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The return
The rapid rise of artificial intelligence (AI) and its promises of cost efficiency have misguided businesses all over the world.
Klarna, the Swedish tech company that boasted of its AI-powered chatbot, which does the work of 700 full-time human agents, and reduced its workforce by 40%, is now rehiring humans as its new-age staff have adversely affected service quality instead of enhancing it.
Klarna CEO Sebastian Siemiatkowski admitted that the company was too captivated by the purported cost-effectiveness of the new technology. So much so that it drifted away from one of its core businesses: understanding and meeting the needs of customers.
While Klarna is the first prominent tech company to acknowledge this, a January 2024 survey by the Boston Consulting Group found that two out of three (66%) executives are ambivalent or dissatisfied with AI integration. More and more companies are discovering AI isn’t as sophisticated as those automation success stories proclaim.
Don’t believe the hype
“Replacement” was the taboo word as AI and its supposed super capabilities spread like wildfire across industries. Firms daydreamed of a supercomputer that would accomplish the task of legions of staff, which would drastically reduce their costs.
While automation has streamlined processes in various industries such as finance and accounting, the customer service segment is a different playing field. Your customers are humans and will have human needs. Some of their queries will be your standard complaints, while others will be very unique and complex.
The unpredictability of customer-oriented industries requires businesses to be more wary and conscientious about tweaking their operations. Integrating a new technology, amid all the hype surrounding it, must be carefully evaluated before being rolled out.
Klarna fell victim to this hype. The shift to AI agents only benefited themselves, not their customers. Achieving cost efficiencies is great, but only ticks one box. Businesses shouldn’t be afraid of shelling out a little extra if it means it’ll improve their services.
Klarna’s new plan
Experts, particularly from the academe, have been relentlessly preaching about the importance of the human element amid AI’s growing influence. Now we’re discovering they’re right. AI is a powerful tool, but it’s not a substitute for human labor.
The good news is that Klarna identified its problem and introduced a new solution right away. Its new initiative involves outsourcing human agents who can work anywhere in the world. The firm learned that it’s a handful of customers who still crave that human touch. Siemiatkowski even went so far as to declare: “Really investing in the quality of the human support is the way of the future for us.”
Reverting to humans is not a step backward in today’s age. It’s a sound management choice that shows a commitment to customer service excellence.
The question for your business
Is AI a boon or a bane for your company?
