Having agents work from home can help call centers' financial performance. One way to determine that is to calculate the infrastructure cost per employee (ICE) in traditional (or premises call centers) and for those who work in their homes, then overlay the results with any productivity gains.
First look at those costs — rent, power, equipment, heating, plus voice/data or Premises- Unavoidable ICE — that have to be paid regardless of how many employees are working from home. To calculate, take all those costs per period and divide them per workstation. Divide that number for multiple shifts.
Let's do a rough ICE calculation based on a study by The Boyd Company for a single-shift 150-agent inbound call center in Chicago, IL, occupying 30,000 square feet (sf). The center has an annual inbound volume of 15 million toll-free minutes. Amortization includes workstations, phones and computers, as shown in chart 1 below.
Now examine those direct property-related costs that can be avoided, or Premises-Avoidable ICE if the call center reduces existing or future property expenses with agents working exclusively from home.
In the example, assume 100 of the 150 employees work from home; no hot-desks. They live within the Chicago area and/or have VoIP, so there's no additional long distance charges. You own the computers, but the employees own the phones and furniture, cutting your equipment costs by half.
Those employees who now work at home had consumed 20,000 sf. You now need only 10,000 sf, as shown in chart 2 below.
Net Premises ICE
Net premises ICE is how much ICE you will have to allocate with home working.
Assume the telecom costs are split two-third home office and one-third premises office. The premises employees will eat up one-half of the reduced equipment costs even though they are one third of the workforce because you subsidize furniture and amenities that exclusive home employees pay for, as shown in chart 3 below.
Home ICE
Home ICE refers to costs incurred in supporting home offices, typically voice, data and equipment. It also comes in unavoidable and avoidable flavors. Unavoidable assumes premises-unavoidable costs.
Assume paying home agents' voice and data line charges, including outbound long distance. That adds 20% to costs because of economies of scale in supplying phone lines to premises centers, though with network/ intelligent routing and VoIP that may disappear, as shown in chart 4 below.
The avoidable home ICE looks at a scenario where the organization needs to add staff but doesn't want to add space, or wants to cut property-related costs.
Now assume the above amortization cost split between net premises and home costs, with home employees incurring lower costs. In addition, the telecom charges will be a wash: the 20% higher charges for home workers in unavoidable home ICE are made up by lower economies of scale in the smaller premises, as shown in chart 5 below.
Analyzing ICE
Compare the scenarios where you can or cannot eliminate real estate costs with home working, as shown in chart 6 below.
Factoring Productivity
AT&T found in its research that home working improves productivity by 5 hours per employee per week. Assume average employee compensation (wages/benefits) is $40,000 or $19.23 per hour per employee. $19.23 x 5 work hours per week x 52 weeks/year = approximately $5,000/year in productivity gains.
Now check out the calculation where you're stuck with the building (see chart 7 below). By calculating productivity measures, you may find that home-working will pay off even if you still have to pay rent on premises call centers.
Brendan Read is the author of "Home Workplace," published by CMP Books.
