Answering services are companies that specialize in taking and recording missed calls intended for the subscriber to the service. Essentially, these services perform the function of the basic telephone answering machine.
Answering services usually offer their customers the ability to record a voice message, as they would on a machine, that plays to callers after a given number of rings. The voice message, and any recordings left by callers, are held by the service and can be played back to the customer usually with a simple phone call and password log in.
A description like the one given above isn't necessary for anyone that owns and actively uses cell phone, which today seems like almost everyone. Since cell phones clearly cannot hook up to a traditional answering machine, messages are recorded by way of an answering service, which is typically part of the contract cell phone users agree to with their service providers.
Anyone who has ever attempted to order something on the phone is familiar with answering services as well. Usually when you call a business whose operators are all busy with incoming calls, you are redirected to an answering service. In these cases you are not normally prompted to leave a message, but are rather kept on a 'hold' like status until the next operator is free to take your call. Often the service will play music or verbal encouragement to stay on the line.
Today, many businesses are turning to the use of a live answering service instead of the usual and often obnoxious music playing ones to encourage customers to stay on the line for the next operator. Recent studies have suggested that these live answering services have better results in keeping potential customers on the line.
Most businesses that employ more than a few people rely on the use of an answering service, whether or not they have customers calling them. In an office environment with dozens of cubicles and as many employees, it simply doesn't make sense to use a physical answering machine. Rather, the business as a whole subscribes to an answering service, and each employee's phone line is connected to it.
Other institutions, such as hospitals of government facilities, rely on answering services to take their missed calls as well. An answering service is an essential part of any organization with a large number of incoming phone traffic, especially in a medical or political environment when a missed call can have disastrous results.