The BPO sector is at the frontier of AI-driven business transformation. It has always been a labor-intensive industry that, more recently, has increased revenue margins by offshoring much of its workforce since the 1990s. A subsequent trend of nearshoring was exacerbated by the Covid-19 pandemic and then quickly followed by the early introduction of AI-powered automation.
Just as the industry had faced the labor arbitrage of offshoring, the BPO industry is facing a new type of labor arbitrage, namely AI versus humans.
Most estimates put the number of contact center agents at up to 13 million worldwide, or tens of millions, including broader BPO roles. Hiring data is mixed and varies significantly depending on geography and where a market is in the AI implementation cycle. For example, contact hiring in the US will decline by 5% in 2026, according to Gitnux, while global BPO hubs like India and the Philippines are seeing significant headcount growth.
For Debra Maxwell, CEO of BPO services company ArvatoConnect, the binary proposition of AI versus human workforce simply doesn’t ring true. It’s less about replacing humans, he says, and more about how the work itself is evolving. And taking employees on that journey is a key component of your leadership strategy.
ArvatoConnect is a digital transformation partner for businesses and the public sector, helping them redesign the way they interact with customers and execute back-office operations. The BPO industry has a long-standing problem with notoriously high attrition rates. Automating low-value tasks and upskilling staff to take on more complex and rewarding work can solve this problem. Additionally, Maxwell claims that a better employee experience directly leads to a better customer experience.
“Our leadership approach to AI has been one of inclusion rather than exclusion,” he says, noting that companies that deploy AI for easy labor arbitrage are missing out on the opportunity to create better outcomes for their customers.
AI versus humans is the wrong question
Maxwell says the most common mistake he sees in AI implementations within his industry is starting with the wrong question: What can we get out of what humans are doing right now? The right approach would be to look at what customers need at each point in the journey and where AI can augment it or make it easier.
“Customer journeys are very complex and people think everything is predictable, and it’s not,” Maxwell says. Assuming that AI can address complex customer problems leads to frustration and problems.
“We use AI tools to help our agents do their jobs better, finding information faster, rather than just automatically replacing it, and assuming that AI can just take care of all these very complex problems.
The key is deciding where to automate and where to scale up. For less complex tasks, ArvatoConnect customers are currently automating up to 70% of customer interactions, and Maxwell envisions a point where very simple, scripted processes could reach 100% automation. “But in general, as AI tools develop, we think the optimal model is probably around 70% digital and 30% human-driven, and that’s particularly where emotional intelligence or responsive conversations need to happen,” Maxwell says.
As more basic tasks and roles shift, tasks that require human interaction to get a good outcome for a client will become more effective. “We’re certainly seeing an increase in more skilled roles, whether it’s AI product development, and less hiring for entry-level roles,” Maxwell says.
Bring staff into the AI transformation
Maxwell describes contact center work as a “difficult job” that could become easier and more rewarding if basic tasks were automated. And it recognizes that employees are more likely to support AI implementation if they are involved in making decisions about when to move from AI customer interaction to human interaction.
“I think everyone assumes that our customer service agents are terrified of AI. I think there’s a lot more acceptance than people realize. They see it as an advantage, especially if it’s communicated well and managed properly,” Maxwell says.
Once a year, Maxwell visits all ArvatoConnect sites to hold town hall meetings and speak directly with employees. And you’re having a pretty broad conversation about AI. The feedback has been more enthusiasm than anything else, something she attributes to the company providing opportunities for staff to participate.
Maxwell has also created a working group he calls The Big Debate, which includes nominated employees from across the company who meet with Maxwell once a quarter to share employee concerns anonymously. “And AI has been driving that conversation for at least the last two years,” he says. The most common concerns revolve around how AI will affect jobs, what training will be offered and its environmental impact.
Employees designing their own AI workflows
But perhaps the best demonstration of employee contributions to the company’s AI journey is an initiative called MyCreationStation, in which some of the company’s staff built their own co-pilot chatbots. “Because we give everyone access to the co-pilot, they are building their own AI robots in the co-pilot,” says Maxwell, who has seen the initiative generate a lot of excitement among employees about AI.
These are not senior managers. They include some of the younger staff. Maxwell cites an example of work done to automate financial viability risk assessments for Crown Commercial Service. An employee submitted an idea through MyCreationStation about automating slower manual processes, which led to the implementation of an AI-enabled tool that analyzes financial statements and generates reports, freeing up evaluators to focus on professional judgment.
The tool has already delivered 97% accuracy in assessments, significant reductions in handling times, and increased employee engagement as colleagues now use their expertise to review and interpret results instead of entering data. The project was such a success that the model is now being expanded to other areas of the business.
Maxwell’s view is that staff members are best placed to come up with really creative ways to use AI every day in their jobs, right? “That’s just logical, I don’t understand companies that refrain from letting their employees experiment with AI,” says Maxwell. And Arvato Connect’s attrition rate is lower than the overall BPO market. Employees benefit because they are continually told that AI won’t take their job, but someone who knows how to use it will.
This is certainly true of contact center jobs. According to research and analytics firm GlobalData, nearly one in five (and rising) new contact center hires worldwide are now focused on AI expertise. AI roles are growing at a rate 40 times the overall contact center hiring rate. And this proportion is substantially higher in major outsourcing hubs such as India and the Philippines, and in digitally native companies, where it can exceed a third of all new positions.
In light of this, Maxwell’s approach to engaging employees in the AI transformation journey will be a net benefit to employees, the business and, ultimately, customer outcomes.
“ArvatoConnect CEO Debra Maxwell on Transforming AI in High-Turnover BPO Operations” was created and originally published by Verdict, a brand owned by GlobalData.
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