the supporting workers were branch personnel, their knowledge of the bank’s processes, products, and culture helped maintain the high level of customer satisfaction that the bank had worked so hard to achieve. Leaders learned that this internal “gig worker” approach could be a solution for managing future spikes in demand, whether from unforeseen events or seasonally based capacity increases. And, during a time of great uncertainty, it gave employees new opportunities—to work flexibly, learn new skills, and even find new career paths. That flexibility may give companies an edge now that many are fighting a “Great Attrition.”

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The COVID-19 lockdowns sparked a major scramble to move business to online and phone-based channels. Not every company, however, was prepared to handle the ensuing digital deluge; at this point, there are little data on how effectively companies coped. But the experiences of companies to date show that many organizations are now rethinking how they staff customer-care operations.

Flexible staffing—the use of external talent from outsourcing providers or independent freelancers—has been a staple of customer service for decades. But the pandemic may well be the first time that the redeployment of in-house talent from other departments has occurred on a relatively large scale.

Both approaches, externally and internally sourced, constitute the core of what we call “gig customer-experience operations,” or Gig CX. And it behooves companies from across the industry spectrum to consider making this strategy a part of their regular operations. In this article, we explore the pros and cons of Gig CX and identify four essential elements that must be in place to make it work.

The gig advantage

The idea of Gig CX arose as a natural offshoot of the ever-expanding gig economy, manifesting in high-profile companies in sectors ranging from ride hailing and food delivery to cleaning and odd-job services. More generally, the gig economy refers to the use of independent contractors, freelancers, contract-firm workers, and other temporary workers. Typically, gig workers connect with clients or customers through an online platform.

Gig’s greater numbers

The size of the gig economy is hard to ascertain for a number of reasons (not least because tracking gig jobs is not well established). Gallup, for example, used what it described as a “broad definition” in 2018 to estimate that 36 percent of US workers had a gig-work arrangement in some capacity, including independent contractors, online-platform workers, contract-firm workers, on-call workers, and temporary workers. 1

Roughly two decades ago, companies began outsourcing in earnest, primarily as a cost-saving measure. Customer service, in particular call centers, was perhaps the most common business process to go that route. Over time, the use of gig labor has evolved beyond sheer cost savings into more of a general efficiency lever, allowing companies to focus on core competencies and manage demand volatility and resources more strategically.

The role of gigs in customer experience

In customer-experience operations, the advantages of gig labor can be many, for companies and workers alike. In addition to the greater flexibility that an on-demand model confers, using gig workers can help overcome geographic limits to talent sourcing—it offers efficiencies by reducing the need for physical infrastructure, allowing costs to be scaled more closely to output requirements.

Companies can also tap domain experts (such as brand advocates) to interact with customers, creating a more informed and enthusiastic service environment. Workers, for their part, get the opportunity to work with multiple client companies simultaneously, which can translate into broader exposure, potentially higher earning potential, and greater scheduling flexibility.

Gigs go internal

The use of internal talent in a “gig” manner is relatively new and has its own set of advantages. For one, companies gain flexibility and can optimize staffing by moving away from a shift model to a more on-demand model. Within days of the first COVID-19 lockdowns, a European bank converted several branch sites into call centers and moved nearly half of its support staff to a work-from-home arrangement; today, the bank’s contact center operates out of several dozen locations.

Exhibit 1 shows how a gig approach can solve the mismatch in supply when call volumes spike. By supplementing with gig workers (either external workers, redeployed internal employees, or a combination of the two), companies can quickly meet fluctuating demand.

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About McKinsey & Company

McKinsey & Company is a global management consulting firm. We are the trusted advisor to the world's leading businesses, governments, and institutions. We work with leading organizations across the private, public and social sectors. Our scale, scope, and knowledge allow us to address problems that no one else can. We have deep functional and industry expertise as well as breadth of geographical reach. We are passionate about taking on immense challenges that matter to our clients and, often, to the world. We work with our clients as we do with our colleagues. We build their capabilities and leadership skills at every level and every opportunity. We do this to help build internal support, get to real issues, and reach practical recommendations. We bring out the capabilities of clients to fully participate in the process and lead the ongoing work.

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