AI translation breakthrough of global leader in customer-service centres

Alorica, a global leader in customer-service centers based in Irvine, California, is making strides in harnessing artificial intelligence to enhance its operations. Imagine a customer service centre that can communicate in any language you speak, according to an Associated Press report,.

 Alorica, a California-based company with customer-service centres globally, has rolled out an AI translation tool enabling its representatives to interact with customers in 200 languages and 75 dialects.

This means an Alorica agent fluent only in Spanish can assist a Cantonese speaker in Hong Kong with issues like printer malfunctions or banking errors without needing to speak Cantonese themselves. The transformative power of AI is evident here, but it also raises concerns about potential job losses as chatbots could handle tasks traditionally managed by humans. However, Alorica isn’t cutting jobs; in fact, it continues to expand its workforce.

The situation at Alorica, alongside other companies like IKEA, suggests that AI may not be the job destroyer some anticipate. Instead, it might follow the pattern of past technological advancements such as the steam engine, electricity, and the Internet—displacing some jobs but creating others and increasing overall productivity. 

Nick Bunker, an economist at the Indeed Hiring Lab, believes that AI will influence many jobs, potentially all jobs indirectly, but does not foresee it leading to mass unemployment. Historically, major technological shifts have disrupted the job market but also generated new employment opportunities. AI’s essence lies in its ability to perform tasks that were once thought to require human intelligence. Early versions of AI emerged in the 1950s with programs like the Logic Theorist at Carnegie Mellon University.

More recent advancements include voice assistants like Siri and Alexa and IBM’s Deep Blue, which famously defeated world chess champion Garry Kasparov in 1997. AI truly entered the public eye in 2022 with the introduction of ChatGPT by OpenAI. This generative AI tool can hold conversations, write code, compose music, and produce a range of content, raising concerns about its potential to replace various jobs, from freelance writers to customer-service representatives and beyond. “AI is set to eliminate many existing jobs and alter how numerous jobs function,” Sam Altman, CEO of OpenAI, stated during a May discussion at the Massachusetts Institute of Technology. 

Despite these concerns, the anticipated widespread replacement of service workers by AI chatbots, similar to the impact of physical robots on factory and warehouse jobs, has not materialized on a large scale—at least not yet. It may never become a reality. The White House Council of Economic Advisers reported last month that there is “little evidence” that AI will negatively affect overall employment. Historical patterns show that technology usually boosts productivity, accelerates economic growth, and leads to the creation of new job categories in unforeseen ways.

They referenced a study by MIT economist David Autor, which found that 60 per cent of the jobs held by Americans in 2018 did not exist in 1940, having been created by technologies that emerged later. Outplacement firm Challenger, Gray & Christmas, which monitors job cuts, has not observed significant layoffs directly attributed to AI-driven labor-saving measures. “I don’t think we’ve seen companies reporting substantial cost savings or job cuts due to AI yet,” said Andy Challenger from the firm. 

“That may change in the future, but it hasn’t happened so far.” Nonetheless, the apprehension about AI posing a serious threat to certain job sectors is not without basis. For instance, Suumit Shah, an Indian entrepreneur, drew attention last year by revealing that he had replaced 90 per cent of his customer support staff with an AI chatbot named Lina. This move significantly reduced response times and problem resolution durations, cutting customer support costs by 85 per cent. “It’s all about AI’s ability to handle complex queries with precision,” Shah stated.

Shah’s company, Dukaan, which helps users set up e-commerce sites, has also integrated AI into sales and analytics, experiencing efficiency improvements likened to “upgrading from a Corolla to a Tesla.” In a similar vein, a study by Harvard Business School, the German Institute for Economic Research, and London’s Imperial College Business School found that job postings for writers, coders, and artists declined within eight months of ChatGPT’s introduction. A 2023 study by Princeton, the University of Pennsylvania, and NYU identified telemarketers and language teachers as the most exposed to ChatGPT-like models. However, AI exposure doesn’t necessarily equate to job loss; it can also handle routine tasks, allowing people to focus on more creative work. 

For example, IKEA implemented a customer-service chatbot in 2021 to manage simple inquiries. Instead of reducing jobs, IKEA retrained 8,500 customer-service workers to tackle complex customer issues and offer design advice. Chatbots can enhance worker efficiency rather than replace it. A study by Erik Brynjolfsson of Stanford University and Danielle Li and Lindsey Raymond of MIT found that a generative AI-based assistant helped 5,200 customer-support agents at a Fortune 500 company by providing useful suggestions and relevant internal documents. The study revealed that employees using the chatbot were 14 per cent more productive compared to their peers who did not use the technology. 

These workers managed to handle more calls and resolve them more swiftly, with the most significant productivity improvements—34 per cent - seen among the least experienced and least skilled workers. At an Alorica call center in Albuquerque, New Mexico, a customer-service representative who previously struggled to access necessary information saw her "handle time"—the duration needed to resolve customer calls—reduce from an average of 14 minutes per call to just over seven minutes after receiving training on AI tools. 

Over six months, AI tools enabled a group of 850 Alorica representatives to cut their average handle time from just over eight minutes to six minutes, allowing them to take 10 calls per hour instead of eight—resulting in an additional 16 calls in an eight-hour shift. The AI tools also help Alorica agents quickly retrieve customer information, such as order history or previous call attempts. 

For instance, if a customer complains about receiving the wrong product, an agent can swiftly process a replacement, often resolving the issue within 30 seconds. Alorica is also implementing its Real-time Voice Language Translation tool, which enables customers and agents to communicate in their preferred languages. This advancement means Alorica no longer needs to hire externally for specific language skills.

Despite these technological advancements, Alorica is not reducing its workforce. The company is actively recruiting new employees, particularly those adept with new technology. “We are still actively hiring,” says Rene Paiz, a vice president of customer service. “There is still a lot of work to be done.”