Invest in people, embrace innovation and adapt to change
The UK customer care landscape – in particular contact centres (CC) and customer experience (CX) organisations – is caught in a complex web of economic headwinds, workforce challenges and the accelerating march of technology. Against forecasts of continued economic sluggishness and soft consumer confidence, the sector has no choice but to tread a careful path between sustaining service quality and managing costs. Yet, even in this difficult context, there are pragmatic opportunities for transformation for those willing to invest in people, embrace innovation and adapt to a rapidly evolving business environment.
The economic backdrop
Projections from the Confederation of British Industry and major financial institutions point to ongoing weak growth, reduced consumer spending and heightened uncertainty for UK businesses throughout 2025 and into 2026. Additionally, the Deloitte Consumer Tracker reveals a sharp fall in consumer confidence – down to -10.4% in Q2 2025, with notable declines in job security and growing worries about household debt.
These trends are bad news for customer care, as lower volumes of business and consumer services are likely. For many CC and CX providers, this may translate into shrinking demand, budget constraints and the need to find efficiencies wherever possible.
Payroll and workforce pressures
As of April 2025, substantial increases in the National Living Wage (NLW) and Employer National Insurance Contributions (ENICs) are squeezing already thin margins throughout the sector.
Payroll costs are set to rise by at least 6.7% for workers aged 21+ and up to 18% for those under 21 and apprentices. Even organisations that already pay above minimum wage may face pressure to increase pay further to retain staff and remain competitive.
Meanwhile, workforce shortages and a fierce race for digital and IT skills remain persistent problems. Even after a modest drop in talent shortages from 2024, three-quarters of UK businesses are still reporting difficulty in filling roles.
Technology: Transformation at pace
Despite economic gloom, the pace of technological change in customer care is relentless. AI-powered chatbots, advanced data analytics, cloud-based solutions and omnichannel service are no longer nice-to-haves – they are now central to efficient operations and high-quality customer experiences.
Gartner predicts that by the end of 2025, 80% of customer care organisations will be leveraging generative AI in some form. These tools can automate routine queries, improve first-contact resolution and provide actionable insights for strategic improvement. Cloud adoption, meanwhile, grants scalability and the flexibility to support hybrid or remote work arrangements, while reducing the need for costly on-premises infrastructure.
At the same time, however, there is a clear situational divide: While AI is rapidly becoming mainstream, 75% of consumers still prefer human interaction for complex or emotionally charged queries. Businesses must strike a careful balance between cost-saving automation and the empathetic, personalised service that builds loyalty and brand trust.
Customer expectations and experience
Research reveals that UK customers expect not just speedy service, but seamless, omnichannel experiences and tailored support that recognises their unique history and preferences. 42% of surveyed consumers say they have switched providers after poor customer care experiences, and 55% say they abandon calls when the wait times get too long. This information presents a warning to CC and CX businesses: During periods of economic stress, customer retention is crucial – every abandoned call or unresolved issue risks a permanent loss of business.
Strategic recommendations
Fortunately, there is some light amid the gloom. Agile CC and CX organisations may weather the challenges and seize valuable opportunities if they adopt a progressive workforce and business strategy. Actions to consider include:
Investment in workforce development
Implement targeted upskilling and reskilling programmes for new and existing employees
Create clear career pathways and development plans to foster retention over recruitment
Prioritise digital and data literacy across all employee levels.
Leveraging the human-tech balance
Embrace AI and automation for efficiency, but empower human agents for complex or sensitive issues
Use technology to augment, not replace, empathy and personalisation in customer conversations.
Adopting agile operating models
Utilise cloud-based systems for scalability, flexibility and seamless omnichannel service
Regularly review and refine service processes to respond rapidly to market and consumer changes.
Enhancing employee wellbeing
Monitor workload intensity and provide mental health support for agents handling high-stress interactions
Introduce advanced support tools for dealing with vulnerable customers.
Fostering a culture of continuous innovation
Encourage cross-functional teams to test new solutions and iterate quickly, based on real data and customer feedback.
A winning formula
Tough as the current business climate is, it’s not insurmountable. By investing in their people and embracing innovation, UK customer care providers can adapt to current realities and lay the groundwork for sustainable growth. The big winners will be those who act with agility and empathy, leveraging every tool and talent at their disposal to deliver both efficiency and an exceptional customer experience.
Learn more
For an in-depth overview of UK customer care, including more on the role of AI and automation, download the Brook Street 2025 Customer Care Trends Report now.
