IRS Telephone Assistance: Opportunities to Improve Human Capital
Management (Letter Report, 01/30/2001, GAO/GAO-01-144).
Each year, the Internal Revenue Service (IRS) determines the staffing
level for its toll-free telephone customer service operations. GAO found
that the IRS lacks a long-term telephone customer service goal that
reflects the needs of taxpayers and the costs and benefits of meeting
that goal. Rather, IRS annually determines the level of funding it will
seek for its customer service workforce, using its judgment of how to
best balance service and compliance activities. IRS then calculates the
level of service that funding levels will provide. This approach is
inconsistent with the Government Performance and Results Act and the
practice of selected public and private call centers that field
questions. IRS recognizes the shortcomings of its personnel management
and will include performance measures and goals in its 2002 strategic
plan. According to IRS officials, IRS also faces challenges in
recruiting, training, retaining, and scheduling customer service
representatives. IRS is developing a strategy to address each of these
issues.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: GAO-01-144
TITLE: IRS Telephone Assistance: Opportunities to Improve Human
Capital Management
DATE: 01/30/2001
SUBJECT: Customer service
Personnel management
Telephone
Human resources utilization
Performance measures
Strategic planning
Private sector practices
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GAO-01-144
IRS TELEPHONE ASSISTANCE
Opportunities to Improve Human Capital Management Report to the Chairman,
Subcommittee on Oversight, Committee on Ways and Means, House of
Representatives
United States General Accounting Office
GAO
January 2001 GAO- 01- 144
Page i GAO- 01- 144. IRS Human Capital Management Letter 1
Results in Brief 2 Background 5 Scope and Methodology 7 IRS Plans to Base
Staffing on Strategic Goals Rather Than Annual
Funding 10 Call Sites Faced Challenges in Implementing Human Capital
Practices 13 Evaluations Do Not Consider How Human Capital Practices Affect
Achieving Level- of- Service Goals 22 Conclusions 23 Recommendations for
Executive Action 24 Agency Comments and Our Evaluation 24
Appendix I Organizations Contacted in Our August 2000 Report 28
Appendix II Comments From the Internal Revenue Service 32
Appendix III GAO Contacts and Staff Acknowledgments 37 GAO Contacts 37
Acknowledgments 37
Tables
Table 1: Characteristics of the Six IRS Call Sites We Visited 9 Table 2:
Telephone Customer Service Operations in Organizations
We Visited or Telephoned 28
Figures
Figure 1: How IRS' Call- Routing System Operates 5 Figure 2: IRS Employees
Monitoring Network Operations and
Handling a Taxpayer's Call 7 Contents
Page 1 GAO- 01- 144. IRS Human Capital Management
January 30, 2001 The Honorable Amo Houghton Chairman, Subcommittee on
Oversight Committee on Ways and Means House of Representatives
Dear Mr. Chairman: Each year, the Internal Revenue Service (IRS) receives
tens of millions of telephone calls from taxpayers seeking help on a variety
of topics- from simple inquiries about the status of their refund to highly
complex questions about tax law. The approximately 10,000 full- and part-
time customer service representatives 1 who answer these calls are part of
IRS' human capital. Sound management- to ensure that an adequate number of
customer service representatives with the right skills are available when
needed- can serve as a powerful tool to help IRS achieve its goal of better
serving American taxpayers.
Because of your interest in the quality of IRS' toll- free telephone
service, you asked us to prepare three reports on telephone customer service
operations. The first report, issued in August, 2 presented information on
the human capital management practices of selected public and private call
centers. Another report, discussing the telephone customer service IRS
provided during the 2000 filing season, will be issued later this year. Our
objectives for this report were to identify whether IRS faced challenges,
and, if so, any potential improvement opportunities, relating to
identifying staffing levels needed to meet its telephone customer service
goals;
1 In October 2000, IRS had 9,865 customer service representatives. About 40
percent of them were seasonal employees who generally worked between 6 and
12 months per year. These 9,865 representatives are equivalent to about
8,000 full- time employees.
2 Customer Service: Human Capital Management at Selected Public and Private
Call Centers (GAO/ GGD- 00- 161, Aug. 22, 2000).
United States General Accounting Office Washington, DC 20548
Page 2 GAO- 01- 144. IRS Human Capital Management
recruiting, training, retaining, and scheduling customer service
representatives; and
evaluating its call center human capital management practices. To address
these objectives, we interviewed officials and examined documents at IRS'
National Office in Washington, D. C., Office of Chief Customer Service Field
Operations and Customer Service Operations Center (hereafter referred to as
the Operations Center). We also visited 6 of IRS' 25 call sites because the
individual sites were responsible for administering many aspects of human
capital management, including recruiting, training, retaining, and
scheduling customer service representatives. The six call sites, located in
Atlanta, Baltimore, Cincinnati, Denver, Fresno, and Indianapolis, were
selected to include different characteristics, such as staffing levels,
hours of operation, and geographic location. We also reviewed literature on
human capital management in call centers at other organizations. Our
objectives, scope, and methodology are discussed in greater detail in a
separate section of this report.
IRS faces an annual challenge in determining the staffing level for its
tollfree telephone customer service operations. IRS does not establish a
longterm telephone customer service goal reflecting the needs of taxpayers
and the costs and benefits of meeting that goal and annual goals aimed at
making progress toward reaching that long- term goal. Rather, IRS annually
determines the level of funding it will seek for its customer service
workforce, based on its judgement of how to best balance service and
compliance activities, and then calculates the level of service that funding
level will provide. This approach to setting goals is inconsistent with
Government Performance and Results Act and the practices of selected public
and private call center operations that deal with tax questions or specific
subjects that are comparable in complexity to tax questions addressed by IRS
customer service representatives. Without a long- term, desired level- of-
service goal, and plans to reach the goal over time, IRS lacks meaningful
targets for managing call center performance and measuring improvement. IRS
recognizes the need to establish long- term goals, and the Commissioner says
that IRS' final fiscal year 2002 Strategic Plan and Budget will include a
74- percent level- of- service goal, with a goal of reaching 85 percent to
90 percent by fiscal year 2003. In addition, IRS is considering adopting
some of the measures used by other organizations and establishing goals for
those measures. Results in Brief
Page 3 GAO- 01- 144. IRS Human Capital Management
According to site officials, the six IRS call sites we visited faced
challenges in successfully recruiting, training, retaining, and scheduling
customer service representatives:
Five sites had difficulty hiring representatives due to job characteristics
such as the seasonal nature of the work;
All sites had difficulty getting representatives trained and keeping them
proficient through refresher training, due in part to the scope and
complexity of the topics they were expected to know;
Four sites had double- digit attrition- estimated as high as 19 percent at
one site; and
All sites had difficulty effectively scheduling their staff, due to
inaccurate demand forecasting and complicated staff scheduling methods.
Recognizing its recruiting difficulties, IRS is developing a strategy to
focus its recruiting to those sites where it is better able to compete in
the local job market. IRS is also modifying a commercial system to improve
demand forecasting and staff scheduling. Regarding training, in fiscal year
2000, IRS began to reduce the topics assigned to customer service
representatives and to provide just- in- time training on those topics.
However, these efforts do not include identifying specific competency gaps
nor ensuring that these gaps are filled through refresher training.
Moreover, IRS is not monitoring customer service representative attrition to
determine what, if any, steps should be taken to address it.
IRS also faces challenges in evaluating its human capital management
practices for its telephone customer service operations. According to our
self- assessment checklist for agency leaders, all human capital policies
and practices should be designed, implemented, and assessed by the standard
of how well they help an organization pursue its mission, goals and
objectives, and strategies. 3 IRS' evaluations do not assess how individual
or collective human capital policies and practices affect its ability to
achieve long- and short- term desired level- of- service goals, because, as
previously discussed, IRS has not yet established such goals. Additionally,
while IRS evaluates human capital management practices in areas such as
recruiting or training, in an ongoing effort to improve those
3 Human Capital: A Self- Assessment Checklist for Agency Leaders, Version 1
(GAO/ OGC- 0014G, Sept. 2000), p. 2.
Page 4 GAO- 01- 144. IRS Human Capital Management
practices, its evaluations generally do not consider potential
interrelationships between or among human capital management practices.
Unless IRS evaluates how its human capital management practices affect its
ability to meet strategic and annual toll- free service goals and considers
the interrelationships among its human capital management practices, IRS is
not likely to optimize its progress toward reaching its customer service
goals.
We are recommending that the Commissioner
set long- and short- term customer service goals that are based on
taxpayers' needs and working with congressional and other stakeholders to
obtain support and resources needed to reach those goals;
establish a system for identifying and meeting the refresher training needs
of customer service representatives;
develop a strategy for monitoring and dealing, as appropriate, with the
attrition of customer service representatives; and
ensure that IRS' evaluation of human capital management practices consider
their effects on achieving the toll- free operation's long- and short- term
goals as well as the interrelationships among human capital management
practices.
The Commissioner of Internal Revenue agreed with our recommendations and
offered additional information on IRS' efforts related to our
recommendations. We have incorporated his comments and modified our report
where appropriate.
Page 5 GAO- 01- 144. IRS Human Capital Management
IRS' 10,000 customer service representatives are located at 25 call sites
around the country. In 1999, IRS began operating this network as a single
call center providing round- the- clock service. Managing the network in
this way enabled IRS to route calls from three separate toll- free lines-
one each for questions about tax law, account services, and refund status-
to the sites with the shortest hold times among those customer service
representatives assigned to answer questions concerning those issues. (Fig.
1 illustrates call routing within IRS' toll- free network.)
Figure 1: How IRS' Call- Routing System Operates
Source: GAO analysis of IRS call- routing information.
Before IRS began operating the network as a single call center, taxpayer
calls were routed by area codes or by the percentage of staff the site had
scheduled to work. Calls routed in this manner could not be easily
Background
Page 6 GAO- 01- 144. IRS Human Capital Management
rerouted when a site was experiencing frequent busy signals or lengthy hold
times. Although individual call site operating hours and call handling
responsibilities varied, IRS expanded its overall toll- free network
coverage in January 1999- from 16 hours a day, 6 days a week, to 24 hours a
day, 7 days a week.
IRS' call center network is controlled by the Operations Center. In general,
the Operations Center is responsible for
forecasting call demand- the numbers, types, and timing of calls IRS is
expected to receive throughout the planning year on each of its three toll-
free lines (tax law, accounts, and refunds);
planning the routing of calls among call sites, based on each call site's
assigned toll- free line and subject coverage responsibilities;
developing staffing requirements for each call site and monitoring site
adherence to those requirements; and
monitoring network call traffic status and, when necessary, rerouting calls
among the sites to optimize service.
The Operations Center develops call site staffing requirements weekly, with
call site input and agreement. These requirements prescribe the numbers of
trained customer service representatives that are to be available and ready
each half- hour to take calls on each assigned subject category and toll-
free line. The call sites, in turn, are expected to adhere to the staffing
requirements prescribed by the Operations Center. They are generally
responsible for recruiting, training, and assigning customer service
representatives in sufficient numbers and skills to enable them to meet
prescribed staffing requirements. 4 Collectively, IRS call centers employed
nearly 10,000 customer service representatives in October 2000.
The top picture in figure 2 shows Operations Center officials monitoring
network operations, while the picture on the right shows a representative
handling a call at IRS' call center in Atlanta.
4 To ensure the availability of the prescribed numbers of customer service
representatives, the call sites generally must schedule more than the
required numbers of representatives to allow for breaks, reading time, and
other factors that make the representatives unavailable to take calls.
Page 7 GAO- 01- 144. IRS Human Capital Management
Figure 2: IRS Employees Monitoring Network Operations and Handling a
Taxpayer's Call
Source: GAO.
To address our objectives, we interviewed IRS officials involved in managing
toll- free telephone operations, obtained supporting documentation, and
reviewed related reports by the Treasury Inspector General for Tax
Administration (TIGTA). Although we did not independently verify IRS
officials' responses to our questions, we Scope and
Methodology
Above:
Customer Service Operations Center staff monitor the toll- free network
operations.
Right:
A Customer Service Representative handles a call at IRS' Atlanta Call
Center.
Page 8 GAO- 01- 144. IRS Human Capital Management
reviewed them and related documentation for consistency. IRS' use of other
resources will be discussed in a forthcoming report on toll- free
performance during the 2000 filing season.
We used our human capital self- assessment checklist 5 to obtain an
understanding of human capital management, its importance in achieving
federal agency operational goals, and the framework that we developed to
assist agency leaders in evaluating their human capital management
practices. Because people are a key resource for carrying out agencies'
missions, we also reviewed the Government Performance and Results Act's
requirements for agency strategic planning, goal- setting, and performance
measurement. To identify human capital management practices used by other
organizations in telephone customer service, we obtained information from
several sources, including
our August 2000 report on human capital management practices of public and
private organizations; 6
the 1995 National Performance Review report on best practices in telephone
service; 7 and
literature on call center management, including Incoming Calls Management
Institute 8 information and reports.
We did our work at
IRS' National Office in Washington, D. C.;
the Office of the Chief Customer Service Field Operations in Atlanta;
the Customer Service Operations Center in Atlanta; and
six of IRS' 25 call sites. As agreed with your office, we judgmentally
selected the six sites to ensure geographic coverage and other
characteristics and, therefore, cannot project our results to all 25 call
sites.
5 GAO/ OGC- 00- 14G, Sept. 2000. 6 See appendix I for a description of the
organizations included in our August report. 7 Putting Customers
First– Serving the American Public: Best Practices in Telephone
Service (Federal Consortium Benchmark Study Report, Feb. 1995).
8 The Institute is located in Annapolis, MD, and offers training programs
and educational resources to call center management professionals.
Page 9 GAO- 01- 144. IRS Human Capital Management
Because IRS began providing 24- hour coverage in 1999, we included the two
call sites that operated 24 hours a day, 7 days a week and four sites
operating fewer than 24 hours a day. Because some call sites were colocated
with IRS service centers that had large labor pools from which the sites
might recruit staff, the six sites included three that were colocated with
service centers and three that were not. To understand human capital
management practices within the context of IRS' new organizational and
operational structure, 9 our sample includes three sites that were
designated to serve taxpayers with incomes from wages and investments and
three sites that were designated to serve small business and self- employed
taxpayers. Since differences in site staffing levels could lead to
differences in their human capital management practices, we selected two
sites each from the low, middle, and high ranges of staffing levels among
the 25 call sites- less than 200 staff, between 200 and 400, and more than
400, respectively. The characteristics of the six sites are shown in table
1.
Table 1: Characteristics of the Six IRS Call Sites We Visited Call site
location 24- hour, 7 daya- week service Colocated with a
service center Site designation a Toll- free
staffing level b
Atlanta Yes Yes W& I 602 Baltimore No No W& I 285 Cincinnati No Yes SB/ SE
166 Denver No No SB/ SE 288 Fresno Yes Yes W& I 473 Indianapolis No No SB/
SE 197 a Site designation as either Wage and Investment Income (W& I) or
Small Business and Self
Employed( SB/ SE) refers to the site's organizational alignment with one of
the new IRS divisions named for the taxpayer groups they were designed to
serve. b Staffing levels are based on IRS' planned full- time equivalent
staffing as of August 1999.
Source: GAO.
We performed our work between May 1999 and October 2000 in accordance with
generally accepted government auditing standards. We obtained written
comments on a draft of this report from the
9 IRS is restructuring its operation into four divisions: Wage and
Investment Income (W& I), Small Business and Self Employed (SB/ SE), Large
and Mid- size Business, and Tax- Exempt and Government Entities. Toll- free
service will be provided to taxpayers categorized as W& I or SB/ SE.
Page 10 GAO- 01- 144. IRS Human Capital Management
Commissioner of Internal Revenue. The comments are discussed near the end of
this report and are reprinted in appendix II.
IRS faces an annual challenge in determining the staffing level for its
tollfree telephone customer service operations. IRS has not established a
long- term, desired level- of- telephone- service goal based on the needs of
taxpayers and the costs and benefits of meeting them, and then determined
what staffing level is needed to achieve that service level. Rather, IRS
annually determines the level of funding it will seek for its customer
service workforce, based on its judgment of how to best balance its efforts
to assist taxpayers and to ensure their compliance with tax laws, and then
calculates the expected level of service 10 that funding level will provide.
IRS' approach to setting this goal is inconsistent with federal guidance on
strategic planning, which calls for agencies to develop strategic goals
covering at least a 5- year period and to determine the staffing and other
resources needed to achieve the goals. IRS' approach is also inconsistent
with industry practices, which base their goals and staffing on customer
needs. Without a long- term level- of- service goal, as well as annual goals
aimed at achieving the long- term goal over time, IRS lacks meaningful
targets for strategically planning and managing call center performance and
measuring improvement. In commenting on a draft of this report, the
Commissioner stated that IRS planned to set strategic goals and staff to
meet those goals.
I In n the absence of a long- term goal, and multiyear plans for reaching
it, IRS has estimated the service it could provide based on different
staffing levels. For example, when formulating its fiscal year 2000 budget,
IRS estimated that it would receive over 100 million calls on its three
toll- free lines throughout the fiscal year and that its customer service
representatives could handle an average of 5.6 calls per hour 11 that they
were available to take calls. 12 These workload and productivity
10 For fiscal year 2000, IRS calculated its level of service as the number
of call attempts, minus busy signals and calls abandoned, divided by call
attempts. 11 Other planning assumptions included the use of automation and
fiscal year 1999 demand (the first year IRS attempted to provide round- the-
clock service), with a 2 percent growth factor.
12 According to an Operations Center official, the calculation considers the
time customer service representatives are not available to take calls, such
as when they are on leave, or attending training, meetings, or other
authorized events. IRS Plans to Base
Staffing on Strategic Goals Rather Than Annual Funding
Page 11 GAO- 01- 144. IRS Human Capital Management
assumptions were the basis for calculating the expected levels of service
IRS could provide with different staffing levels. Specifically, with
customer service representative levels ranging from 8,291 to 10,800 full-
timeequivalent staff, IRS estimated that it could achieve levels of service
ranging from 58 to 80 percent, respectively. Because of the need to balance
service and compliance activities within overall staffing budget
limitations, IRS decided to request funding at the lower level, establishing
a 58- percent level- of- service goal for fiscal year 2000 and a 60- percent
level for fiscal year 2001.
A long- term, results- oriented goal is important because its provides a
meaningful sense of direction as well as a yardstick for measuring the
results of operations and evaluating the extent of improvements resulting
from changes in resources, new technology, or management of human capital.
The Government Performance and Results Act of 1993 required executive branch
agencies to
develop multiyear, strategic plans covering at least a 5- year period;
set long- term, output- or results- oriented goals in these strategic plans;
describe the human and other resources needed to achieve goals;
update these plans at least every 3 years;
prepare annual performance plans with annual performance goals; and
measure and report annually on its progress toward meeting those goals.
Under the act, strategic plans are the starting point for agencies to set
annual performance goals aimed at achieving their strategic goals over time.
As part of the strategic planning process, agencies are required to consult
with Congress and to solicit the views of other stakeholders who might be
affected by the agencies' activities.
Unlike IRS, officials at all seven public and private call center operations
we visited as part of our August 2000 report said that they determined
staffing requirements based on their customers' needs and clearly
articulated service- level goals- that is, the percentage of calls to be
answered within a given time frame. For example, the Social Security
Administration (SSA)- an agency that is also subject to federal budget
constraints, had a goal of 95 percent of its callers getting through on its
toll- free line within 5 minutes of their first attempt. This goal was
established with input and support from Congress and top SSA leadership as
part of a government wide effort to improve customer service. According to
an SSA associate deputy commissioner, the focus on
Page 12 GAO- 01- 144. IRS Human Capital Management
improving telephone customer service followed a period of very poor service
in the early and mid- 1990s, when as many as 49 percent of callers got busy
signals when they called the toll- free number. The associate deputy said
that congressional stakeholders continue to monitor SSA's toll- free
telephone operations, resulting in continued support by SSA management to
allocate the resources needed to meet established goals.
Other studies have also documented the importance of setting servicelevel
goals based on customers' needs. One guide to call center management for
practitioners that we reviewed underscored the importance of service- level
goals. 13 It described service level as “the core value” at the
heart of effective call center management, without which, answers to many
important questions, including “How many staff do you need?”
would be left to chance. It said service- level goals should be realistic,
understood by everyone in the organization, taken seriously, and funded
adequately. While the guide also recommended benchmarking, formally or
informally, with competitors or similar organizations, it stated each
organization should determine an appropriate service level for its call
centers, considering its unique circumstances. These considerations should
include the labor and telephone equipment costs of answering the call, the
value of the call to the organization, and how long callers are willing to
hold for service.
IRS recognizes the need to establish long- term goals and is considering
adopting some of the measures used by other organizations and establishing
goals for those measures. For fiscal year 2001, for example, IRS plans to
measure the percentage of callers who reach IRS within 30 seconds. While IRS
has not established a long- term goal for this measure, it has set an
interim goal of 49 percent for fiscal year 2001.
In commenting on a draft of this report, the Commissioner stated that IRS
had instituted an agencywide strategic planning process in March 2000 that
links the budget and available resources to its strategies and improvement
projects. According to the Commissioner, IRS' fiscal year 2002 Strategic
Plan and Budget will include a 74 percent level- of- service goal, with a
goal of reaching 85 to 90 percent by fiscal year 2003. Also, IRS had an
initiative under way to improve workload planning to ensure that
13 Brad Cleveland and Julia Mayben, Call Center Management on Fast Forward:
Succeeding in Today's Dynamic Inbound Environment (Annapolis, MD, 1997).
Page 13 GAO- 01- 144. IRS Human Capital Management
customer needs are considered during the planning and budgeting process.
The six call sites we visited faced challenges in successfully recruiting,
training, retaining, and scheduling customer service representatives.
According to site officials, these challenges included difficulties
recruiting representatives due to job characteristics,
training representatives and keeping them proficient,
retaining skilled representatives, and
scheduling representatives to meet forecasted staffing requirements.
Officials at five sites said they experienced some degree of difficulty in
recruiting representatives because of job characteristics such as the
seasonal nature of the positions, undesirable work hours, or the
stressfulness of the work. Nevertheless, five of the sites were able to fill
their vacant positions. One site was unable to fill its needs and had
concerns about the suitability of the persons hired. According to officials
at this latter site, due to the limited time between the date they were
provided the number of positions to fill and the time that the new employees
had to report for work, the officials did not have sufficient time to
interview all applicants before hiring them.
Officials at each IRS call site were responsible for hiring representatives
for their location, including deciding what recruiting methods and applicant
screening tools to use. All six sites used some combination of conventional
recruiting methods, such as newspaper advertisements and college campus
recruiting. To determine the suitability of applicants, beyond the basic
qualifications for the position, 14 officials at four sites interviewed
applicants before hiring them, and most used interview techniques to
determine how applicants might behave in typical work
14 Basic qualifications were 1 year of customer- service- related experience
or a 4- year college degree. Call Sites Faced
Challenges in Implementing Human Capital Practices
Job Characteristics Affected Efforts to Recruit Suitable Representatives
Page 14 GAO- 01- 144. IRS Human Capital Management
situations. 15 Two of these four sites also administered a five- question,
taxrelated math test to assess a candidate's basic math and analytical
skills.
In an effort to improve its recruiting for customer service representatives,
IRS is in the early stages of developing a national recruiting strategy. As
part of this plan, IRS is determining where it should target its recruiting
efforts. IRS is identifying sites where IRS' salary and benefits make it a
competitive employer in the local job market and sites that have trouble
recruiting and retaining suitable applicants. Officials believe this will
help IRS determine which sites should be growth sites for hiring telephone
customer service representatives.
According to officials at the call sites we visited, the many obstacles that
affected their ability to train customer service representatives and keep
them proficient included
the broad range of complex topics representatives must address,
inadequate resources,
the cyclical nature of taxpayer demand,
reassignment of tax topics among representatives, and
the lack of a formal mechanism to identify individual refresher training
needs.
Each year, IRS must train thousands of customer service representatives in a
broad range of topics, and according to officials at the six sites we
visited, they sometimes had to do so without adequate resources. Topics
range from the status of refunds to more complicated issues such as capital
gains or losses. In fiscal year 1999, the standard training curriculum
provided by all sites generally included periods of classroom instruction,
followed by periods of on- the- job training that were roughly half the
length of the classroom instruction. This training was delivered
incrementally over a 3- year period, 16 between the busy filing seasons,
during which IRS
15 One site that did not interview applicants hired primarily from within
IRS. Officials did not think interviews were necessary because they had
access to IRS- prepared performance assessments, and they could talk to the
applicants' supervisors. Officials at the other site did not interview
because, based on previous site experience, only a few of the applicants
hired without interviews were unable to do customer service work.
16 The classroom instruction totaled over 300 hours- 132 hours in the first
year; 87 in the second year; and 92 in the third year. All Sites Experienced
Challenges in Training Representatives and Keeping Them Proficient
Page 15 GAO- 01- 144. IRS Human Capital Management
receives the bulk of its toll- free calls. The training program also
included annual tax law/ procedural update training. However, after customer
service representatives received their initial training, they generally did
not receive subsequent refresher training despite the cyclical nature of the
work.
Officials also cited a shortage of instructors, limited training time, and
outdated training materials as other factors that affected their ability to
effectively train customer service representatives. For example, officials
at the one site that did not hire the number of representatives authorized
said they did not have enough instructors to provide the necessary training.
Officials at three sites said that they did not have sufficient time to
fully train representatives before their peak season because they did not
receive timely notice of when, and how many, they could hire. Officials at
four sites also said that training materials provided by the National Office
were frequently outdated.
Keeping customer service representatives proficient was also a challenge for
the sites due to the cyclical nature of taxpayer demand and changes to the
topics representatives were expected to know. The frequency of the calls and
the topics covered varied throughout the year. The bulk of the calls are
generally received during the busy filing season. For example, more than
57.6 of the 79.6 million toll- free calls made to IRS in fiscal year 2000,
or 72 percent were made from January through June. In addition, calls
received from January through April predominantly involved tax law topics,
while calls received after April mainly involved account- and refund-
related topics. Consequently, customer service representatives could go long
periods, such as months between filing seasons or even years since topic
training was completed, without receiving calls to reinforce their
experience on some of the topics for which they were trained. Moreover, this
situation was compounded when IRS implemented centralized call routing in
1999. In conjunction with this change, IRS consolidated the number of
subject categories, which ranged from 40 to 125 depending on the site, and
reassigned representatives to a broader group of 31 categories. This was
done without ensuring that they had adequate training or experience. 17
According to a site official, inadequate training is one factor reducing the
accuracy of IRS responses to tax law
17 Our report about telephone customer service during the 2000 filing season
will discuss skill gaps in greater detail. We expect that report to be
issued later this year.
Page 16 GAO- 01- 144. IRS Human Capital Management
and account calls. From 1998 to 1999, for example, network accuracy for
account calls decreased from 87.9 to 81.7 percent, according to IRS' weekly
customer service snapshot report dated September 30, 1999.
Officials at the sites we visited also said that the lack of a formal
mechanism to identify which representatives needed refresher training
hindered their ability to keep their representatives proficient. Officials
have records of specific training each representative has received, but they
do not have a method for assessing individual competency gaps- i. e.,
between knowledge and skills needed to respond to calls and current
proficiency- to quantify each representative's refresher training needs.
Although IRS had developed such a system and began using it in December
1998, a customer service training official said testing was not done
consistently among the call sites, and refresher training was not provided
to meet identified needs. The official also said a lack of funding and
uncertainty of future organizational developments led IRS to discontinue the
system in 1999.
Because IRS does not have a system for assessing competency gaps to identify
the specific refresher training needs of individual representatives, call
sites waste scarce training resources trying to improve the performance of
customer service representatives. For example, officials said they sometimes
send groups of representatives to refresher training, knowing that some
representatives will probably receive training they do not need. This
happens because the course covers several subjects and each representative
probably needs some of the training but most representatives probably do not
need all of the training. Providing unnecessary training wastes resources
that would otherwise be available for representatives who need additional
training.
Other studies identified similar IRS training issues. According to a March
1999 TIGTA report on its survey of IRS call sites, the managers at 15 of 20
call sites surveyed expressed moderate- to- high levels of dissatisfaction
with the timing, duration, and quality of customer service representative
training. 18 Similarly, the representatives ranked training as their highest
concern among 12 issues covered by IRS' 1999 employee satisfaction survey.
Moreover, in his May 2000 comments on a recently completed customer service
employee feedback report, the Commissioner of Internal
18 Survey of Internal Revenue Service Call Sites (TIGTA, Mar. 1999).
Page 17 GAO- 01- 144. IRS Human Capital Management
Revenue recognized the training challenges call site managers and employees
faced, stating that
“Fundamentally, we are attempting the impossible. We are expecting
employees and our managers to be trained in areas that are far too broad to
ever succeed, and our manuals and training courses are, therefore,
unmanageable in scope and complexity. The next step is to rethink what we
should do at each site in order to achieve greater site
specialization.” 19
Because of the problems involved in attempting to provide the full range of
training to all customer service representatives, in fiscal year 2000, IRS
began refocusing its program to provide just- in- time training, targeted
more to the specific types of questions taxpayers call about at different
times throughout the year. In addition, as part of restructuring, IRS
intends to further specialize training to serve specific taxpayer
groups– those who receive income from wages and investments and those
who receive income from small businesses or self- employment. IRS' training
related plans do not, however, address the need for identifying competency
gaps to determine refresher training needs and target training accordingly.
A National Office official informed us that IRS was working with the Office
of Personnel Management to “develop competency models, document career
paths, and develop assessment instruments for use in training, development,
selection, etc., for all of the occupations within the IRS.” Due to
the broad scope of this endeavor, however, the official could not say when
IRS could expect to establish and implement a mechanism for assessing the
refresher training needs of customer service representatives and ensuring
that the training is provided.
Despite its substantial investment in recruiting and training its network of
10,000 customer service representatives, and concern by National Office and
some site officials that attrition was higher than it should be, IRS was not
actively monitoring attrition and determining what steps, if any, were
needed to address it. Officials do not track how many representatives leave,
why they leave, or where they go- data that would be key to a strategy for
decreasing attrition. A recent study of experiences at 186 call centers
indicates that attrition is a major problem for the industry that is
expected to worsen. Some of the organizations we contacted as part of our
19 Charles O. Rossotti, “Comments on Customer Service Employee
Feedback Report” (memorandum dated May 25, 2000). IRS Did Not Monitor
Reasons for Call Center Attrition to Determine How to Address It
Page 18 GAO- 01- 144. IRS Human Capital Management
August 2000 report, however, were not as concerned about their attrition.
They said most of their attrition was to other jobs within their
organization and thus benefited the overall organization.
None of the six sites we visited could provide attrition statistics for
customer service representatives for 1998 or 1999. Officials at four sites
provided estimates ranging from 13 to 19 percent per year; however, these
estimates were just their opinions- they were not based on data collected by
the site or the National Office. 20 Although IRS did not monitor attrition,
National Office officials and officials at three sites said that attrition
was a problem. Only one of the six sites had collected data to determine the
reasons why representatives left; officials at the remaining five sites and
the National Office had opinions about why representatives left. 21 In
addition, IRS did not monitor whether the representatives who left obtained
other jobs within or outside of IRS.
According to a call center industry retention study, 22 staff turnover has
been a long- time problem that is expected to worsen as the responsibilities
of customer service representatives are expanded to include responding to
Web- based customer inquiries in addition to the more customary avenues,
such as by telephone or correspondence. The study reported that call centers
generally lose about 62 percent of their full- time representatives within 2
years. The reasons for turnover included better employment opportunities
within the company, but outside the call center or outside the company;
better compensation; and better career opportunities. In order to reduce
their attrition rates, some companies were (1) providing more opportunities
for customer service representatives to develop and learn new skills and (2)
establishing strategies to avoid wasting time and
20 National Office officials provided lower nationwide attrition rates of
4.3 percent for 1998 and 3.6 percent projected for 1999, but these rates did
not include all attrition. For example, the official who calculated these
rates advised us that they did not include any attrition to other jobs
within IRS.
21 Examples included the stressful nature of the work, seasonal employment,
and better opportunities elsewhere. 22 Agent Staffing and Retention Study,
Final Report (Call Center Management Review, May 2000). The Call Center
Management Review, published monthly by the Incoming Calls Management
Institute, surveyed 771 U. S. call centers and received 186 responses (24-
percent response rate). Small, medium, and large call centers from more than
50 industries responded to the survey, which was completed in April 2000.
Page 19 GAO- 01- 144. IRS Human Capital Management
resources recruiting, hiring, and training representatives, only to lose
them to other organizations.
Some of the organizations included in our August 2000 report had high
attrition, but officials said that attrition from their call centers was
usually to other positions within their organizations. For example, at one
company, officials noted that policies to promote from within and encourage
employee mobility, allowed customer service representatives to move to more
senior positions within the company.
IRS faces challenges in effectively scheduling staff- that is, having the
right number, with the right skills, at the right time, at each call site-
due to inaccurate demand forecasting and a complicated staff scheduling
process. During the first 6 months of fiscal year 2000, IRS data indicated
that for 60 percent of the time call sites were overstaffed or understaffed
compared to tolerances established by IRS. In addition, IRS' method for
measuring call sites' adherence to their schedules was incomplete.
Recognizing its problems with forecasting and scheduling, IRS was adapting
an automated system similar to those used by other organizations.
Inaccurate forecasting of the expected fiscal year 2000 toll- free call
volume led to inefficient scheduling and use of staff at some sites. The
Operations Center estimated that IRS would receive 100 million calls in
fiscal year 2000, but IRS actually received about 80 million- 20 percent
less than forecasted. Because individual site staffing requirements were
based on IRS' forecasts of the expected numbers, types, and timing of calls,
network and individual site work plans were also overstated, resulting in
the underutilization of staff at some sites. For example, according to
TIGTA's March 2000 report, for the period December 5, 1998, through March
15, 1999, overstated call demand resulted in staff being scheduled and ready
to take calls, but getting no calls, an average of 10 percent of their time
at six sites for which data were available. 23
23 Toll- Free Telephone Service Levels Declined in 1999 Despite Costly
Efforts to Achieve World Class Performance (TIGTA, Mar. 2000). TIGTA
reported that those staff also averaged 49 percent of their time taking
calls, 9 percent wrapping up after calls, and 33 percent idle (not available
to take calls) due to reasons such as lunch, breaks, meetings, and other
events. IRS Was Adapting a
Commercial System to Address Inaccurate Call Demand Forecasting and Staff
Scheduling Difficulties
Page 20 GAO- 01- 144. IRS Human Capital Management
Operations Center officials stated that IRS' increased use of new routing
technologies, combined with continuous organizational and procedural
changes, made accurate forecasting difficult. Moreover, they believed the
information that IRS had about historical demand was of limited value in
predicting future demand for two reasons. First, the historical information
was not based on operating 24 hours a day; and second, it was difficult to
take into account the constantly changing environment (i. e., tax law
changes and increased use of electronic filing and Web- based services).
However, the Directors of Customer Account Services, whose staffs have
responsibility for providing telephone customer service to wage and
investment and small business and self- employed taxpayers, stated that
demand forecasting should improve now that IRS has 2 years of information
based on operating 24 hours a day.
Managers at most of the sites we visited stated that the complicated
scheduling process made it difficult to ensure that the appropriate staff
were scheduled to work at the right times. They were also concerned about
the amount of time they spent scheduling and rescheduling staff in
attempting to ensure that they had scheduled the number of staff with the
skills the Operations Center prescribed for each half- hour increment of
service time. IRS management had not developed a standard system for the
sites to use in helping them to develop their site schedules. As a result,
each site we visited used its own system to track variables related to each
customer service representative, such as the specific work schedule
agreement, planned vacation and training, and skill level in answering
certain types of calls. Site managers then used these variables to develop
site schedules. Managers explained that the large number of variables to
consider when doing so (e. g., more than 160 different work schedules at one
site) complicated the scheduling process and made it difficult for them to
optimize their day- to- day efforts to meet the staffing requirements
prescribed by the Operations Center. IRS' own statistics bear this out. At
the times IRS measured, call centers were either understaffed or
overstaffed, compared with the Operations Center's prescribed staffing
schedule, 60 percent of the time- 24 percent and 36 percent, respectively,
during the first 6 months of fiscal year 2000. In measuring site adherence
to its prescribed staffing requirements, the Operations Center considers
variances of more than 10 percent (of the total number required to be ready
for each half- hour period) as overstaffing or understaffing.
The Operations Center only partially measures each site's ability to meet
the prescribed staffing requirements. The current measurement system
determines if each site had, on average, the required number of customer
Page 21 GAO- 01- 144. IRS Human Capital Management
service representatives available to answer the telephone for each halfhour
period. 24 However, the Operations Center did not measure the extent to
which sites provided representatives with the required skills.
IRS is working with a contractor to refine a commercially available
automated system to facilitate forecasting demand, scheduling staff, and
tracking adherence to the schedule. 25 The system is expected to use
historical data to more accurately forecast call demand (volume, type, and
timing of calls) and to centrally compare information on site staff
resources (e. g., availability and skills) in relation to forecasted demand
to help ensure that network staffing schedules make optimum use of available
site staffing. This system is also expected to identify individual site
staffing options for meeting network requirements, thus reducing the amount
of time site managers spend on scheduling staff.
According to Operations Center officials, the contractor was still refining
the commercial version of the system because it was not designed to handle
the size and complexity of IRS' toll- free operations (e. g., the number of
call sites and customer service representatives and the range of topics).
According to the project leader responsible for this system, both system
hardware and software were in place at all call centers prior to October
2000, but the software is not yet fully operational. Even though IRS now has
2 years of information based on operating 24 hours a day, it did not gather
that data in a consistent format. The system's forecasting and scheduling
capability will not be usable until IRS has collected at least 1 year of
call demand data in a consistent format. The project leader was not sure
when IRS would have these data because data collection efforts were delayed
in order to make changes that would allow IRS to capture more data than
originally planned and in a reconfigured format. Also, the planned transfer
of certain functions from the Philadelphia Service Center to the Operations
Center was more than a year behind schedule in October 2000. Moreover, the
project leader said IRS' restructuring could cause further delays in
achieving full system capability.
24 Sites are considered to have met the prescribed total staffing
requirement for the half hour (i. e., for all subjects, combined), if the
number of representatives available and ready to take calls is within 90 to
110 percent of the requirement.
25 The automated system is called the Tele- Center Workforce Management
System.
Page 22 GAO- 01- 144. IRS Human Capital Management
Other organizations included in our August report used an automated system
similar to the one IRS is implementing. For example, one company used an
automated system to identify its short- and long- term staffing
requirements. The system assisted call center managers in forecasting call
demands and scheduling staff to meet the demands. Officials said the system
also enabled the company to significantly reduce the time needed to perform
these tasks. It forecasted call demand down to half- hour intervals, based
on historical data trends. Considering various assumptions about call
patterns and information such as the number of customer service
representatives available to take calls, on leave, or in training, the
system also generated a staffing schedule. The schedules were reviewed daily
and adjusted as needed.
IRS also faces challenges in evaluating its human capital management
practices. According to our self- assessment checklist, all human capital
policies should be designed, implemented, and assessed by the standard of
how well they help the organization pursue its mission, goals, and
objectives. 26 While IRS evaluates its practices to make improvements in
some areas, such as recruiting or training, the evaluations do not assess
how individual or collective human capital policies and practices affect its
ability to achieve level- of- service goals. Its evaluations also generally
did not consider how improving practices in one area might affect other
areas. Unlike IRS, some organizations consider how their human capital
management practices affect their operational goals and how changing one
practice may affect another. Without expanding its evaluations to include
such analyses, IRS is unlikely to optimize the efficiency and effectiveness
of its toll- free operations.
Except for retention, 27 IRS evaluated its human capital practices, to some
extent, in most areas, including recruiting, training, and scheduling to
improve those areas. These evaluations generally focused on how each
practice could be improved for the next year. While these evaluations are
useful for making short- term adjustments, they do not provide a basis for
26 “ an organization's human capital policies must be aligned to
support the organization's shared vision- that is the mission, vision for
the future, core values, goals and objectives... All human capital policies
should be designed, implemented, and assessed by the standard of how well
they help the organization pursue its shared vision.” GAO/ OGC- 00-
14G, Sept. 2000, p. 2.
27 As discussed earlier, IRS was not monitoring attrition. Evaluations Do
Not
Consider How Human Capital Practices Affect Achieving Level- of- Service
Goals
Page 23 GAO- 01- 144. IRS Human Capital Management
strategic planning because they do not assess how human capital management
practices may need to be revised to support a long- term level- of- service
goal. Additionally, IRS evaluations generally do not consider how making
changes in one area affects other areas. For example, IRS evaluations of
recruiting did not consider how improving retention practices might reduce
attrition, decrease resources spent on recruiting and training new
employees, or increase the resources available for improving the skills and
productivity of existing employees.
Unlike IRS, other organizations have evaluated the effects of changes in one
human capital practice on other practices as well as on the overall results
of their telephone assistance operations. For example, one company used
training results to identify successful new hires. First, officials
determined the characteristics that recruits who did well during training
had in common. Then, the company changed its recruiting practices to
identify and hire similar people. The Incoming Calls Management Institute
recommended doing something similar- identify the personality traits and
skills of top performing customer service representatives and use those
traits to help assess persons applying for a representative position.
IRS faces significant challenges in managing its human capital to provide
telephone customer service to taxpayers. IRS has made or planned substantial
improvements to help meet these challenges, but further improvements are
needed. IRS will have difficulty improving its telephone service without
setting a long- term, desired service- level goal that is based on the needs
of taxpayers, as well as annual goals aimed at making progress toward
reaching its long- term goal. As the Government Performance and Results Act
and SSA experience suggest, IRS will also need support for its long- and
short- term goals from congressional stakeholders.
IRS' telephone customer service workforce represents a substantial human
capital investment in providing assistance to taxpayers. To get the most
from this investment, IRS must be able to (1) target scarce training
resources where they are most needed to optimize call center and network
performance, (2) minimize turnover of trained and experienced customer
service representatives to avoid unnecessary recruiting and training
expenditures and enhance productivity, and (3) determine how its individual
or collective human capital policies and practices affect its ability to
achieve customer service goals and how changes in one or more Conclusions
Page 24 GAO- 01- 144. IRS Human Capital Management
human capital management practices will affect other practices. However,
until IRS establishes a system for assessing competency gaps to identify the
refresher training needs of individual customer service representatives, it
cannot effectively target scarce training resources to meet individual
training needs. Without a system for monitoring attrition, identifying its
causes, and taking steps to address them, IRS cannot ensure that its
recruiting and training resources are used efficiently. And, unless IRS
considers its human capital management practices' contribution to achieving
overall service goals and considers the interrelationships among its toll-
free service human capital practices, it lacks a good basis for assessing
the soundness of those human capital practices.
We are recommending that the Commissioner of Internal Revenue take several
steps to improve IRS' human capital management practices related to
providing telephone customer service. Specifically, the Commissioner should
establish a long- term, desired service- level goal based on taxpayers'
needs, together with annual goals designed to make progress toward reaching
that long- term goal over time, and work with congressional and other
stakeholders to obtain their support and the resources needed to reach those
goals;
establish a system for assessing customer service representatives'
competency gaps and meeting the refresher training needs identified by the
assessments;
develop a system for monitoring call center attrition and identifying its
causes and use the information gathered from that system to develop, as
appropriate, strategies for dealing with the attrition of customer service
representatives; and
ensure that IRS' evaluations of human capital management practices consider
the effects of those practices on its ability to achieve longand short- term
customer service goals and the interrelationships among human capital
practices.
The Commissioner of Internal Revenue provided written comments on a draft of
this report in a January 12, 2001, letter, which is reprinted in appendix
II. We also met with senior IRS officials on January 4, 2001, to discuss our
draft report and to obtain updated information on IRS' new toll- free
measures and goals. The Commissioner agreed with our recommendations, which
he said should improve performance in this critical area. In addition, he
provided information summarizing IRS' efforts relating to each
recommendation and commented that IRS' efforts Recommendations for
Executive Action Agency Comments and Our Evaluation
Page 25 GAO- 01- 144. IRS Human Capital Management
reflected the constructive dialog between IRS and our staff. We incorporated
the new information and modified the report, where appropriate, to reflect
IRS efforts.
The Commissioner's letter stated that IRS had instituted an agencywide
strategic planning process in March 2000 that links the budget and available
resources to its strategies and improvement projects, but also recognized
the need to strengthen that new process. Toward this end, the Commissioner
stated that IRS' fiscal year 2002 Strategic Plan and Budget reflects a 74-
percent level- of- service goal, with a goal of reaching 85 to 90 percent by
fiscal year 2003. This plan was not yet available as we were preparing this
report. He also stated that an initiative was under way to improve workload
planning to ensure that customer needs are considered during the planning
and budgeting process. The Commissioner's letter did not say how the cited
workload planning initiative would identify and assess customer needs.
Based on the Commissioner's comments, significant efforts were under way or
planned to help ensure that customer service representatives will have the
competencies and training needed to respond to taxpayer calls. In addition
to the targeted training and planned specialization discussed in this
report, for example, IRS plans to establish competency- based recruiting and
retention methods to help ensure that IRS recruits and retains individuals
who are well- suited to telephone customer service work. The Commissioner's
comments also stated that IRS' competencybased management plans include the
use of “assessment instruments to identify training needs.”
These initiatives seem to be promising and may form a basis for identifying
individual refresher training needs and ensuring that these needs are met.
The Commissioner's comments also recognized the importance of retaining
skilled representatives. His comments identified several efforts that
focused on identifying employees that may be more likely to remain with IRS.
He did not comment on monitoring why employees leave or on using this
information to strengthen IRS' efforts to retain skilled representatives.
Regarding IRS' evaluations of its human capital practices, the
Commissioner's comments did not respond directly to the primary point of our
recommendation- that IRS evaluations should consider the effects of its
practices on its ability to achieve its long- and short- term customer
service goals. However, the Commissioner did say that IRS has embraced
Page 26 GAO- 01- 144. IRS Human Capital Management
our Human Capital Self- Assessment Checklist for Agency Leaders. IRS had
used it as a diagnostic tool in its recent review of its mid- and top- level
management realignment process and planned to use it again in fiscal year
2001 to “conduct an overview of the status of human capital practices
throughout the Service.” Our checklist provides a framework by which
agency leaders can develop informed views of their agencies' human capital
policies and practices. The Commissioner also objected to our comparing IRS'
1998 performance with performance in subsequent years, because of the many
changes to IRS' operating environment, such as enterprise call management
and 24- hour operations. This report compared IRS' reported tax law and
account accuracy in 1998 and 1999. As stated in our evaluation of the
Commissioner's comments on our 2000 filing season report, 28 we believe it
is appropriate to compare IRS' performance before and after the operational
changes mentioned above. In reevaluating the examples we used, however, we
decided to eliminate our reference to IRS' reported tax law accuracy because
we learned that the methods used to measure tax law accuracy changed in
1999, and thus, results may not be comparable.
As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days from
the date of this letter. At that time, we will send copies to the Ranking
Minority Member of the Subcommittee on Oversight; the Chairman and Ranking
Minority Member, Committee on Ways and Means; the Secretary of the Treasury;
the Commissioner of Internal Revenue; and Director, Office of Management and
Budget. We will also send copies to others upon request.
28 Tax Administration: Assessment of IRS' 2000 Tax Filing Season (GAO- 01-
158, Dec. 22, 2000).
Page 27 GAO- 01- 144. IRS Human Capital Management
If you have any questions, please call me at (202) 512- 9110 or Carl Harris
at (404) 679- 1900. Key contributors to this report are acknowledged in
appendix III.
Sincerely yours, Michael Brostek Director, Tax Issues
Appendix I: Organizations Contacted in Our August 2000 Report
Page 28 GAO- 01- 144. IRS Human Capital Management
Table 2 describes the organization, mission, and telephone center operations
of the private and public organizations that were included in the scope of
our August 2000 report. 1
Table 2: Telephone Customer Service Operations in Organizations We Visited
or Telephoned Organization Mission Telephone customer service operation
Allstate Insurance Company Multinational public company selling insurance
products. It has a customer base of more than 14 million households in the
United States and Canada.
Three call centers in Roanoke, VA; LaBrea, CA; and Jackson, MI, staffed by
about 1,150 customer service representatives, most of whom worked part-
time. The call centers provided after- hours support to insurance agents
nationwide. Toll- free telephone lines were open from 6 p. m. to 9 a. m. for
general information and to leave messages for agents. Allstate officials
said that they plan to expand call center operations to handle customer
sales and service in 2000. California Franchise Tax Board Administrator of
California's personal
income and bank and corporation tax law. Also responsible for nontax
programs, such as the homeowners and renters assistance program and
political reform act audits.
One centralized call center in Rancho Cordova, CA, was staffed by more than
300 telephone customer representatives, including supervisors. They were
assisted during busy times by cross- trained employees from the
correspondence section of the center and by former telephone customer
service employees working overtime. Toll- free telephone lines were open
from 7 a. m. to 8 p. m., Monday through Friday, and from 7 a. m. to 4 p. m.
on Saturday. During filing season, the hours were extended from 6 a. m. to
midnight, Monday through Friday, and from 7 a. m. to 4 p. m. on Saturdays
and holidays. The call center provided taxpayers with information on return
preparation, filing requirements, forms, refund status, and general tax law.
Canada Customs and Revenue Agency Canadian tax, customs, and trade
administrator. Also charged with redistribution of income through the
delivery of social and economic benefits.
Four call centers in Toronto, Montreal, and Vancouver, and the national 1-
800 Overflow Call Center in Ottawa, that responded to about 40 percent of
the general inquiries. Telephones were also answered at 42 other sites
throughout Canada where agents handled both telephone and walk- in
inquiries. Officials estimated that about 2,600 full- time- equivalent
positions were dedicated to telephone client services, providing taxpayers
with general and account- specific information on the programs administered
by the Canada Customs and Revenue Agency. Toll- free telephone lines were
open from 8: 15 a. m. to 5 p. m., Monday through Friday, for individual
taxpayers and from 8: 15 a. m. to 8 p. m. for business taxpayers. During the
2000 filing season, calls from all taxpayers were also taken from 9 a. m. to
1 p. m. on Saturdays and Sundays, and lines for individual taxpayers were
open until 10 p. m.
1 Customer Service: Human Capital Management at Selected Public and Private
Call Centers (GAO/ GGD- 00- 161, Aug. 22, 2000). Appendix I: Organizations
Contacted in Our
August 2000 Report
Appendix I: Organizations Contacted in Our August 2000 Report
Page 29 GAO- 01- 144. IRS Human Capital Management
Organization Mission Telephone customer service operation
General Electric Appliance Company a One of 11 core businesses of
General Electric. Manufactures appliances, including refrigerators, ranges,
dishwashers, microwave ovens, washing machines, dryers, water filtration
systems, and heating systems. Also provides repair and maintenance services
on appliances, operating a nationwide fleet of service vans.
A telephone hotline that provided consumers with product information and
responded to questions about repairs. The answer center, located in
Louisville, KY, handled about 2 million calls each year. About 200 telephone
customer service representatives responded to inquiries 24 hours a day, 7
days a week.
Hewlett- Packard Company a Designer, developer, and manufacturer of computer
products, including personal computers, printers, computer workstations, and
a range of hardware and software.
The Hewlett- Packard Company Executive Customer Advocacy Group provided
support for customers contacting Corporate Headquarters regarding issues or
concerns with products and services. The hotline was located in Palo Alto,
CA. It operated from 8 a. m. to 5 p. m., Monday through Friday, with a staff
of about 22 full- timeequivalent employees who were Hewlett- Packard Company
retirees in part- time positions. Illinois Department of Revenue Collects
taxes for the state and its
local governments, including income and business taxes on individuals and
businesses, income and sales taxes, taxes on public utilities, tobacco and
liquor, motor fuels and vehicles. The department also administers tax relief
programs for the elderly and disabled and provides property assessments
among the state's counties.
One call center in Springfield, IL, was staffed by 34 fulltime telephone
customer service representatives, who were assisted during busy times by
cross- trained employees from other areas within the taxpayer assistance
division. Toll- free telephone lines were open from 8 a. m. to 5 p. m.,
Monday through Friday, with extended weekday hours and one Saturday opening
during filing season. Automated service was available 24 hours a day, 7 days
a week. The call center provided taxpayers with help in completing their
returns and answered questions about taxes, returns, bills, and notices that
had been filed. International Business Machines, Inc. a Designer, developer,
and
manufacturer of information technologies, including computer systems,
software, networking systems, storage devices, and microelectronics.
In the Product Sales and Service Division, about 6, 900 telephone customer
service employees provided information on product sales and service. Call
centers operated 24 hours a day, 7 days a week.
Kaiser- Permanente America's largest not- for- profit health maintenance
organization, serving over 8 million members in 17 states and the District
of Columbia. An integrated health delivery system, Kaiser Permanente
organizes and provides or coordinates members' care, including preventive
care, hospital and medical services, and pharmacy services.
Kaiser Permanente had 17 call centers nationwide, with 12 centers located in
California, the largest region. Regional call centers operated
independently. The California region, where we visited, had 5.9 million
members, while other regions had fewer than 1 million members each. The two
largest call centers were located in Stockton and Corona, CA. Together, they
employed about 475 telephone customer service representatives and about 80
management and support staff. Hours of operation were 7 a. m. to 7 p. m., 7
days a week. The member service call centers provided answers to questions
on health planrelated topics, including benefits, copayments, claims,
Medicare, eligibility, available services, and physician information.
Appendix I: Organizations Contacted in Our August 2000 Report
Page 30 GAO- 01- 144. IRS Human Capital Management
Organization Mission Telephone customer service operation
Social Security Administration Manages the nation's social insurance
program, consisting of retirement, survivors, and disability insurance and
supplemental security income benefits for the aged, blind, and disabled.
Also assigns Social Security Numbers to U. S. citizens and maintains
earnings records for workers under these numbers.
Thirty- six call centers nationwide were staffed by 3,100 full- time, 700
part- time, and up to 60 percent of about 4,100 spike b employees who were
available to assist at busy times. Toll- free telephone lines were open from
7 a. m. to 7 p. m., Monday through Friday, to answer callers' questions
about Social Security benefits and programs.
United Parcel Service World's largest package distribution company, it
transports more than 3 billion parcels and documents annually.
Nine call centers nationwide were staffed by over 6,800 customer service
representatives. Eight centers were open from 7 a. m. to 9 p. m., Monday
through Friday. One center in San Antonio, TX, operated 24 hours a day, 7
days a week. Seven of the nine call centers were staffed by contract
employees. The Newport News, VA, call center, which was a contract facility
we visited, had 230 representatives who handled calls related to pick- up,
tracking, and claims. Utah State Tax Commission a Coordinator of Utah taxes
and fees,
including taxes on income, sales, property, motor vehicles, fuel, beer, and
cigarettes.
Three call centers- a main call center, motor vehicle center, and collection
center- operated weekdays from 8 a. m. to 5 p. m. with about 35 telephone
customer service representatives. The call centers responded to about 15,000
to 20,000 inquiries a month dealing with a range of questions on programs
administered by the Commission. a For these organizations, we conducted a
telephone interview in which we asked managers of
telephone customer service operations several key semistructured interview
questions. However, we did not have detailed discussions with officials and
employees at various levels of the organizations. b ”Spikes” are
employees who work in program service centers on specific jobs, such as
processing benefit claims, but who are cross- trained to answer telephone
inquiries and can be diverted from their regular work to answer telephones
when call volumes are high.
Source: GAO compilation of data provided by the organizations visited.
We judgmentally selected the organizations to visit and telephone by
reviewing literature on innovations in human capital management and by
obtaining opinions from experts on what organizations they thought provided
noteworthy or innovative human capital management in their call center
operations. We chose telephone customer service operations that dealt with
tax questions or specific subjects, such as benefits, investments, and
installation and operation of technical equipment, that were comparable in
complexity to tax issues addressed by IRS customer service representatives.
Specifically, the director for Workplace Quality at the U. S. Office of
Personnel Management identified the SSA telephone customer service operation
as a public sector organization that is known for effective human capital
management. We visited the Illinois and California State tax agencies and
telephoned the Utah State Tax Commission on the basis of
Appendix I: Organizations Contacted in Our August 2000 Report
Page 31 GAO- 01- 144. IRS Human Capital Management
recommendations of an official from the Federation of Tax Administrators.
The Canada Customs and Revenue Agency was cited in literature as having an
internationally recognized reputation for highquality taxpayer service and
had participated- along with IRS and the tax agencies of Australia and
Japan, members of the Pacific Association of Tax Administrators, in a
benchmarking study of customer service best practices.
Two private sector companies we visited- Kaiser Permanente and Allstate
Insurance- were selected in consultation with the executive director of the
Private Sector Council. The Council, with membership including about 50
major U. S. corporations, seeks to improve the productivity, management, and
efficiency of government through cooperation with the private sector.
Members volunteer expertise to government agencies by participating with
them in projects that are coordinated through the Council. The other private
organization we visited, the United Parcel Service, was selected in follow-
up to our participation in a congressional delegation and IRS visit to its
Atlanta, GA, headquarters to discuss human capital and telephone customer
service issues.
The private call centers we telephoned- General Electric (GE) Answer Center,
Hewlett- Packard Company Executive Customer Advocacy Group, and
International Business Machines (IBM) Business Product Division, and/ or
their parent corporations- were cited in best practices literature for their
effective human capital management.
Appendix II: Comments From the Internal Revenue Service
Page 32 GAO- 01- 144. IRS Human Capital Management
Appendix II: Comments From the Internal Revenue Service
Appendix II: Comments From the Internal Revenue Service
Page 33 GAO- 01- 144. IRS Human Capital Management
Appendix II: Comments From the Internal Revenue Service
Page 34 GAO- 01- 144. IRS Human Capital Management
Appendix II: Comments From the Internal Revenue Service
Page 35 GAO- 01- 144. IRS Human Capital Management
Appendix II: Comments From the Internal Revenue Service
Page 36 GAO- 01- 144. IRS Human Capital Management
Appendix III: GAO Contacts and Staff Acknowledgments
Page 37 GAO- 01- 144. IRS Human Capital Management
Michael Brostek (202) 512- 9110 Alton C. Harris (404) 679- 1900
In addition to those named above, Robert Arcenia, Ronald Heisterkamp, Mary
Jo Lewnard, and Shellee Soliday made key contributions to this report.
Appendix III: GAO Contacts and Staff
Acknowledgments GAO Contacts Acknowledgments
(268886)
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