‘Digital first, but not digital only’: Customer service workers were first on the AI chopping block – but half of enterprises are now backtracking amid a torrent of consumer complaints and poor returns on AI

Customer service workers were among the first on the AI chopping block, but now some enterprises are backtracking amidst a consumer backlash and concerns over quality.

Analysis from Gartner earlier this month found that human workers will remain an essential component for customer service activities despite the sharpened focus on AI adoption in this domain.

The consultancy said half of companies that expected to “significantly reduce” customer service workforces will abandon plans by 2027, and a key factor is the inability of the technology to pick up the slack.

According to Gartner, many companies are struggling to achieve ‘agent-less’ staffing goals, which highlights the acute challenges of transitioning to AI-driven customer service strategies.

In a poll of customer service and support leaders, Gartner found 95% plan to retain human workers as much as possible. In doing so, however, they hope workers will ultimately help “define AI’s role” in this business function.

“This approach ensures a ‘digital first, but not digital only’ strategy, avoiding the pitfalls of a hasty transition to an agentless model,” the consultancy said.

Simply put, this means customer service workers won’t be going anywhere - at least for a while - as enterprise efforts to ramp up AI in this area have fallen flat.

Kathy Ross, Senior Director Analyst at Gartner’s Customer Service & Support practice, said the future will likely see a fusion of both human workers and AI agents in this domain.

“While AI offers significant potential to transform customer service, it is not a panacea. The human touch remains irreplaceable in many interactions, and organizations must balance technology with human empathy and understanding,” Ross said.

“A hybrid approach, where AI and human agents work in tandem, is the most effective strategy for delivering exceptional customer experiences.”

Two-tier customer service isn’t off the cards

The u-turn by some enterprises follows a period of bullish outlook on the potential for AI to usurp human workers in customer service roles. Klarna, for example, has been highly vocal on this matter, having cut hundreds of jobs and replaced workers with AI.

This strategy appeared to be working for the company. In early 2024, Klarna revealed AI assistants were doing the work of around 700 people and the company had delivered significant cost savings as a result, with revenue-per-employee also improving.

CEO Sebastian Siemiatkowski has been among the most outspoken on the success of the strategy, but has since calmed the rhetoric. During a session at London Tech Week earlier this month, Siemiatkowski also appeared to be backtracking on the prospect of a fully automated future in customer service.

Notably, however, this wasn’t a complete u-turn by the Klarna chief exec, who echoed the findings of the Gartner study in terms of a fusion of human and agentic AI customer service.

Siemiatkowski said he envisages the future of customer service as somewhat of a two-tier affair, whereby ‘VIP’ customer service interactions involving human staff will be a paid-for luxury. Those unwilling to pay will have to contend with automated agents.

There does seem to be an appetite for this style of customer service, at least among Brits. According to a recent survey from digital analytics platform, Quantum Metric, 40% of respondents said they would be willing to pay a monthly fee for human interaction rather than using self-service options or interacting with AI agents.

More than half (54%) said they feel complaints or queries are only properly resolved when speaking to a real person, underlining the appetite for premium customer service options amid a period of AI replacement.

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