United States General Accounting Office

GAO Report to the Chairman, Subcommittee

on Social Security, Committee on Ways

and Means, House of Representatives

June 1997 SOCIAL SECURITY

ADMINISTRATION

More Cost-Effective

Approaches Exist to

Further Improve

800-Number Service

GAO/HEHS-97-79

GAO United States

General Accounting Office

Washington, D.C. 20548

Health, Education, and

Human Services Division

B-271867 

June 11, 1997

The Honorable Jim Bunning

Chairman

Subcommittee on Social Security

Committee on Ways and Means

House of Representatives

Dear Mr. Chairman:

This report responds to your request that we identify (1) how well SSA’s 800 number provides

service to the public and (2) what steps SSA needs to take to ensure that improvements to the

800 number are cost-effective.

We will send copies of this report to the Commissioner of Social Security and other interested

parties. We will also make copies available to others upon request.

Please contact Cynthia Fagnoni, Associate Director, at (202) 512-7202, if you have any

questions. Other GAO contacts and major contributors to this report are listed in appendix IV.

Sincerely yours,

Jane L. Ross

Director, Income Security Issues
Executive Summary

Purpose The Social Security Administration (SSA) administers the nation’s largest

federal program—Social Security—as well as the largest cash welfare

program, Supplemental Security Income. In addition to administering

benefits, SSA records the wages of nearly every U.S. worker and issues new

and replacement Social Security cards. SSA’s programs touch the lives of

nearly every individual in this country. Each day, thousands of people

contact SSA to file claims for disability or retirement benefits, ensure that

their records are up to date, obtain a Social Security card, or ask questions

about SSA’s programs.

A major goal of SSA, set forth in its strategic planning documents, is to

provide world-class service to the public. To help reach this goal, SSA is

seeking to improve its toll-free 800-number service. Since the 800 number

became available to callers nationwide in 1989, SSA has struggled to keep

pace with caller demand, which grew from 41 million calls in fiscal year

1989 to 121 million in fiscal year 1995. In addition, once callers reach SSA’s

800 number, they may conduct only simple transactions such as ordering

Social Security card application forms or making appointments to file

benefit claims. SSA has initiatives under way to improve the 800-number

service, including improving callers’ access and expanding the range of

transactions that callers may initiate or complete with one call to the 800

number.

The Chairman of the Subcommittee on Social Security, Committee on

Ways and Means, House of Representatives, asked GAO to review (1) how

well SSA’s 800 number provides service to the public and (2) what steps SSA

needs to take to ensure that improvements to the 800 number are costeffective.

Background To ease the burden on its 1,300 field offices, SSA established teleservice

centers—each with its own telephone number and geographic

responsibility—that by 1988 were serving 50 percent of the population.

Concerned about staff reductions and field office workloads, and in

response to a GAO recommendation to improve the quality of its telephone

service, SSA established the nationwide 800 number using its existing

network of teleservice centers. As of January 1997, SSA employed over

4,000 representatives at 40 answering sites, which include 37 teleservice

centers ranging in size from 13 to 573 employees.

SSA thought callers to the 800 number would have basic questions about

SSA programs and would conduct simple business such as reporting

Page 2 GAO/HEHS-97-79 800-Number Service
Executive Summary

changes in benefit status. SSA hoped that the 800 number would replace its

local field office telephone service, still leaving more complex tasks, such

as filing claims, to field offices. After start-up problems with the 800

number resulted in high busy-signal rates, however, the Congress directed

SSA to restore telephone access to local field offices. Today, when calling

SSA, the public may call either the 800 number or one of SSA’s field offices.

SSA is seeking to improve and expand its 800-number service while facing

growing workloads and shrinking resources. As the baby boom generation

ages, more and more people will be applying for and receiving benefits.

SSA’s workloads will also grow because of increased responsibilities, such

as legislative requirements to review the continuing eligibility of SSI

beneficiaries resulting from the Personal Responsibility and Work

Opportunity Reconciliation Act of 1996.

Results in Brief Although SSA’s 800 number has consistently provided accurate and

courteous service to the public, callers have had difficulty getting through.

To address this problem, in early 1996 SSA increased the number of

representatives answering calls and implemented a new nationwide

automated menu. These efforts brought SSA closer to its goal of having

85 percent of callers get through to the 800 number within 5 minutes of

their first attempt. Not all callers who got through actually spoke to a

representative, however, or successfully used one of the automated

service options. Moreover, SSA came close to accomplishing its goal largely

by diverting SSA staff from work responsibilities unrelated to the 800

number. SSA’s plans include further increasing the percentage of callers

who get through to the 800 number within 5 minutes and expanding the

limited range of transactions that callers may complete using the

800-number service. As 800-number and other workloads continue to

grow, expanding services while maintaining access levels will challenge

SSA.

SSA’s plans do not sufficiently reflect lessons learned from the private and

public sectors on cost-effectively improving 800-number service. For

example, SSA could save a significant amount of money by automating

more of its routine transactions and by finding ways to verify callers’

identities using automated features. For those transactions deemed

complex enough to require personal assistance, private-sector leaders in

800-number service save money and enhance service by locating their call

agents at a few large centers. In contrast, SSA maintains a large number of

Page 3 GAO/HEHS-97-79 800-Number Service
Executive Summary

teleservice centers and has not developed a specific plan and timetable for

reducing the number of these centers.

Because SSA continues to offer customer service through its field offices, it

needs to carefully consider how changes, such as expanding the range of

transactions that callers may conduct or complete using the 800 number,

fit into and affect SSA’s overall service delivery strategy. For example, SSA

needs to compare the cost of conducting additional transactions using the

800 number with other service delivery methods to identify the most costeffective approach. SSA also needs to collect data for more fully assessing

how quickly and completely the 800 number serves customers. By

adopting the kind of 800-number initiatives used by some private- and

public-sector organizations, SSA could provide effective service while

controlling costs.

Principal Findings

Improving Access and

Service Will Challenge SSA

Ongoing, internal surveys and regular monitoring have consistently

indicated that SSA’s 800-number staff provide courteous and accurate

service and that customer satisfaction is high. Moreover, in an

independent study, SSA’s 800-number service received the highest overall

score among nine organizations considered to be the best in the business.

Meanwhile, SSA’s 800 number has never been able to keep up with caller

demand. Each year, the number of callers trying to reach the 800 number

has grown, while the percentage of callers actually reaching a call agent or

automated service has declined. Callers have had particular difficulty

getting through during peak calling periods.

SSA’s performance goal for fiscal year 1996 was to have 85 percent of

800-number callers reach the 800 number within 5 minutes of their first

try. To help reach this goal, SSA installed a new nationwide automated

menu and bolstered its call agent workforce in early 1996. Despite a few

technical problems, the percentage of callers who got through within 5

minutes increased from 74 percent in fiscal year 1995 to 83 percent in

fiscal year 1996—just short of SSA’s 85-percent goal. Getting through is not

the same as being served, however, and many callers who reached the 800

number hung up before speaking to a representative or completing an

automated transaction. Moreover, SSA increased access rates in large part

Page 4 GAO/HEHS-97-79 800-Number Service
Executive Summary

by diverting 2,300 employees from other work areas, causing these

employees’ usual work to accumulate.

SSA subsequently raised its access goal for fiscal year 1997 to having

95 percent of callers get through to the 800 number within 5 minutes. In

addition, SSA is planning to increase the number of transactions that can be

completed in one call, which will occupy telephone lines and reduce

customers’ access. With growing workloads and limited resources, SSA will

have difficulty improving access while adding services. To achieve its

access goal for fiscal year 1997, SSA plans to divert even more employees

from other duties to answer 800-number calls—an action that could cause

other workloads to accumulate.

SSA Must Take Certain

Steps to Cost-Effectively

Improve the 800 Number

SSA must take certain steps to cost-effectively improve its 800 number and

can draw from the experiences of other public and private 800-number

services to do so. For example, consistent with private-sector trends, SSA

could better use its automated menu to cost-effectively handle routine

calls. To identify transactions suitable for automation, SSA needs to

develop additional and more detailed data on the reasons for and

frequency of customer calls. At this time, the need to verify callers’

identities—to protect individuals’ privacy and prevent program fraud and

abuse—severely limits progress in automating many transactions.

To conduct transactions deemed too complex to automate, SSA could

follow the example of leading private-sector companies that have reduced

the operating and administrative costs of using live assistance by locating

their call agents in a few large call centers. SSA recognizes that its 800-

number service has too many teleservice centers but has not developed

concrete plans for reducing the number. Instead, SSA plans to continue

connecting its smaller centers together electronically, saving some money

by more efficiently routing calls to available representatives. Fewer

centers could provide further cost savings, such as reduced rent and

utilities and increased managerial control and staffing flexibility.

In making decisions about increasing callers’ ability to conduct and

complete more business through the 800 number, SSA needs to assess these

decisions’ overall effect on service delivery. Some companies primarily use

their 800 number to deliver services; SSA, however, continues to rely

heavily on its field office structure. Before adding new services, such as

claim filing, to the 800 number, SSA should carefully assess the impact of

this on its 800 number and other service delivery workloads and its

Page 5 GAO/HEHS-97-79 800-Number Service
Executive Summary

cost-effectiveness compared with other approaches. SSA does not now

collect enough information to compare the cost of providing services

through its 800 number with that of, for example, providing face-to-face or

telephone service at its field offices. Nor does SSA collect enough data for

measuring the impact of adding new services to the 800 number on the

promptness and completeness of customer service.

Recommendations To cost-effectively serve the public’s growing demand for SSA’s 800-number

services, we recommend that SSA (1) expand automated services,

(2) reduce the number of call centers, (3) compare the cost of expanding

the 800-number service with that of other approaches, and (4) establish

additional performance measures to more fully assess the impact of

expanding the service on its ability to effectively serve callers.

Agency Comments SSA generally agreed with the conclusions and recommendations in this

report, stating that the report would be useful to SSA as it further refines its

800-number service. SSA indicated, however, that 800-number callers may

not be willing to use automated services to the extent believed possible by

GAO. Because of the cost-effectiveness and growing public acceptance of

automated services, GAO believes that SSA needs to continue to seek ways

to expand 800-number automated services. SSA also noted that it has

progressed and will continue to progress toward consolidating its call

centers. GAO continues to believe that to provide cost-effective, live

assistance like that found in the private sector, SSA needs to develop a

more comprehensive and far-reaching plan for reducing the number of its

teleservice centers. SSA also made some technical comments about this

report, which were incorporated as appropriate. See chapter 4 for GAO’s

evaluation of SSA’s comments and appendix III for the full text of those

comments.

Page 6 GAO/HEHS-97-79 800-Number Service
Page 7 GAO/HEHS-97-79 800-Number Service
Contents

Executive Summary 2

Chapter 1 

Introduction

10

SSA’s 800 Number Is an Important Service Delivery Option 10

World-Class Service Goal Reflects SSA’s Customer Focus 12

Customer Focus Leads to 800-Number Improvement Efforts 13

Objectives, Scope, and Methodology 14

Chapter 2 

SSA Takes Steps to

Move Toward

5-Minute Access Goal

16

800-Number Service Has Historically Been Courteous and

Accurate but Busy-Signal Rates Were High

17

SSA Takes Steps to Improve Access 18

Improving 800-Number Service With Limited Resources Will

Challenge SSA

24

Chapter 3 

Steps Needed to

Cost-Effectively

Improve SSA’s 800

Number

26

Steps Needed to Expand Automated Services 26

SSA Needs a Cost-Effective Strategy for Providing Live

Assistance

30

Expanding Services Requires Carefully Assessing Costs and

Benefits

31

Chapter 4 

Conclusions,

Recommendations,

and Agency

Comments and Our

Evaluation

33

Conclusions 33

Recommendations 34

Agency Comments and Our Evaluation 34

Appendixes Appendix I: SSA Customer Service Pledge 36

Appendix II: Private-Sector Trends and Best Practices in

800-Number Service

37

Appendix III: Comments From the Social Security Administration 43

Appendix IV: GAO Contacts and Staff Acknowledgments 45

Bibliography 46

Page 8 GAO/HEHS-97-79 800-Number Service
Contents

Related GAO Products 48

Tables Table 2.1: SSA’s Performance Measures and Goals for Fiscal Year

1997

24

Table 3.1: Transaction Types Suitable for Automation 27

Figure Figure 2.1: 800-Number Automated Menu 20

Abbreviations

GPRA Government Performance and Results Act

HHS Department of Health and Human Services

IRS Internal Revenue Service

NPR National Performance Review

OMB Office of Management and Budget

PEBES Personal Earnings and Benefit Estimate Statement

SSA Social Security Administration

SSI Supplemental Security Income

Page 9 GAO/HEHS-97-79 800-Number Service
Chapter 1 

Introduction

SSA administers programs that touch the lives of nearly every individual in

this country. SSA administers the nation’s largest federal program—Social

Security—as well as the largest cash welfare program, Supplemental

Security Income (SSI). Social Security1

 provides benefits to retired and

disabled workers and their dependents and survivors; SSI provides

assistance to the needy, aged, blind, and disabled. SSA’s expenditures

totaled $386 billion in fiscal year 1996, almost one-fourth of this nation’s

$1.6 trillion federal budget. In 1996, over 50 million beneficiaries—nearly

one out of every five individuals in this country—received benefits from

SSA each month, and the numbers have been steadily growing. In

administering these programs, SSA records the wages of almost every U.S.

worker and issues new and replacement Social Security cards.

To better enable individuals to contact and conduct business with SSA, the

agency implemented a national, toll-free 800 telephone number in 1989.2

SSA provides this service through a nationwide network of 40 answering

sites, including 37 teleservice centers.3

 Callers may use the 800 number to

conduct simple transactions, such as requesting information about SSA

programs. Rather than use the 800 number, individuals may also call or

visit one of SSA’s 1,300 field offices.

SSA’s long-standing focus on customer service has been reinforced recently

by two governmentwide performance improvement initiatives—the

Government Performance and Results Act of 1993 (GPRA) and the

administration’s National Performance Review (NPR). To be consistent

with these initiatives and help guide its activities, SSA established a goal of

providing world-class service to the public as well as several performance

measures to support this goal. In response to growing public demand and

preference for using the 800 number, SSA has been particularly focused on

improving this service.

SSA’s 800 Number Is

an Important Service

Delivery Option

SSA’s responsibilities in managing the nation’s largest retirement, disability,

and welfare programs require SSA staff to deal directly with the American

public. Each day, thousands of people contact SSA—to file claims for

disability or retirement benefits, to ensure that their records are up to

1

The Social Security program administered under title II of the Social Security Act (42 U.S.C. 401 et

seq.) has two parts—Old Age and Survivors Insurance and Disability Insurance.

2

First established in 1988, SSA’s 800-number service was initially only available to 60 percent of the

population. SSA expanded the service to all callers nationwide in 1989.

3

SSA has three additional answering sites that are not dedicated teleservice centers but take

800-number calls on a part-time or provisional basis.

Page 10 GAO/HEHS-97-79 800-Number Service
Chapter 1 

Introduction

date, to obtain a Social Security card, or to ask questions about SSA’s

programs. Currently, about one-half of SSA’s 67,118 employees are frontline

workers who deal with the public. Traditionally, SSA staff have delivered

face-to-face services through a nationwide network of 1,300 field offices.

As the public began conducting more business by telephone, SSA

established local teleservice centers in large metropolitan areas to handle

general inquiries. By 1988, SSA was operating 34 teleservice centers

nationwide—each with its own telephone number for specific geographic

areas. These teleservice centers served about 50 percent of the population.

When SSA established the 800 number to improve its customer service, it

used the existing teleservice centers and opened three additional centers

to accommodate the increased call volume. In October 1989, SSA had about

3,100 employees, known as teleservice representatives, taking calls from

the public on the 800 number. The number of teleservice representatives

has since grown to about 4,000 located at 37 teleservice centers ranging in

size from 13 to 573 employees as of January 1997.

SSA’s 800-number service employees handle general inquiries and help

callers conduct simple transactions, such as reporting a change of address.

Individuals wishing to file claims for disability or retirement benefits—

which are more complex transactions—may make an appointment to do

so using the 800 number; currently, however, such individuals file their

claims either in person or by telephone with representatives at one of SSA’s

field offices.

SSA had originally intended for the 800 number to become its primary point

of telephone contact with the public. Public demand for the 800 number

quickly exceeded SSA’s expectations, however—call volumes were so high

that busy-signal rates reached 50 percent for several months. To help

reduce this volume of 800-number calls, SSA temporarily reestablished

direct telephone service for some field offices. Meanwhile, members of the

Congress grew concerned that the public would no longer have access to

local field office telephone service. As a result, in November 1990, the

Congress directed the Secretary of the Department of Health and Human

Services4

 (HHS) to restore telephone access to local offices. Today,

individuals wishing to contact SSA by telephone may call the 800 number or

a local SSA field office.

4

At the time, SSA was part of HHS. The Congress enacted legislation making SSA independent of the

Department as of Mar. 31, 1995.

Page 11 GAO/HEHS-97-79 800-Number Service
Chapter 1 

Introduction

World-Class Service

Goal Reflects SSA’s

Customer Focus

SSA’s 800-number telephone service reflects its long-standing focus on

customer service, and GPRA and NPR have reinforced this focus. A key

purpose of GPRA, enacted by the Congress in 1993, is to improve federal

program effectiveness and public accountability by promoting an

emphasis on results, service quality, and customer satisfaction. To help

accomplish this, the legislation requires federal agencies to establish

mission statements and goals, measure progress in accomplishing these

goals, and use the information obtained to adjust operations as needed to

accomplish these goals. GPRA required that the Office of Management and

Budget (OMB) select agencies to pilot test GPRA’s performance planning and

reporting requirements, and OMB chose SSA as a GPRA pilot agency.

The administration’s NPR also stresses the need for agencies to treat

members of the public like customers and improve customer service while

reducing costs. Begun in 1993 under the direction of Vice President Gore,

NPR has directed federal agencies to build a customer focus into their

operations to eliminate unnecessary bureaucracy, streamline processes,

and more cost-effectively serve the public. Also in 1993, President Clinton

issued Executive Order 12862, “Setting Customer Service Standards,”

which set a goal for the federal government to deliver service equal to the

best in business. The order directs federal agencies to survey their

customers, determine the kind of service they want and whether they are

getting it, and set and publish customer service standards.

Many of GPRA’s and NPR’s concepts are not new to SSA. Since 1984, for

example, SSA has routinely surveyed customers who recently contacted SSA

to ask about their experience and satisfaction with service provided. More

recently, SSA has been using focus groups to understand its customers’ and

employees’ views. Moreover, SSA’s strategic planning efforts predate GPRA

requirements. SSA published an agencywide strategic plan in 1991 that

established a goal of providing timely, accurate, and courteous service to

the public. The plan also established service delivery goals and objectives

for many aspects of SSA’s operations such as access to its 800-number

service and waiting times at field offices.

Bolstered by increased congressional and administration attention to

improving customer service, SSA has recently strengthened its focus on

customer service. SSA has, for example, established a set of customer

service standards and formulated a pledge describing what service

customers may expect when they contact SSA; field offices throughout the

country display this pledge. (See app. I for SSA’s current customer service

Page 12 GAO/HEHS-97-79 800-Number Service
Chapter 1 

Introduction

pledge.) In addition, SSA has revised its agencywide customer service goals

to focus on providing world-class service to the American public.

Customer Focus

Leads to 800-Number

Improvement Efforts

SSA’s efforts to meet customers’ demand and expectations for 800-number

service have led the agency to pay increased attention to improving this

service. Caller demand for the 800 number has grown steadily, with the

number of calls growing from over 41 million in fiscal year 1989 to over

121 million in fiscal year 1995. Moreover, SSA’s customer surveys have

revealed that customers increasingly prefer to conduct their business with

SSA by telephone and customers who previously contacted SSA by

telephone said that they would rather call SSA’s 800 number than one of

SSA’s field offices. SSA’s surveys have also indicated that customers would

like better access to the 800 number and to use the 800 number to conduct

more complex transactions such as filing claims.

Reflecting customer demand and preference for 800-number service, in

1994 SSA established a goal of having callers get through to the 800

number—that is, not get a busy signal—within 5 minutes of their first try.

This goal represented a considerable shift in emphasis toward improving

callers’ access since 1991, when SSA’s goal was having 800-number callers

get through within 24 hours of their first try. SSA also plans to address

customer expectations for improved 800-number service by expanding the

range of transactions, such as filing claims, that callers may initiate or

complete using the 800 number. Some of SSA’s current initiatives, such as

its plan to improve callers’ ability to complete transactions with one call,

have been guided by private-sector practices. For example, SSA

participated, along with several other government agencies, in an

NPR-sponsored benchmarking study that identified the best telephone

service practices of eight private-sector companies considered leaders in

customer service.

SSA is seeking to improve its 800-number service while it faces increased

workloads and responsibilities due to demographic trends and legislative

changes. Increased responsibilities will, in turn, place demands on SSA’s

service delivery structure, including the 800-number service. For example,

as the baby boom generation ages, the number of applicants for and

recipients of retirement benefits will increase, placing demands on the 800

number and other service delivery methods. SSA estimates that, by the year

2015, 50.4 million individuals will be receiving benefits—one-third more

than the 37.4 million receiving Social Security retirement and survivors

benefits in 1995. In addition, because of recent congressional efforts to

Page 13 GAO/HEHS-97-79 800-Number Service
Chapter 1 

Introduction

overhaul the nation’s welfare system, SSA will have to manage the large

influx of appeals and reapplications expected to result from changes in

benefit eligibility.5

 Finally, call volume will probably increase when SSA

begins to send 123 million records of earnings and estimates of future

benefits known as the Personal Earnings and Benefit Estimate Statement

to individuals aged 25 and older, which the agency must begin doing by

fiscal year 2000.6

 In the current fiscal environment, SSA is striving to

manage its growing workloads and responsibilities with fewer resources.

Objectives, Scope,

and Methodology

The Chairman of the Subcommittee on Social Security, Committee on

Ways and Means, House of Representatives, asked us to review SSA’s

efforts to improve its 800-number service. More specifically, in this report,

we address (1) how well SSA’s 800 number provides service to the public

and (2) what steps SSA needs to take to ensure that improvements to the

800 number are cost-effective. To develop information about SSA’s 800-

number performance and initiatives, we reviewed SSA studies,

performance data, and planning documents and interviewed responsible

officials at SSA headquarters. To better understand the impact on

workloads and operations of recent and future improvements to the

800-number service, we interviewed representatives at selected teleservice

centers in Baltimore, Maryland, and in Richmond and Salinas, California,

and at SSA’s Western Program Service Center in Richmond, California. We

also spoke with representatives of SSA’s employee groups, including the

American Federation of Government Employees, the National Council of

Social Security Management Associations, and a representative of the

Federal Managers’ Association.

We also examined 800-number trends and best practices in private-sector

companies and the Internal Revenue Service (IRS) to determine what

lessons SSA can draw from their experiences. We reviewed extensive

literature on 800-number trends and best practices and interviewed private

industry representatives and telecommunication experts and consultants.

We also interviewed IRS officials to discuss their 800-number operations

and efforts to automate 800-number transactions.

5

In 1996, the Congress enacted legislation that eliminates disability benefits for drug addicts and

alcoholics, restricts noncitizens’ SSI benefit eligibility, and tightens the SSA eligibility criteria for

disabled children.

6

These six-page statements supply workers with information about their yearly earnings on record at

SSA; information about their eligibility for Social Security retirement, survivor, and disability benefits;

and estimates of these benefits. See SSA Benefit Statements: Well Received by the Public but Difficult

to Comprehend (GAO/HEHS-97-19, Dec. 5, 1996).

Page 14 GAO/HEHS-97-79 800-Number Service
Chapter 1 

Introduction

Our audit work was conducted from April 1996 through May 1997 in

accordance with generally accepted government auditing standards.

Page 15 GAO/HEHS-97-79 800-Number Service
Chapter 2 

SSA Takes Steps to Move Toward 5-Minute

Access Goal

Through fiscal year 1995, SSA has had mixed results in providing worldclass 800-number service. On the one hand, studies have found that SSA’s

800-number teleservice representatives provide accurate and courteous

service to callers. On the other hand, 800-number callers have often

reached a busy signal instead of a teleservice representative or an

automated message service. To improve customer access to its 800-

number service, in early 1996 SSA greatly increased the number of

employees trained to answer 800-number calls and installed a nationwide

automated menu service that allowed callers to conduct transactions

without speaking to an SSA representative. These initiatives moved SSA

closer to its 5-minute access goal of having 85 percent of callers get

through to the 800 number within 5 minutes of their first try. However,

some callers SSA counted as getting through to the 800 number within 5

minutes actually hung up or waited for some time to speak to a

representative. Moreover, SSA’s strategy for improving access resulted in

some setbacks and costs. For example, a proportion of the additional

employees SSA trained to answer 800-number calls had been diverted from

other duties, causing these employees’ usual work—maintaining

beneficiary records—to accumulate.

SSA’s future plans for the 800 number include maintaining high levels of

accuracy and customer satisfaction, while further improving access to the

800-number service. Consistent with rising customer expectations, SSA also

plans to expand the number of transactions that customers may conduct

using the 800 number. For example, SSA would like to conduct pilot tests to

determine if callers want to file claims using the 800 number, rather than

just make appointments to file claims with a field office. With workloads

growing, reaching these goals will challenge SSA, especially since

expanding services will make improving access more difficult for SSA. To

help reach its goals, SSA plans to divert additional resources to the 800

number—a strategy that with limited resources may prove neither

sufficient nor sustainable for managing future 800-number improvements

without jeopardizing other critical customer demands.

Page 16 GAO/HEHS-97-79 800-Number Service
Chapter 2 

SSA Takes Steps to Move Toward 5-Minute

Access Goal

800-Number Service

Has Historically Been

Courteous and

Accurate but

Busy-Signal Rates

Were High

Various ongoing surveys conducted by SSA and others have consistently

shown that SSA’s 800-number teleservice representatives provide accurate

and courteous service to callers. Between April 1993 and September 1995,

internal monitoring of 800-number calls revealed that teleservice

representatives followed proper procedures for more than 81 percent of

calls; for those calls involving cash payments, teleservice representatives

made no errors for more than 93 percent of calls. In addition, SSA surveys

of 800-number callers repeatedly found that over 88 percent of callers had

been satisfied with the way their calls were handled, and 97 percent

believed they had been treated courteously. Even an independent and

unsolicited study found that compared with world-class service

organizations, SSA’s 800 number provides courteous service from

knowledgeable representatives. In April 1995, DALBAR, Inc., compared

SSA’s 800-number service with those of eight private companies (including

Federal Express, AT&T Universal Card, and Nordstrom) in several

qualitative and quantitative areas.7

 Although SSA did not perform well in

the quantitative areas (number of rings and time on hold), it rated high in

the qualitative areas (such as representatives’ attitude and knowledge),

giving SSA the highest overall score of all participating organizations.

Although some areas of SSA’s 800-number service got high marks, both the

DALBAR study and SSA recognized that many callers reached busy signals

instead of a teleservice representative or an automated service. Busysignal rates—which reflect the percentage of incoming calls that do not

get through to the 800 number—have been historically high, climbing from

under 33 percent in fiscal year 1990 to almost 50 percent in fiscal year

1995. SSA’s customers have had particular difficulty getting through to the

800 number during peak calling periods. These periods are generally

during the first 3 months of the year (when SSA typically sends

beneficiaries cost-of-living and tax-related documents), the first business

day of the month (when many beneficiaries are scheduled to receive their

checks from SSA), and the first workday of the week (typical for most

businesses). SSA is making some procedural changes to help reduce the

large volume of calls it gets at the beginning of each month.8

 In addition,

SSA has increasingly diverted employees from other duties, specifically,

maintaining beneficiary records, to help answer phones during peak

calling periods. This was done, in part, to help counter the high attrition

7

World-Class Benchmarks: An Evaluation of Non-Financial Service Providers, DALBAR, Inc., (Boston:

1995). DALBAR, Inc., is a financial services, research, and publishing firm that conducts phone and

mail surveys to research customer service.

8

SSA recently published regulations allowing the agency to send checks to new beneficiaries during

the second, third, and fourth weeks of the month rather than the first week of the month. SSA expects

to begin sending benefit checks on a staggered basis in June 1997.

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Access Goal

rate among SSA’s teleservice representatives.9 Despite these efforts,

busy-signal rates continued to grow.

SSA Takes Steps to

Improve Access

Persistently troubled by high busy-signal rates, SSA took decisive steps in

early 1996 toward reaching its goal of having 85 percent of callers get

through to the 800 number in 5 minutes. These steps included doubling the

800-number workforce, mainly by diverting a large number of employees

from other duties to help teleservice representatives on an as-needed basis

and establishing a nationwide automated menu allowing customers to

conduct certain transactions without speaking to a representative. Access

rates subsequently improved, largely due to increasing the number of

employees answering 800-number calls. SSA’s initiatives also experienced

setbacks and costs, however, such as paying the diverted employees

overtime to manage their usual workload.

SSA Doubles Trained

800-Number Workforce

To help reach its 5-minute access goal, SSA nearly doubled its 800-number

workforce. By January 1997, SSA had a total of about 7,400 employees

trained and available to handle 800-number calls. SSA managed this

increase in staff largely by training and diverting employees, referred to as

“Spikes,” from other SSA offices to help answer 800-number calls during

peak calling periods. SSA had already been diverting higher graded

employees from its program service centers as Spikes.10 Responsible for

handling complex changes to beneficiary records that can affect SSA

payments to beneficiaries, these employees required little additional

training to handle 800-number calls. SSA tripled the number of available,

trained Spikes—from just over 1,200 in fiscal year 1995 to 3,700 in early

1996—which included lower graded personnel from program service

centers.

SSA Implements a New

Automated Menu Service

In addition to enlarging its 800-number workforce, SSA hoped to improve

access by installing a new, nationwide automated menu. Before

establishing this menu, SSA offered an automated message service to about

60 percent of 800-number callers. Callers could request application forms

for a Social Security card or a Personal Earnings and Benefit Estimate

9

SSA has reported losing an average of one teleservice representative per day to attrition.

10SSA has six program service centers that as of Sept. 1996 employed 6,807 technical and clerical

employees and are primarily responsible for maintaining the records of Social Security benefits

recipients. The work of the program service centers includes initiating payment of benefits,

establishing the master benefit record, handling changes that affect benefit eligibility or amount, and

reconsidering initial decisions on benefit eligibility that claimants have appealed.

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Statement (PEBES), order a statement verifying benefit payments received

from Social Security, or listen to recorded information on Social Security

programs. In early 1996, SSA implemented a new automated menu service

that gave all 800-number callers (with Touch-Tone telephones) access to

three of the previously automated transactions plus two additional

ones—information on the closest field office location and a Medicare

option allowing callers to obtain local numbers to call with questions

about their Medicare equipment coverage, hospital expenses, and doctor

services. SSA enhanced its automated service in August 1996 to allow

rotary dial callers to choose transactions from the automated menu. In

December 1996, SSA added another transaction under the Medicare option

allowing callers to order a replacement Medicare card. SSA did not offer

the recorded information on Social Security programs provided previously

because callers had been using it infrequently.

The new automated menu also allowed 800-number callers to select one of

several specific topics about which they wished to speak to an SSA

representative. These callers would then be transferred or “gated” to an

appropriate SSA employee; for example, callers with questions on their

PEBES would be gated to an SSA unit trained to handle those questions. The

automated menu service available to callers in January 1997, including the

new Medicare replacement card option, is shown in figure 2.1.

Page 19 GAO/HEHS-97-79 800-Number Service
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Figure 2.1: 800-Number Automated

Menu

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Note: If the caller selects a default option or selects no option, the caller is automatically routed to

an SSA nonspecialist representative.

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SSA Moved Closer to

5-Minute Goal but Also

Had Setbacks

SSA’s initiatives, particularly the use of additional Spikes, resulted in more

callers getting through to the 800 number within 5 minutes of their first try.

The percentage of callers getting through within 5 minutes rose to

83 percent in fiscal year 1996 from 74 percent in fiscal year 1995. Although

both the additional staff and new automated menu probably helped more

callers get through, the additional staff had the more profound impact. The

highest rates of callers getting through coincided with the period during

which SSA diverted the largest number of Spikes to answer telephones.

In assessing its progress in meeting this goal, SSA is measuring access to

the system, not access to service. Specifically, SSA is measuring the

percentage of callers connected to the 800-number service within 5

minutes of their first try but stops the clock when callers are connected to

either an automated service or a teleservice representative or placed on

hold. Therefore, SSA’s performance measure does not capture the

percentage of callers who actually speak to a representative or complete

their business using an automated service. For fiscal year 1996, although

SSA counted 83 percent of callers as getting through to the 800 number

within 5 minutes, a smaller percentage actually spoke to a representative

or completed an automated transaction: the rest hung up before speaking

to a representative or completing their automated transaction.11 Nor does

SSA include in the 5-minute goal the amount of time that callers spend on

hold waiting to speak to a representative. In fiscal year 1996, the average

amount of time per month that callers waited to speak to a representative

ranged from almost 2 minutes to just over 4 minutes.

The diversion of a large number of employees to answer 800-number calls

created problems in other areas. As SSA expected, the usual work of the

program service centers accumulated while Spikes were handling 800-

number calls. According to SSA officials, program service centers had

ended previous fiscal years with about 2 weeks of work in progress or

“pending” work. For fiscal year 1996, SSA officials said the program service

centers finished the year with 3.5 weeks of pending work, despite program

service center employees working 840,000 hours of overtime to manage

their telephone duties while keeping the pending workload down. The

pending workload was somewhat less than SSA originally expected but still

a significant amount. Some program service representatives told us that

delays in processing these workloads can affect SSA payments to

beneficiaries and have caused additional inquiries to the 800 number by

11In fiscal year 1996, 21 percent of all callers who got through to the 800 number—including callers

who got through within 5 minutes—hung up before speaking to a representative or completing their

automated transaction. SSA does not track the percentage of callers who got through within 5 minutes

and who hung up before being served.

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affected customers; however, SSA does not track and therefore does not

know the extent to which callers call the 800 number because of delays in

processing transactions.

In addition, SSA’s efforts to gate callers with specific questions to special

units or employees did not work as well as planned. For example, SSA

planned to gate all calls about the PEBES to a special SSA unit with expertise

in handling those calls. The special unit was quickly overwhelmed with too

many calls, however, including calls unrelated to the PEBES, which the unit

was not trained to handle. Because the special unit lacked equipment to

transfer callers back to the main 800 number, when these staff received

questions beyond their expertise, they directed callers to the main 800

number again, which diminished service for those callers. To resolve these

issues, SSA took several steps, including limiting the number of calls gated

to the special unit; increasing the number of staff for that unit; and training

the unit to handle a few additional, simpler types of inquiries. SSA is also

considering purchasing equipment and technology necessary for

transferring callers to different SSA numbers.

Finally, some initial, technological setbacks hindered SSA’s efforts to

improve access. Most dramatically, the automated menu service lacked

sufficient capacity for SSA’s tremendous call volume and was overloaded

on its first day of implementation, resulting in only about 25 percent of

callers getting through to the 800 number on that day. The next day, SSA

switched to another, temporary system capable of handling SSA’s high call

volume; however, its automated features could not be used by Spanishspeaking callers or callers with rotary dial telephones. SSA began providing

automated service to rotary dial callers in August 1996. Later in 1997, SSA

plans to phase in a Spanish version of the automated menu as well as

change the type of telephone switching centers12 that support its 800-

number service.

In addition, SSA had problems with the technology that allows callers to

record their requests for information. This technology sporadically

malfunctioned during attempts to transcribe the recorded information,

which resulted in, among other things, callers occasionally receiving

multiple PEBES applications. In addition, the technology did not provide an

accurate count of the number of callers using this technology—data that

SSA needs to evaluate the use and effectiveness of this feature. SSA

subsequently fixed the transcription problem but, as of February 1997, was

12SSA’s 800 number currently uses telephone switching centers or computers that serve only Federal

Telephone System 2000 customers. SSA plans to move the 800-number service to switching centers

that serve other customers and offer more technological features.

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still trying to resolve problems with obtaining an accurate count of callers

using this technology.

Improving

800-Number Service

With Limited

Resources Will

Challenge SSA

SSA has established more ambitious goals and added performance

measures for both its 800-number service and overall customer service for

fiscal year 1997. For example, SSA raised its access goal for the 800 number

to having 95 percent of callers get through within 5 minutes from its

previous goal of 85 percent, although this goal continues to reflect access

to the 800-number system and not to service. SSA knows that this measure

is incomplete and is considering revising its 800-number goals and

measures as part of a broader effort to reassess its customer service

standards. For fiscal year 1997, SSA has already added a new goal for

accuracy of 800-number service as well as two new goals for overall

customer service performance. Table 2.1 shows SSA’s performance

measures and goals for fiscal year 1997 for the 800 number and for

customer service in general.

Table 2.1: SSA’s Performance

Measures and Goals for Fiscal Year

1997 Measure

Goal

(percent)

Overall service

Percent of people who rate SSA service as courteous or very courteous 90

Percent of people who rate SSA service as good or very good 82

800-number service

Percent of callers who reach 800 number within 5 minutes 95

Percent of calls handled accurately 97.2

In addition to establishing goals for access and accuracy, SSA plans to

increase the number of transactions that customers may conduct and

complete with one call to the 800 number. As discussed in chapter 1, SSA

has learned that its customers want to transact more business using the

800 number and do so with one call. SSA’s future plans include exploring

technology and system changes that will enable callers to conduct

complex transactions, such as filing benefit claims, and to complete

transactions with one call to the 800 number.

SSA officials recognize that improving access while expanding services will

be challenging. Improving access alone will be difficult because the

volume of 800-number calls is expected to grow as a result of several

demographic, legislative, and program changes. Expanding the number of

transactions conducted and completed over the 800 number, combined

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with increasing call volume, will make it even more difficult for SSA to

reach its ambitious access goals. Increasing the number or length of

transactions conducted over the 800 number will occupy 800-number

lines, further exacerbating busy-signal rates. SSA officials concede that

even with its current policy of conducting only simple business

transactions over the 800 number, the agency has had difficulty keeping

pace with customer demand.

To help reach its access goals, SSA plans to add 1,000 additional, lower

graded Spikes to the trained 800-number workforce to help out during

peak calling periods. Moreover, SSA has already taken steps to counter its

historically high attrition rate of one teleservice representative per day by

hiring additional teleservice representatives at the beginning of fiscal year

1997 to replace those expected to leave by the end of the fiscal year. SSA

also began installing a network of personal computers in April 1997 that

will have expert system software intended to provide guidance to

teleservice representatives.13 SSA expects that this software will improve

the consistency and accuracy—and possibly the cost-effectiveness—of

800-number service.

These steps, however, might not help SSA meet its immediate and

long-term goals. SSA’s 95-percent access rate will be hard to reach because

training the new Spikes and installing the new computer equipment only

began in April 1997 but will not be completed until December 1997.

Moreover, shutting down teleservice centers for at least a week while

computers are being installed and teleservice representatives are being

trained to use them might degrade service. Finally, although SSA has

increased the size of the trained 800-number workforce by 1,000 Spikes,

the agency plans to increase the amount of help that Spikes provide during

fiscal year 1997 by only 170 work-years over that of fiscal year 1996. On

the other hand, diverting more employees might result in a further

accumulation of their usual work, considerable amounts of overtime paid

to do this, or both. As SSA seeks to handle growing agencywide workloads

and responsibilities with fewer resources, its strategy of paying these

employees overtime does not appear to be a sustainable, long-term

solution for improving 800-number service.

13SSA’s Automation Investment Fund of $1.1 billion supports its 5-year plan, from fiscal years 1994 to

1998, of moving from reliance on mainframe computers toward a nationwide network of personal

computers.

Page 25 GAO/HEHS-97-79 800-Number Service
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SSA’s 800 Number

SSA faces many challenges in trying to meet rising customer demand and

expectations for its 800-number service. The experiences of the private

sector and IRS in meeting similar challenges could help SSA cost-effectively

improve its 800 number. While SSA knows about many of these costeffective practices, it needs to take deliberate steps to successfully

implement them. For example, more and more private companies have

made greater use of automated services to both satisfy growing customer

demand and expectations as well as reduce the cost of their 800-number

operations. To move in this direction, SSA would first need to

systematically identify transactions suitable for automation, then develop

and test an expanded menu of automated transactions. For those

transactions considered too complex to automate, leading private-sector

companies reduce the operating and administrative costs of providing live

assistance by locating their call agents in a few large centers. Likewise, SSA

could reduce the cost of providing live assistance by consolidating its

network of 37 teleservice centers.

In contrast to some businesses that rely primarily on their 800 numbers to

provide customer service, SSA continues to provide service through an

extensive field office network as well as over the 800 number. Therefore,

before adding to the number of transactions available over the 800

number, SSA needs to determine whether the 800 number is the most

cost-effective way to deliver those services. Currently, however, SSA does

not systematically collect the cost and performance data necessary to

make such a determination. (See app. II for additional information on

private-sector trends and best practices in 800-number service.)

Steps Needed to

Expand Automated

Services

Following private-sector practices, SSA could save money and improve

access by expanding the use of the automated menu to provide routine

services; however, SSA has not taken concrete steps to do this. Until SSA

develops automated methods for verifying callers’ identities, it cannot

automate transactions involving sensitive information. SSA set up a work

group to study this issue, but the group has no results to date. In contrast,

IRS—a public agency also concerned with protecting the privacy and

integrity of the business it conducts with the public—has successfully

implemented automated security measures, such as customer service

numbers, to establish callers’ identities for several sensitive transactions.

SSA Does Not Have

Concrete Plans to Increase

Automated Transactions

As in the private sector, SSA could save money while improving access by

increasing the number of services provided through the automated menu.

Private-sector companies have dramatically reduced per call costs by

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SSA’s 800 Number

relying on automated response systems to reduce the number of simple

and routine calls handled by call agents. Companies have used these

systems in the past to handle routine transactions that do not require an

explanation but are increasingly using them to handle a wider and more

complex range of transactions such as the making of bill or loan payments

by customers. As of February 1997, SSA has limited the automated menu to

five of SSA’s simpler, most frequent transactions.14 SSA’s Office of Inspector

General recommended in 1995, before SSA established the nationwide

automated menu, that the proposed menu be expanded to include, for

example, 11 of SSA’s simpler, more repetitive transactions to reduce the

number of staff-years needed to handle 800-number calls. Table 3.1 shows

these 11 transactions, including the percentage of 800-number calls they

represent and whether they are currently automated.

Table 3.1: Transaction Types Suitable

for Automation

800-number services

Percent of calls

(8/92 to 7/93)a

Currently

automated

Requests for new or replacement Social

Security cards

12.9 Request for

application

Benefit verification 5.1 Yes

Personal Earnings and Benefit Statement 3.8 Request for

application

Field office location 4.1 Yes

Nonreceipt of check 3.8 No

Status of claim 5.0 No

Change of address 6.4 No

Scheduling of appointment to file retirement

claim

2.4 No

Other forms/literature 1.0 Nob

Inquiries about direct deposit 6.4 No

Application for Medicare card 1.6 Yesc

Total 52.5

aAccording to Inspector General representatives involved in this audit, the data on percent of

calls were collected as part of a special study conducted by SSA’s Office of Program Integrity

Review.

bAutomated options for requesting pamphlets or listening to informational messages are only

available to callers after hours.

cThe automated menu also allows callers to get information on Medicare coverage of medical

equipment or supplies, inpatient hospital expenses, or doctors’ services.

Sources: Improving Service on Social Security Administration’s 800 Telephone Number Network,

SSA, Office of Inspector General, Dec. 1995 and SSA’s Office of Telephone Services.

14During evenings and holidays, when SSA representatives are not working, SSA offers callers two

additional automated transactions—to request pamphlets or listen to informational messages.

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SSA’s 800 Number

As of February 1997, SSA did not have concrete plans to expand its current

selection of automated transactions. According to SSA officials, SSA is

postponing development of such plans until it has completely phased in an

automated menu that can be used by Spanish-speaking callers.

In addition, SSA officials are concerned that providing too many automated

transaction options and submenus might confuse customers and increase

the length (and thus cost) of each call. SSA’s current automated menu

offers seven initial options (including a live assistance and repeat option).

Some of these options lead to other submenus with additional, more

specific options. Experience in the private sector has shown, however,

that, if carefully scripted and tested, automated systems of two to three

submenus with up to four transaction choices each can produce high

customer use and satisfaction.

To systematically identify the most cost-effective transactions for

automation, SSA needs ready access to detailed data on the frequency of

specific types of calls. Using these data, SSA could determine which

transaction types, if automated, would most likely decrease time spent by

SSA representatives, for example, providing routine information. SSA does

not now track reasons for each incoming call because it would require

teleservice representatives to remember and accurately record the

information. Instead, SSA relies on data acquired from (1) routine call

monitoring conducted for quality assurance purposes and (2) surveys of

recent 800-number callers. Due to the small sample size of calls monitored

for quality assurance purposes, however, “reason-for-call” categories are

combined to get representational data. Although combined categories

might create more representational information for quality assurance

purposes, they become less useful for identifying specific call types that

could be transactions suitable for automation.15 Data acquired from

surveys of 800-number callers are based on callers’ recollection of their

reason for calling and therefore are not very reliable.

SSA Must Resolve How to

Verify Callers’ Identities

Using Automated

Transactions

Some types of routine SSA transactions might be suitable for automation

but, due to their sensitivity, cannot be automated until SSA develops

methods for verifying callers’ identities without using teleservice

representatives. To reduce the risk of program fraud or inappropriate

access to personal records, SSA service representatives handle many

routine but sensitive transactions either in person or by telephone to verify

15To illustrate this, all calls concerning claims are combined into one category. For purposes of

automation, SSA might be interested in, for example, the number of callers who want to schedule an

appointment to file a claim.

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customers’ identities. For example, a beneficiary may change the address

on record only after establishing his or her identity with an SSA

representative by correctly answering a series of questions that only that

individual could answer (such as place of birth or mother’s maiden name).

SSA is in the early stages of examining how to verify callers’ identities using

the automated features of an 800-number service. SSA created the

Electronic Service Delivery project to identify cross-component,

cross-program approaches for providing convenient, cost-effective, secure,

and user-friendly service options to customers. Under this effort, SSA work

groups are studying the problem of protecting individual privacy and

program integrity for sensitive transactions conducted using electronic

media. While the work groups are largely focusing on the problem of

providing customer service over the Internet, one work group is

developing the first set of agency standards for determining the level of

security required for different types and methods of transactions,

including telephone transactions. As of February 1997, this work group

had not yet completed a broad set of standards for authentication.

IRS’ 800-Number Service

Offers Secure Automated

Transactions

IRS provides a useful example of a public agency’s conducting sensitive

transactions that require verifying callers’ identities without the help of

agency representatives. IRS operates an 800-number service that had

historically experienced even higher busy-signal rates than SSA’s. To

improve access, IRS has increased the use of automated services to allow

telephone agents to take more complex calls. As with SSA, many of the

transactions that IRS conducts with the public require security measures to

prevent fraud or improper disclosure of information.

As of January 1997, IRS had successfully automated several of its 800-

number transactions that require verification of callers’ identities. For

example, taxpayers may learn the status of their refund or the amount of

payment due without speaking to an IRS representative. To learn about the

status of a refund, callers first establish their identity by keying in their

Social Security number, filing status, and refund amount using their

Touch-Tone telephone. Using more stringent security measures, certain

taxpayers may also file an income tax return over the 800 number. IRS

provides taxpayers who have a history of filing the simplified tax form

(1040EZ) a customer service number in the tax documents mailed to them.

These preidentified taxpayers may now file their 1040EZ forms using IRS’

automated 800-number service by first keying in their personal

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SSA’s 800 Number

identification number along with their Social Security number and date of

birth.

SSA Needs a

Cost-Effective

Strategy for Providing

Live Assistance

SSA also needs to pursue cost-effective approaches for delivering those

services that it determines are too complex to automate and therefore

require the SSA representatives’ help. SSA is moving in this direction, for

example, by providing its teleservice representatives with new personal

computers and software to improve the consistency and accuracy of

service and linking call centers electronically to improve call routing.

Although these new workstations might improve the consistency and

accuracy of service, SSA’s plan to electronically link centers falls short of

private-sector trends to save money and improve service by reducing the

number of call centers.

Consistent with private-sector practices, SSA has plans for improving the

way its teleservice representatives provide customer service. Privatesector leaders recognize the importance of providing call agents with

state-of-the-art technology and tools to provide fast and effective service.

For example, expert systems that provide immediate access to technical

guidance are common tools for many 800-number agents. In addition,

companies are successfully reducing service time by linking

telecommunication and computer technology to access customer records

even before the call agent takes a call. As noted earlier, SSA plans to install

new personal computers with expert system software at each teleservice

center, which it expects will improve the consistency and accuracy of

service provided by teleservice representatives and Spikes.

SSA also has plans to expand previous efforts to link more teleservice

centers together electronically. SSA recognizes that 37 teleservice centers

are too many and that consolidating them would reduce costs. SSA is

reluctant to reduce the number of centers, however, because of the impact

that closures will have on employees and surrounding communities. SSA’s

plan to electronically link centers achieves some of the benefits of

consolidation, such as increased operational efficiency and telephone

access, without closing centers. While closing offices would be difficult,

locating its teleservice representatives in fewer call centers would most

likely result in even lower operating and administrative costs for SSA and

improve the quality of the 800-number service. Private-sector best

practices have demonstrated that reducing the number of call centers

provides many benefits, including lower rent and utilities, lower operating

and equipment costs, increased managerial control and flexibility in

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SSA’s 800 Number

staffing, centralized training and support, and increased consistency in

processes and services. Similarly, the benchmarking effort sponsored by

the National Performance Review found that 800-number services operate

most efficiently with few centers with as many as 600 employees each. As

far back as 1990, HHS’ Office of Inspector General16 recommended that SSA

consolidate the 800-number network into fewer call centers to lower

operating and equipment costs, as well as to increase flexibility in using

telephone agents, the public’s telephone access, and opportunities to use

new technology. SSA continues to study this issue but does not have

concrete plans to significantly reduce or consolidate its current teleservice

centers.

Expanding Services

Requires Carefully

Assessing Costs and

Benefits

Consistent with private-sector practices, SSA is responding to customers’

demands to conduct a greater range of transactions by phone and to

complete their business with one call. Unlike some private-sector leaders

in 800-number service, however, SSA provides services through an

extensive field office network in addition to its 800 number. SSA recognizes

that before increasing the range of transactions provided by its 800-

number service, it should first assess such changes’ effect on other service

delivery methods and whether they are the most cost-effective approach

for providing service. For example, SSA would like to allow callers to file

claims for benefits using the 800-number service without having made an

appointment. Individuals must now file claims by calling or visiting one of

SSA’s field offices, typically by appointment. Because filing a claim requires

30 or more minutes to complete, adding this service to the 800 number

might negatively affect access to the 800 number without providing a

commensurate reduction in field offices’ workload and thus not contribute

to the overall cost-effectiveness of service delivery.

Knowing whether filing claims or conducting other complex transactions

over the 800 number is cost-effective compared with other methods would

help SSA justify 800-number improvements to internal and external

stakeholders, including employee groups and the Congress. At this time,

however, SSA does not know how the cost of conducting transactions over

the 800 number compares with the cost of conducting transactions using

other service delivery methods such as field office telephones. Due to

differences in local phone systems, SSA does not know how many calls

field offices receive. In addition, SSA does not track the resources devoted

to answering field office telephones. In general, the cost of 800-number

16Before SSA became an independent agency, HHS’ Office of Inspector General had responsibility for

internal audits of SSA. After gaining independence from HHS, SSA established its own Office of

Inspector General.

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SSA’s 800 Number

workloads is basically easier to evaluate than that of field office workloads

because the 800 number is supported by a centralized telephone network

that routinely and automatically tracks all calls.

As SSA expands the range of transactions available through the 800

number, the agency also needs to develop better performance measures of

how well or completely callers are being served. As discussed in chapter 2,

SSA is currently measuring access to the system, not to service, in assessing

progress toward its access goal. This is inconsistent with common

private-sector practices, which typically establish performance goals

based on access to service. SSA already collects data on the average

amount of time callers spend waiting on hold to speak to a representative.

SSA also collects data on the length of time each caller speaks with a

teleservice representative and the number of callers who hang up either

while waiting to speak to a teleservice representative or before completing

an automated transaction. With this data, SSA could establish performance

goals and measures on the extent to which callers actually completed their

automated transaction or were assisted by a teleservice representative, the

amount of time spent on hold, and the total length of calls.

Although SSA can establish additional performance goals based on data

that it already collects, it does not collect other data that would allow it to

more fully measure access to service. For example, SSA does not track the

reason for each call and therefore cannot establish a performance measure

for whether callers successfully complete specific types of transactions

and the length of time required to do so. In addition, according to research

and consulting organizations specializing in customer service, customers

consider time spent waiting on hold to be less important than what they

experience once the phone is answered. A wait of 1 minute is usually

acceptable, for example, if customers then reach someone who can handle

their call to completion on first contact.17 SSA does not now track

information on the extent to which it transfers callers to other units,

however, or refers them to another office to complete the callers’

business. SSA is currently reassessing its customer service performance

goals and measures. As it does so, SSA will need additional information on

the extent to which callers can successfully complete various types of

transactions and the length of time or number of steps required to do so.

17Jay Marwaha and Jeff Tommerdahl, “Outsourcing Your Customer Service,” Telemarketing, Vol. 14,

No. 2 (1995), p. 84.

Page 32 GAO/HEHS-97-79 800-Number Service
Chapter 4 

Conclusions, Recommendations, and

Agency Comments and Our Evaluation

Conclusions Since its inception in 1989, SSA’s nationwide 800 number has received

increasing numbers of calls, reflecting growing customer preference for

using this service. Meanwhile, SSA has had trouble keeping up with caller

demand as indicated by persistently high busy-signal rates. Recent

initiatives, including adding more people to handle 800-number calls and

installing a nationwide automated menu, have increased the percentage of

callers getting through to the 800 number within 5 minutes of their initial

try. SSA accomplished this, however, mainly by diverting SSA employees

from other work areas, causing these employees’ usual work—maintaining

beneficiary records—to accumulate.

SSA’s 800 number will remain an important service delivery method, for

which demand is expected to grow. SSA will need to determine how to

most cost-effectively meet this growing demand in the current fiscal

environment. In addition to improving access, SSA’s future plans include

expanding the number of transactions callers may conduct and complete

using the 800 number. With limited resources, however, SSA will have

difficulty reaching its competing goals: expanding the range of and

increasing access to 800-number services.

SSA knows that private-sector companies are expanding 800-number

services and increasingly relying on technology to cost-effectively meet

customer demand and has adopted some of these approaches to meet its

growing demand. We support these efforts, but SSA needs to take the

additional steps that IRS and the private sector have used to costeffectively meet their customers’ expectations. For example, to improve

cost-effectiveness, SSA should develop concrete plans to automate more

transactions, systematically reviewing data to identify those best suited for

automation. As it seeks to increase the number of automated transactions,

SSA will also need to ensure that it protects against fraud and improper

disclosure of private information.

To provide cost-effective service when live assistance is necessary,

private-sector companies tend to locate their call agents in a few large

centers and provide them with the technology and tools to quickly and

efficiently serve their customers. SSA has taken some steps to provide its

call agents with additional tools but should have a more comprehensive

strategy for providing cost-effective live assistance. For example, SSA

needs to develop a concrete plan for locating its teleservice

representatives into fewer, larger call centers. Office closures involve

sensitive human resource issues and may have a negative impact on local

communities. For these reasons, SSA will need to work with employee

Page 33 GAO/HEHS-97-79 800-Number Service
Chapter 4 

Conclusions, Recommendations, and

Agency Comments and Our Evaluation

groups, and with the Congress, to successfully implement any

consolidations.

Before expanding the 800-number service to include additional

transactions, such as filing of claims, SSA should determine the impact of

such an expansion on overall service delivery, including its costeffectiveness. To do this, SSA will need additional cost data on alternative

service delivery methods. In addition, SSA needs additional information on

the 800 number’s performance, including the extent to which customers

may complete their business with SSA in one call and the length of time or

number of steps required for SSA to completely serve a customer. With this

data, SSA would have a more complete picture of how effectively it is

serving callers.

Recommendations To serve the public’s growing demand for SSA’s 800-number services with

limited resources, SSA needs to take additional steps toward improving the

800 number in a cost-effective manner. These steps should include

• developing a plan for expanding automated services that both

systematically identifies additional transactions for automation and, for

sensitive transactions, protects against fraud and inappropriate disclosure

of private information and ensures program integrity and customer

privacy;

• developing and implementing a plan for reducing the number of call

centers to save money and enhance service provided by SSA

representatives;

• comparing the cost-effectiveness of expanding the 800-number service

with that of other service delivery methods, such as face-to-face service;

and

• establishing additional performance measures to more fully assess the

consequences of expanding 800-number services, including measures for

the promptness and completeness of 800-number customer service.

Agency Comments

and Our Evaluation

SSA officials generally agreed with the conclusions and recommendations

in this report and stated that the report would be useful to SSA as it further

refines its 800-number service. In response to our recommendation that

automated services be expanded, SSA commented that recent internal

surveys suggest that callers may not readily accept automated services to

conduct their business. Because of the cost-effectiveness of this approach,

however, SSA needs to continue to seek ways, we believe, to expand

Page 34 GAO/HEHS-97-79 800-Number Service
Chapter 4 

Conclusions, Recommendations, and

Agency Comments and Our Evaluation

800-number automated services. Furthermore, public acceptance of

automated services has been growing as indicated by private-sector

trends. In response to our recommendation that SSA develop and

implement a plan for reducing the number of call centers, SSA said that it

continues to explore all potential efficiencies and take appropriate action,

including the consolidation and collocation of teleservice centers. While

SSA has consolidated or collocated some teleservice centers, it has also

continued to add call answering sites to its teleservice center network. SSA

needs a more comprehensive and far-reaching plan, we believe, for

providing cost-effective live assistance that, consistent with private-sector

practices, includes organizing its teleservice representatives into a smaller

network of large call centers. Trends in the private sector amply

demonstrate that fewer, large centers yield operational and cost

efficiencies.

Finally, SSA stated that it has taken steps consistent with our

recommendations that it compare the cost-effectiveness of 800-number

service with other service delivery methods and that it establish additional

performance measures. In establishing more complete performance

measures, SSA should ensure that such measures involve the entire

800-number service and that information collected is not limited to pilot

projects. SSA also provided technical comments, which we have

incorporated in this report as appropriate. The full text of SSA’s comments

appears in appendix III.

Page 35 GAO/HEHS-97-79 800-Number Service
Appendix I 

SSA Customer Service Pledge

We will administer our program effectively and efficiently to protect and

maintain the Social Security trust fund and to ensure public confidence in

the value of Social Security. We are committed to fair and equitable

service to our customers. We promise to respect your privacy and

safeguard the information in your Social Security record.

We are equally committed to providing you with world-class public

service. When you conduct business with us, you can expect:

• We will provide service through knowledgeable employees who will treat

you with courtesy, dignity, and respect every time you do business with us.

• We will provide you with our best estimate of the time needed to complete

your request and fully explain any delays.

• We will clearly explain our decisions so you can understand why and how

we made them and what to do if you disagree.

• We will make sure our offices are safe, pleasant, and our services are

accessible.

• When you make an appointment, we will serve you within 10 minutes of

the scheduled time.

• If you request a new or replacement Social Security card from one of our

offices, we will mail it to you within 5 working days of receiving all the

information we need. If you have an urgent need for the Social Security

number, we will tell you the number within 1 working day.

• When you call our 800 number, you will get through to it within 5 minutes

of your first try.

We know that you expect world-class service in all of your dealings with

us. In 1994, when we set these standards, we were unable to meet your

expectations in some areas, but we have worked to change that. We are

revising all our critical work processes to make them simpler, quicker, and

more customer-friendly. When we redesign our processes, you can expect:

• When you first apply for disability benefits, you will get a decision within

60 days.

Page 36 GAO/HEHS-97-79 800-Number Service
Appendix II 

Private-Sector Trends and Best Practices in

800-Number Service

The private sector is facing many of the same customer demands and

challenges faced by SSA. Customers are continually demanding more

convenient ways to conduct business. Recognizing these demands, private

companies are increasingly relying on 800-number telephone service to

conduct business with their customers because 800 numbers are

convenient and free to the customer. In addition, once private-sector

companies establish 800-number service, customer preferences have had

an important influence on what and how services are delivered.

More and more companies are using automated menus, known as

automated response systems, to cost-effectively handle the increasing

volume of incoming calls while meeting customer preferences for a wide

range of 800-number services. Telecommunications experts we contacted

unanimously viewed this technology as more cost-effective than using live

assistance. Automated response systems have been used mainly when

callers have a frequently asked question or wish to complete a routine

transaction that does not require live assistance. Companies are

increasingly seeking ways to automate more complex transactions,

however, that require customers to interact with the system to a greater

degree than, for example, simply obtaining information.

Although the private sector continues to emphasize finding 800-number

services that can be automated, live assistance remains a necessary part of

service for handling unusual or complex transactions or for customers

with some special need or question. To lessen the cost of live assistance

and enhance service, private-sector companies provide their call agents

with state-of-the-art telephones, computers, and software applications and

tend to organize them in a few large centers. Although opinions vary on

the ideal number and size of call centers, a few sites with large numbers of

call agents has become the norm for high-performance call centers.

Customers Want

Comprehensive,

Complete, and Fast

Service

To meet consumer expectations for fast and convenient service, some

companies have been moving toward telephone-based service and away

from other service delivery approaches such as face-to-face service or

mail. For example, banks have been setting up telephone-based services to

meet the competitive challenge from nonbank financial competitors, such

as mutual fund companies, which are leaders in providing telephone-based

service. Given this trend, the percentage of retail transactions conducted

over the telephone in the banking sector is expected to increase by

88 percent by the year 2000; in-person transactions are expected to

decrease by 38 percent during the same time period.

Page 37 GAO/HEHS-97-79 800-Number Service
Appendix II 

Private-Sector Trends and Best Practices in

800-Number Service

Other industries are also increasing telephone-based service. For example,

one large insurance company has expanded its 800-number service so that

about 90 percent of its business is currently conducted over its 800

number. Before expanding its 800 number, this company conducted about

30 percent of its business by telephone, with the remaining 70 percent

conducted primarily by mail. According to a company representative,

customers are now very satisfied with the more convenient and faster

service.

In the private sector, once an 800 number is established, customer

preferences have a major impact on how and what services are delivered.

Customers soon expect to be able to conduct an increasingly larger

number of transactions by telephone and to complete transactions or have

questions answered with their first call and in a minimal amount of time.

According to telecommunications experts, customers are continually

seeking a greater range of services to be conducted by telephone, often

basing their expectations on the positive experiences they may have had

with another company.

To guarantee quick and responsive service, private-sector firms often

establish expected performance levels for providing access to customer

service—not just to their system. One expert told us that firms, by

analyzing incoming calls, have a precise idea of how long customers will

wait on hold before hanging up. On the basis of this knowledge and the

service responsiveness of their competitors, companies arrive at their

planned level of responsiveness. For example, one company has

established performance measures and goals for the percentage of calls

answered without the caller spending time on hold (84 percent or higher)

and the percentage of callers abandoning their calls (no more than 2 to

3 percent).

Companies also recognize that customers expect to complete transactions

with one call. According to one expert, firms need improvement if they

completely serve callers on initial contact in 80 percent or less of cases. A

research and consulting organization specializing in customer service has

found that customers will tolerate being transferred during their first call

only if they then actually reach someone who can address their concerns.

Multiple transfers caused 10 to 25 percent of customer dissatisfaction,

according to this organization’s findings.

Directly related to consumers’ expectations that transactions be

completed with one call are that cycle time (the time it takes to complete a

Page 38 GAO/HEHS-97-79 800-Number Service
Appendix II 

Private-Sector Trends and Best Practices in

800-Number Service

customer’s transaction or business) be kept to a minimum. Having

immediate access to a service representative is not the same as getting a

prompt answer to a question. The time customers spend waiting on hold is

not as important as what they experience after the phone is answered,

according to research findings. A wait of 1 minute is usually acceptable if

customers then reach someone who can handle their call to completion on

first contact. To help their frontline workers assist customers quickly and

effectively, industry leaders use computer information systems that allow

workers to quickly retrieve online information and procedures manuals.

Automation Is Crucial

to Reducing Costs and

Improving Service

Companies are increasingly using technology, such as automated response

systems, to help them meet consumer preferences and handle growing

volumes of incoming calls. Reflecting the increased demand for this

technology, the market for automated response products and services is

expected to more than double from $1.1 billion in 1994 to $2.3 billion in

2000. By installing an automated response system, most companies seek to

both improve customer service and reduce the number of routine calls

handled by service representatives.

According to one expert, installing an automated response system can

improve service responsiveness. By answering callers’ questions from

preprogrammed menu options, an automated system can curb routine,

tedious transactions that detract from employee productivity, such as

customer requests for bank account balances. This allows employees to

respond to more complex and nonroutine calls more effectively and

provides callers with round-the-clock availability and faster transaction

processing. To illustrate this, before a state medical bureau installed an

automated response system, the bureau’s three teleservice agents could

answer only about 8 percent of calls from doctors and other health care

providers to verify Medicaid claims. Since the bureau installed the

automated system, which handles 12 calls simultaneously, 100 percent of

its calls are answered. In addition to improving service, the system may

save the state over $1.3 million a year by eliminating claims with errors.

This and other private-sector experiences indicate that automated

response systems can dramatically affect the cost of service delivery. Calls

would cost $12 per call if answered by a call agent, according to one

financial services firm, compared with $.20 per call if answered by an

automated response system. This firm, with a daily call volume of 250,000,

could potentially reduce costs from $3 million to $50,000 a day with a fully

automated system. In another example, over a 4-year period, one company

Page 39 GAO/HEHS-97-79 800-Number Service
Appendix II 

Private-Sector Trends and Best Practices in

800-Number Service

reduced staff by 50 percent and increased its account base by the same

percentage by promoting the use of automated response systems. One

brokerage firm has passed on some of the savings to its customers by

offering discounts of as much as 10 percent for trades conducted over its

automated telephone system.

Although companies have historically used automated response systems in

situations where customers make many repetitive calls requiring no

explanation, such as balance and check-clearing inquiries in the banking

sector, they are also increasingly using such systems for a wider and more

complex variety of transactions. For example, one bank official we

contacted said customers may use an automated interactive service to

transfer funds between various bank accounts, make loan payments, and

pay bills to previously identified merchants. The bank wants to expand its

automated services and is setting up an automated feature to stop

payment on checks and a merchant-verification procedure (whereby

merchants can check to see if customers have sufficient funds to cover a

personal check).

To be effective, automated systems should have no more than two to three

submenus, with each menu offering a maximum of four options, according

to research studies. For more complicated menus, however, companies

have found that providing information ahead of time on the features and

proper use of an automated system reduces the number of calls ultimately

handled by a service representative. Companies generally mail such

guidance to customers.

Live Assistance

Option Important for

Effective Service

Private-sector companies have found that live assistance remains a

necessary part of 800-number service for handling unusual or complex

transactions or for customers with a special need or question. To provide

cost-effective service, private-sector companies recognize the importance

of providing their call agents with state-of-the-art technology. Such

technology allows call agents to quickly and efficiently serve their

customers. For example, expert systems are widely used to enable

frontline workers to answer customer inquiries quickly and effectively.

Expert systems include databases to quickly retrieve information and

online procedures manuals that are easy to use.

Companies are increasingly linking telecommunication and computer

technology to retrieve customer records as soon as a call is received.

Using automatic number identification technology, a company’s computer

Page 40 GAO/HEHS-97-79 800-Number Service
Appendix II 

Private-Sector Trends and Best Practices in

800-Number Service

matches the caller’s phone number to company records to identify and

retrieve the record on file for that phone number. Such a quick retrieval of

information can reduce call length by 20 to 30 seconds, according to one

expert, and, if a business has many of its callers using their phone number

on file, the savings can be substantial. The benefits of this technology

surpass cost savings, according to one representative of a major vendor,

because it is a proactive service saving the customers’ time and increasing

customer satisfaction. Most of this vendor’s largest customers have moved

to this technology.

Companies are also increasingly using sophisticated imaging technology

that allows them to electronically share copies of documents officewide.

In the past, call agents would have to rely on sharing paper documents to

provide customer service—an inefficient and time-consuming process.

Imaging technology allows a document to be scanned into the electronic

database and be made immediately available to all agents on their

computer screens anytime they need it. Document scanning and on-screen

retrieval have helped one major company answer 80 percent of inquiries

on the first call, compared with 40 percent in prescanning days.

Companies are also moving toward fewer and larger centers for organizing

their call agents. While opinions vary on the ideal number and size of call

centers, experts agree that site consolidation is important for effective

800-number service. A recent example of call center consolidation

includes a regional power company that served its customers in the late

1980s through 98 offices in two contiguous states. While service was

personal, it was also inconsistent and inefficient, so the company

consolidated its 98 offices into a single, state-of-the-art megacenter.

Sometimes companies consolidate operations to achieve purposes other

than economies of scale. For example, when one company consolidated 57

branch offices into three regional centers, the primary criterion in site

selection was an adequate supply of high-quality labor at competitive labor

rates. Other potential benefits of physical consolidation include reduced

rent and utilities; lower operating and equipment costs; increased

managerial span of control requiring fewer managers; increased flexibility

in staffing, centralized training, and support functions; and increased

consistency in processes and service. Beyond these benefits, according to

one expert, fewer call centers allow easier database management,

particularly because teleservice agents often have to share data among

centers.

Page 41 GAO/HEHS-97-79 800-Number Service
Appendix II 

Private-Sector Trends and Best Practices in

800-Number Service

Opinions vary on optimal call center size, but the centers in many large

corporations range from between 200 to 600 positions. The National

Performance Review-sponsored benchmarking study of 800-number

services reported that the number of operating locations needed to handle

even the largest call volumes is typically one to three call centers, with a

maximum of 600 frontline workers per center. Some larger companies,

however, have as many as 2,000 to 3,000 teleservice agents at one call

center, according to one 800-number vendor we contacted.

Page 42 GAO/HEHS-97-79 800-Number Service
Appendix III 

Comments From the Social Security

Administration

Page 43 GAO/HEHS-97-79 800-Number Service
Appendix III 

Comments From the Social Security

Administration

Page 44 GAO/HEHS-97-79 800-Number Service
Appendix IV 

GAO Contacts and Staff Acknowledgments

GAO Contacts Cynthia M. Fagnoni, Assistant Director, (202) 512-7202

Michele Grgich, Evaluator-in-Charge, (415) 904-2183

Staff

Acknowledgments

In addition to those named above, Robert R. Tomco was an important

contributor to all aspects of this review, including data gathering, analysis,

and report writing; and James P. Wright contributed significantly to the

writing of this report.

Page 45 GAO/HEHS-97-79 800-Number Service
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Page 47 GAO/HEHS-97-79 800-Number Service
Related GAO Products

Social Security Administration: Significant Challenges Await New

Commissioner (GAO/HEHS-97-53, Feb. 20, 1997).

SSA Benefit Statements: Well Received by the Public but Difficult to

Comprehend (GAO/HEHS-97-19, Dec. 5, 1996).

Tax Administration: Making IRS’ Telephone Systems Easier to Use Should

Help Taxpayers (GAO/GGD-96-74, Mar. 11, 1996).

Social Security: Telephone Access Enhanced at Field Offices Under

Demonstration Project (GAO/HEHS-96-70, Feb. 23, 1996).

Tax Administration: IRS Faces Challenges in Reorganizing for Customer

Service (GAO/GGD-96-3, Oct. 10, 1995).

(105936) Page 48 GAO/HEHS-97-79 800-Number Service
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