The Jevons Paradox: How 19th Century reflections make it easy to see that AI is the Guardian Angel of the contact centre industry
Summary - In the dynamic landscape of contact centre outsourcing, the rise of artificial intelligence (AI) has sparked concerns about the potential replacement of human agents. However, a closer examination, considering the Jevons Paradox, reveals that rather than job displacement, AI can be a powerful catalyst for industry growth.
Like many of my contacts, and current and former colleagues, the BPO sector and contact centres have been a constant backbone for us all. Over the past 20 years or so, I’ve lost count of the number of people who started out as agents and are now leading departments and organisations.
Fundamentally, I believe this sector has a fantastic grounding as a platform for personal and professional development when you look at the sales and service-based experience you can learn. Without a doubt, the outsourced customer service industry has shaped thousands of careers.
Then there’s the communities the sector has supported and shaped. The West of Scotland (where I’m from) is no stranger to the transformative nature of our industry. Similar to the days of heavy industry and manufacturing, there are now generations of families that are supported through being part of making contact centres work.
So it’s understandable that the rhetoric around AI destroying jobs and reducing demand for outsourcing contact centre support (although now slightly dated) is still setting off alarm bells.
So here comes the point: changes to industry and fear of this change is nothing new…. I’d like to introduce you to William Stanley Jevons, a 19th-century economist who was asked to address very similar concerns.
Jevons observed a counterintuitive phenomenon in the use of coal during the Industrial Revolution. Advancements in steam engine technology were setting off similar alarm bells. Politicians, business owners and communities were concerned that steam engines, and their ability to massively improve the efficiency of coal, would lead to the overall consumption of coal reducing. In short, jobs would be lost and the industry would be on its knees. Sound familiar?
In his 1865 book "The Coal Question," Jevons noted that the opposite was in fact true - technological advancements increased the efficiency of coal consumption in engines, rather than leading to a reduction in coal usage, it paradoxically resulted in an overall increase in coal consumption.
Jevons realised that more efficient use of a resource didn't necessarily lead to conservation. Instead, it often triggered higher overall consumption.
And there, Jevons Paradox was born. It highlighted the complex relationship between technological progress, efficiency gains, and the use of resources, ultimately concluding that increased efficiency can often lead to an unexpected surge in consumption rather than conservation.
Jevons was able to show a relationship between the unitary cost of coal decreasing and consumption increasing.
This is the parallel I believe we should focus on when looking at contact centres, outsourcing, and the introduction of AI and Intelligent Automation.
AI's integration into the contact centre ecosystem does not diminish the role of human agents. Quite the opposite, it amplifies people’s capabilities.
For example, Intelligent automation and AI handle routine tasks, allowing agents to focus on complex, emotionally nuanced interactions where human empathy and problem-solving skills are necessary. This collaborative approach, where technology assists people, not only ensures a higher quality of service, but also contributes to job satisfaction among contact centre professionals.
For all of us involved in the industry, the pivotal point lies in educating the market about the unitary cost per customer interaction.
By leveraging AI to support contact centre agents, outsourcers can significantly reduce this unitary cost; supporting customers better and faster, the ability to sell more and increase the customer lifetime value through empowering agents to make data-driven decisions on the first call – all at reduced cost. This cost-effective model becomes a compelling argument for businesses to increase their outsourcing endeavours, not reduce them.
In conclusion, the future of contact centre outsourcing is not a choice between people and AI, but a symbiotic relationship that maximises efficiency and elevates the overall customer and employee experience.
Outsourcers must take on the role of educators, emphasising the economic advantages of AI integration in reducing the unitary cost per customer interaction as well as its potential to increase the happiness of employees. By doing so, they not only dispel fears of job displacement but pave the way for a thriving and resilient outsourcing sector in the age of AI.