phallerAverage turnover, reported at 40% to 50%, has always been, and continues to be, a chronically costly problem for call centers, a problem that seems to be tolerated rather than solved. Respondents to a FurstPerson survey reported an average monthly attrition rate of 7.18%. Annualized, a 40% annual turnover estimate becomes an actual turnover rate of 87%. As you read further, you’ll see what that costs!
Although 90% of corporate executives say that employees are the most important variable in their company’s success, a Towers Perrin survey reported that in practice they rank people-related issues far below other business priorities. Executives agreed improving employee performance would improve business results; 73% even said their most important investment was people. However, people-related issues, such as training and compensation, consistently ranked at the bottom of the list. It seems the mouth and the feet don’t always go in the same direction.
Training is Crucial
A profitable workforce requires well-trained, knowledgeable, conscientious, service-oriented employees who enjoy their responsibilities. Training is crucial. Recent studies in service industries link increased training to decreased employee turnover.
For example:
- Ryder Truck Rental discovered that among employees who participated in training programs, the turnover rate was 19%. For employees who did not participate, the rate soared to 41%.
- Guest Quarters Suite Hotels report their low turnover rate is one indication of employee satisfaction. Additionally, but not surprising, there is a positive correlation between training, employee satisfaction, and guest satisfaction.
Turnover is a Priority
At this time when nearly all businesses, are looking for ways to cut costs and save money, turnover should be a priority. Disruption of workforce stability should also be of concern to those who manage the customer care process.
FurstPerson reports the average cost of attrition at $5,466 per person. Interestingly, the cost of attrition in an internally managed contact center was reported at $7,994 per person, more than twice the cost of attrition at an outsourced center which was reported as $3,420 per person.
The disparity in cost is most likely related to the amount of time and money that is dedicated to training individuals in an internally managed contact center. And we’ve seen turnover in other reports as high as $8,500 per person +++
Following is a typical scenario with 100 people and a 30% turnover rate:
100 people
x30% turnover
30 (people are leaving annually)
x$7,500 average (conservative) cost of new hire
$225,000+ + + = Turnover cost
Note: The +++ represents the additional cost of the learning curve. For instance, when senior representatives, supervisors, and/or managers need to sit with or give time to new hires this obviously takes away from their productivity.
Also, you need to factor in consideration of the people having to take on the additional workload because of the short staffing, or because new hires are too ‘green’ to be on their own. Then there is the subsequent declining morale that goes along with these examples. All of this impacts productivity negatively, customer (internal and external) satisfaction, and employee satisfaction.
Can you see the easy justification for investing in a training initiative of say $60,000 that could reduce turnover for almost a 4:1 return on your investment? Sounds like a slam dunk to me.
Rosanne D’Auslio, Ph.D., President of Human Technologies Global, Inc. known as ‘the practical champion of the human,’ is an industrial psychologist, consultant, master trainer, bestselling author, executive coach and customer service expert.
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