Home agent debate heats up

Do employees or contract workers make the best call center agents?

A debate is brewing among call center outsourcers that rely on home-based agents. Some firms such as Willow CSN use independent contract workers, while Alpine Access and others hire agents outright, insisting that’s the only way to train and supervise them properly. At issue is the IRS law that states a company “has the right to control or direct only the result of the work done by the independent contractor, but not the means and methods of accomplishing the result.”

The law appears to say call center managers can do little more than point contract workers to the phone and say, “When it rings, answer it.” And execs at firms that hire workers, like Alpine Access’s Reginald Foster, argue: “If you want a quality workforce, you have to provide the right degree of support and supervision. Our customers say they’re more comfortable that our agents are employees who we take responsibility for.”

But does the IRS law really prevent proper support and supervision of contract workers?

No. The existing law, which has been around since 1978, has been succeeded by a wealth of common law (court case precedents, private letter rulings, IRS issues) that provides companies (and their lawyers) with guidance on how to train and monitor contract workers within the limits of the law, says American Bar Association president Russell Hollrah.

Hollrah, who regularly consults for companies using independent contractors, favors the model.

“People who are enticed by the entrepreneurial model tend to be highly motivated. Because they live contract to contract, every day they have to work at their peak level. In contrast, [regular] employees have a job week to week, and it takes a termination decision to deny them work for next week. And it’s not often easy to affect that termination,” Hollrah says.

So while Hollrah says it’s against the law for a company to have contractors report to the office every day from 9 to 5 and wear a company uniform, a good deal of guidance and training is permissible. Willow, for instance, provides training for contract workers specific to each client’s needs, but charges the workers from $75 to $300 for each client application — a key part of how it maintains the proper contractor-client relationship.

While many still bristle at the idea of paying to work, Willow’s CEO Basil Bennett sees a direct correlation between paying and high performance.

“A cyberagent who has spent money to be certified by Willow, been selected by the client, paid for training, and knows he has to perform at a certain level — that agent wants to be successful, to meet the commitment and pays attention during training class,” Bennett says.

Willow also charges agents a $37.50-per-month fee for technical support, training in business techniques and other client-specific training. Contractors also pay a communications fee that ranges from $50 to $100 per month.

Another way Willow ensures its contract workers perform optimally within the law is to create a detailed performance contract specific to each client at the outset of the arrangement. Included in the work statement are hours to be worked for the client, type of training to be completed and performance benchmarks the agent is expected to meet.

Even though Willow has built a quality workforce using the contractor model, in many cases the employee model makes more sense. If an existing call center wants to convert to a virtual one (i.e., send its employees home to work), it’s more cost efficient to retain existing employees than to replace them with or convert them to contract workers, says Jack Heacock, a leading telework expert specializing in migrating existing organizations and call centers to remote work models.

Moreover, many existing call centers are unionized. “Transitioning existing agents to remote ones removes any obstacles that the union leadership and employees may express,” says Heacock, who favors the employee model.

“At best independent contractor status is hard to define,” he says. “The worker has to pay self-employment tax, and the IRS can make taking the home office deduction difficult. The worker might face zoning restrictions, business license requirements and other taxes. As an employee, he is covered by the corporate umbrella and legal department.”