Navigating Labor Shortages: A Customer Service Crisis

Author

Barry Weiss

Guest Author | Consulting, Operations, Technology and Professional Services Leader

Published Date

April 2, 2025

The overall US labor market is shrinking given the aging workforce and fewer legal immigrants entering the country. The U.S. Chamber of Commerce reports that the workforce is missing 1.7 million Americans compared to February 2020.

These trends, paired with fewer young people's interest in service-related jobs and high attrition rates, will make it challenging for customer service organizations to maintain service levels in the future.

Despite this decrease in the workforce, consumers want and expect to receive better and more personalized service levels.

This friction of less labor and increased customer expectations is putting many businesses in a position to fail. Surveys show that developing a risk mitigation strategy is the top priority for many service organizations in 2025.

That said, let’s dig into this growing problem and explore ways to mitigate these risks in more detail.

How bad is the problem?

The data says it all. It’s really bad.

Over the past two decades, the number of workers aged 65 or older has increased by a remarkable 117%, and it’s projected that the number of workers aged 55 or older will grow three times faster than the number of workers aged 25-54.¹

The US labor force participation rate is dropping for men and women (from 75% in 2000 to 68% in 2023 for men and from 60% in 2000 to 57% in 2023 for women). ²

A global survey by NICE WEM found that the contact center attrition rate was 42%. Almost a third of agents surveyed were actively looking for a new job; of those, only 60% wanted another contact center role.³

The average overall employee turnover for all industries is 15%. Inbound customer service centers have an average turnover rate of 30-45%, and field service rates are close to 40%.⁴

Nearly half of the field workforce in North America and EMEA is approaching retirement age. In North America, 46% of field technicians are over 50, while in EMEA, that number rises to 50%—highlighting an urgent need for workforce renewal and knowledge transfer.⁵

It doesn’t stop there, as 69% of a global customer experience survey respondents said they would switch brands for poor customer service. ⁶

These statistics illustrate the severity of these workforce challenges, as there simply won’t be enough contact center agents or field service technicians in the future to meet customer demands. This puts brand loyalty and customer retention in jeopardy.

So how do we minimize the risk?

All risk mitigation strategies start with better forecasting and planning.

Determining the right strategy is difficult if we don’t understand the supply and demand equation for service needs vs. labor. Unfortunately, there’s no silver bullet to easily estimate demand. So companies will have to try their best to get a feel for the ebbs and flows using existing data. Once an established understanding of the demand landscape exists, companies can engage in several talent and operational strategies to mitigate risk by improving efficiencies. Each strategy has advantages and disadvantages, and we’ve highlighted them below.

Talent Strategies	Pros	Cons
Upskill existing employees	Flexibility with existing staff to work on more work order types	Training dilution and decreased expertise Potential for higher wages
Increase budget & hire more	Available, trained resources	Budgets are often set too far in advance to adapt within a fiscal year Must pay during low-demand periods
Target different talent pools (i.e., similar work but different technology)	Provides access to skilled resources	Requires building a talent acquisition strategy/plan and executing Requires additional training
Contract with 3rd parties	Meet SLAs during high-demand periods Only pay when resources are needed	Cost for individual transactions increases (most cases) Time to ramp up/down Potential for customer experience gaps Software contract licensing challenges
Internal mobility within the organization	Provides options for employees Reduces impact of peaks in demand	Must backfill other teams in the organization Requires additional training for resources moving and backfilling resources

Operational Strategies	Pros	Cons
Deflect Service - Drive more customer self-service transactions	Fewer inbound omnichannel contacts in the call center Provides flexibility to various customer profiles (i.e., younger generation)	It can be difficult to “train” customers, resulting in as much or more time on the phone Difficult to predict what percentage of people will use self-service
Deflect Service - Increase remote support in the call center	Higher first-call resolution / fewer 2nd calls about the same topic Decreases overall resolution times/improves customer experience Reduces truck rolls	Difficulty to upskill existing contact center employees Contact center handle times may increase (i.e., moving problem from one place to another)
Deflect Service - Increase first-time fix rates in the field	Reduces repeat truck rolls Improves customer experience	May require additional parts on the vehicle, stocking locations, or customer site

Technology-enabled process changes like in the tables above will create operational efficiencies that drive excess capacity to better meet or exceed customer expectations.
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The Challenge: Making the Change

For many companies, investing in a problem that isn’t significantly impacting the business today can be a tough sell. But, forward-thinking companies that do their homework and plan for the future will maintain brand loyalty and retain customers over time.

Contact our team to learn how to deflect service and maintain your service levels in the future.