Nearshore Americas
Fatter Paychecks and WFH Won't Save CX From High Churn Rates

Fatter Paychecks and WFH Won’t Prevent High CX Agent Churn

It is increasingly evident that fatter paychecks won’t solve the alarmingly high churn rates in the global customer experience (CX) industry

As demand keeps climbing and the market pushes towards improved performance at the same or lower costs, CX vendors will have to move beyond the deceivingly common sense strategy of salary increases to keep agents around.

It must be underscored: wages still play a very important role in agents’ decision to remain with a CX provider. A recent study by analysis firm McKinsey & Co. shows that agents consider wages and job security as the most important factors defining the likelihood of sticking with their current employer.

But salaries didn’t win by much. Trailing right behind it were “softer” or less quantitative factors, such as promotion opportunities, alignment with the company’s mission, a sense of belonging in the workplace and the levels of stress employees are being exposed to. 

Other studies point to similar findings. A report by Calabrio shows that a third of agents is considering leaving his/her post soon, with 96% of them mentioning high levels of stress as a major reason. Another study –this one by 5th Talent– states that fatter paychecks have “little impact” on call center turnover.

“People aren’t quitting only for more money and then having massive regrets afterwards. What employees want from work has evolved, and they have low tolerance for anything else,” states 5th Talent in their document. 

Clients might become less price-sensitive [in a context of high inflation]. This means that, while pricing is still key, lowering turnover has become more relevant than ever.

Increasing salaries is not a happily-made decision, but CX vendors might find it easier to swallow in a context of high inflation. Market reports point to vendors requesting significant rate increases post-COVID. 

Although there’s little data on whether customers are actually accepting rate hikes, industry analysts told NSAM that clients might become less price-sensitive, opting to fork out more money as long as they can deal with the growing demand for customer service. This means that, while pricing is still key, lowering turnover has become more relevant than ever for a successful CX operation. 

McKinsey warns about betting the farm –or the call center– on wage increases. Although salaries weigh heavy on agents’ minds, those are “largely determined by industry and market dynamics”. Executives are limited in what they can do about what goes into those paychecks and should, therefore, “focus on factors they can fully control”.

Employee Experience is Key

The crisis of talent in CX happens under the umbrella of the so-called “Great Resignation”. Many industries face a very tight job market, with employees quitting left and right as job vacancies are getting harder and harder to cover.

This phenomenon threw a spotlight on the relevance of employee experience for the success of any business. For CX –an industry infamous for its high levels of stress and employee dissatisfaction–, the conversation is crucial. 

“The employee experience is primarily what separates organizations regarding turnover and performance […] High turnover will continue until employee experience improves,” 5th Talent points out in its report.

An engaged, satisfied agent has an impact beyond lowering attrition levels. Research suggests that the longer an agent stays with the company, the better he/she performs as a customer service provider and even as a brand representative, leading to greater levels of buyer satisfaction. 

“High turnover will continue until employee experience improves”—5th Talent

Employee experience isn’t limited to agents in the frontlines, though. Dissatisfaction in management can translate into even higher levels of stress. Plus, a revolving door in management can lead to a start-and-stop cycle in leadership which impacts the smoothness of business operations. 

“One critical ingredient for success is a highly developed front-line management team,” points out 5th Talent. “They are now the face of the company to employees, and they are the driving force behind a positive employee experience.” 

Was Remote Work All Hype?

Employers and employees in many CX companies are still engaged in a tug-o-war over which workplace model will emerge as the dominant one: traditional office work, hybrid or work from home. 

The great majority of agents prefer WFH, and those that accept a hybrid set-up rarely step foot in the office. This has convinced companies that a remote or hybrid delivery model might help reduce the high levels of churn. Yet, these hopes have been deflated by the reality of the industry. Turnover levels remain largely unchanged, pointing to high levels of agent stress and dissatisfaction even as they work from the comfort of their homes.

If companies decide to return to a traditional delivery model, they’ll have to make the office experience worthwhile. This has driven employers to try their hand at “beautifying” office spaces, going for a “open campus aesthetic” designed to seduce employees. 

For those choosing a hybrid or WFH model, they’ll have to lean heavily on supervisors as bridges which extend company culture to remote working stations and push for self-management in employees.

Leveraging Tech

Several research and consulting firms are pushing hard for the adoption of digital onboarding, training and management solutions as a tool to ease the high levels of attrition in CX.

A recent report by TechSee strongly recommends using automation to unburden agents from menial and repetitive tasks, allowing them to focus on more productive and complex ones that would be, at least in theory, more engaging.

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Everest Group has made similar recommendations, pointing to trainer bots, AR/VR based-training and monitoring through AI as valuable tools to increase agent satisfaction, performance and prospects for growth.

According to their data, using tech-based solutions to recruit, train and engage employees increases agent satisfaction between 21% and 41%, while pushing retention levels up to 20%.

Cesar Cantu

Cesar is the Managing Editor of Nearshore Americas. He's a journalist based in Mexico City, with experience covering foreign trade policy, agribusiness and the food industry in Mexico and Latin America.

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