Making the Case for Lower Turnover
by Jay Minnucci
In most contact centers, the executive team recognizes agent attrition as a necessary
evil. They know there is some expense associated with it, but the general opinion
is that the cost of the cure is likely greater than the benefit. It is your challenge
to change that line of thinking. Building a case stands on three credible arguments:
Argument No. 1: Cost
I know, you want quality to be the top argument, but accept the reality: Cost is
more tangible and, therefore, garners more executive attention. There are some pretty
straightforward elements to the turnover cost:
Argument No. 2: Quality
- Recruitment includes advertising expenses that are easy to find and to which you
would add the cost of the recruiter's time. Interviewing and selecting requires
support from HR, supervisors and managers—all valuable time that could have
been spent working with staff and improving results (est. $3,000 to $5,000 per hired
- Training is another large, direct component of the cost of turnover. Many centers
now report classroom training periods of four to six weeks or even longer. During
this time, the trainee takes few, if any, calls (est. $2,400 to $3,000-plus per
- The costs do not stop when the trainee leaves the classroom. The learning curve
includes another four weeks in lost productivity (est. $2,400).
Once you lay out the cost issue, it is easier to make the case on quality by providing
an objective argument that maps back to the bottom line.
Showing the lower cost of quality starts with agreement on the price of an error.
Develop a clear definition of what constitutes an error (as opposed to a minor "improvement
opportunity") and then apply the same cost to each. The elements that make up the
average error cost will vary by industry, but will generally include the cost of
correcting the mistake and the cost of repairing good will (or the cost of not being
able to repair it).
Once the cost of an error is agreed to, the cost of lower quality is easier to calculate.
For example, if it takes 11 weeks on averag for a new-hire to get to an expected
error rate of 2%, all errors above that in the first 10 weeks are attributable to
the learning curve. Assuming just $50 per error (a very conservative figure), the
additional costs can be over $3,000 per trainee.
Argument No. 3: Consistency
Your WFM team probably has past data on annualized turnover rates that it is using
to predict future rates. They are likely just taking an average of the past year
or two to make this estimate, and dividing the annual rate by 12 to get a monthly
number. The problem is that these numbers are an average, and averages do not often
hold up very well in contact centers. Have your WFM team look at actual data month
by month and compare it to the average, and you will likely see some big swings.
In fact, the difference between projected and actual turnover will be far greater
than the difference between projected and actual call volume.
What is the impact? If you cannot predict turnover, you cannot plan for it. To make
the service level objective, the WFM team will either have to plan on higher than
average turnover rates (causing overstaffing at some points throughout the year),
or you will miss service level objectives when monthly turnover is higher than average.
There is a cost to either outcome.
Putting It All Together
Many centers that have done this type of analysis have put the cost of turnover
at $15,000 to $20,000-plus per agent. Even at the lower number, decreasing the attrition
rate from 45% to 20% in a 200-seat center will result in 50 fewer trainees per year,
saving the organization $750,000 annually. That represents only what we can count—the
intangibles make the real effect far greater.
Now that you have a solid number, you have a case. You also have a break-even point.
Spending $500,000 to get the reduction of 25 percentage points seems less like an
expense, and more like an investment.
Building the argument and generating the buy-in is a starting point. You still need
to identify what is causing the turnover and how it can be corrected. The difference
is that when you start to work these issues, you will already have the support you
need to make the changes.
SNAPSHOT — Nicor National
by Susan Hash
Companies with high engagement typically place a high priority on employee input,
and they tend to solicit their feedback more frequently than others. At Nicor National,
management firmly believes that employee feedback is the cornerstone to creating
a positive, open culture. "The environment that you create for your employees is
the environment that your customers will experience," says Barbara Porter, VP of
business development and customer service. The call center uses Voice of the Employee
tools to collect unsolicited questions, suggestions and concerns from employees
online. In addition, culture surveys, or "pulse checks," are sent out to random
employees on a regular basis. Their responses make up an employee engagement index,
which is tracked on a weekly and monthly basis to help management identify trends.
full story here. (PDF)