Pepper robot assistant with information screen.
PHOTO: VTT Studio

It’s true. Artificial Intelligence takes over jobs once held by human agents.

At contact centers, where rows of agents are charged with providing answers and support to customers, AI-powered tech like conversational AI can perform the same function.

And it's growing. In a new report, Gartner predicts contact centers will spend nearly $2 million on conversational AI enhancements this year — and that investment is expected to pay off big — with an estimated $80 billion reduction in labor costs within four years.

But human workers need not worry. While many current duties may be relegated to AI — there is still work to do — and AI could enrich and improve the work of contact centers rather than rip and replace.

Robots Are Not Taking Over Contact Centers, Entirely

Sourabh Gupta, CEO of the voice AI platform Skit.ai, says the biggest myth about AI is that it is here to replace humans.

“AI-powered solutions are meant to lighten the workload of customer service employees and augment their work, rather than automate and take over their jobs entirely,” he said. “AI is more likely to take over specific tasks and activities that are currently performed by humans, making processes easier and more efficient, freeing humans from cognitively routine tasks and opening up new avenues for enriching their work. The most likely outcome of leveraging AI will be a collaboration between digital agents and humans.”

According to Gupta, AI investment is a "long game." While he (naturally) advocates the returns on investment far outweigh the costs, Gupta said there can be "a steep price to pay upfront." "It is important to work with providers who have agile delivery models and prioritize clear business objectives," he added.

While conversational clearly offers a plethora of benefits, it’s still in its youthful stage with plenty of room left for growth and maturity. Gartner researchers expect to see a “measured adoption” over the next two years.

“Implementing conversational AI requires expensive professional resources in areas such as data analytics, knowledge graphs and natural language understanding,” Gartner VP analyst Daniel O’Connell said. “Once built, the conversational AI capabilities must be continuously supported, updated and maintained, resulting in additional costs.”

Related Article: Can Conversational AI Improve the Online Retail Experience?

The AI Impact on Contact Centers

As the central hub for questions, complaints and service, contact centers are a critical component of good CX.

CMSWire recently reported that according to a PWC survey, nearly 80% of American consumers say that speed, convenience/ease-of-use, knowledgeable assistance and friendly service are the most important elements of a positive customer experience.

Of the approximately 17 million contact centers worldwide, O'Connell said many are plagued by staff shortages, while also remain under pressure to reduce labor costs — which can represent up to 95% of their expenses.

As opposed to traditional chatbots, conversational AI incorporates natural language processing (NLP) and machine learning (ML) to simulate human intelligence. It is certainly compelling, cost-wise, to replace a human with some form of conversational AI: the cost to replace a human agent with a conversational AI voice assistant is between $1,000-$2,000 per agent, according to Gartner researchers.

Through the use of augmented voice intelligence platforms, these AI assistants — modeled from human interactions — promise the ability to carry on “natural” conversations with their human customers, regardless of their accent, language or even a sudden change in topic.

Investors Rally for Enterprises That Offer AI

And vendors in the space are growing. Here's a look at some hot funding activity in the space:

  • In September, PolyAI, a company that refers to its voice assistants as “superhuman,” closed a $40 million Series B funding round bringing the total raised to $70 million and valuing the company at nearly $300 million.
  • Observe.AI, a conversation intelligence platform for contact centers, has raised $213 million in funding, with its latest round of Series C funding in 2022.
  • In August, AI customer service platform Aisera raised $90 million in Series D funding.
  • In June, Invoca, a conversational AI startup, raised $83 million in Series F equity funding.

Related Article: Real-Time AI: A Necessity for Great Customer Experiences

There Will Always Be a Need for Human Agents 

Compelling as the case to replace a human with conversational AI tech may be on paper, O’Connell doesn’t see job attrition as a primary piece of the story because of several considerations:

  • Finding qualified candidates is challenging: Many companies report the difficulty in recruiting, training and maintaining the required number of agents. Their goal is to make their current workforce more operationally efficient so that they do not need to hire more agents.
  • Demand will increase: Economic growth (at least long term, if not this year in particular), increased regulation, population growth and the complexity of life (navigating the minefields of verticals like healthcare, education and finance) are increasing demand for agents. So, while we may automate 30% of interactions by 2031, the demand will go up 10%.
  • High agent turnover: The rate of agent automation is incremental, not transformative. Agent turnover is typically high, maybe 33-50% per year, so companies will hire fewer agents as existing ones leave. Hence, we would not expect wide scale employment displacement as the workforce has time to adjust.

“Bottom line, this will not be anything like the displacement in the automotive industry, where we have a trend from gas engines to electric vehicles. There is no skillset disruption; companies will not be going out of business,” O’Connell said. “Of course, in the auto industry we may have 0% gas engines. But there will always be a need for human agents to answer the more complex questions that AI can’t handle. The process is gradual, a little bit each year. So as agents leave, you will hire a few less in return. And we don’t foresee any time when all interactions are handled by AI.”

Related Article: Top Conversational AI Metrics for CX Professionals

Collaborating With Conversational AI

Will AI offer a collaboration with human workers as opposed to replacing them? Some still remain skeptical — and perhaps even a bit scared of AI.

“I think that any time there is a new technology, it can cause controversy," Gupta said. "People naturally have reservations about new inventions when few facts are known about them. When it comes to voice AI, I’d say it is a combination of this reservation about the unknown, as well as inertia to move away from familiar experiences. There’s also the aspect of technology mimicking human behavior that can seem jarring at the outset."