Call Center Scheduling Featured Article
Calculating The Costs of Your Contact Center's Turnover Rates
If you’re a contact center manager, you know the scenario. You spend the time bringing a candidate in for an interview, find he or she is a pretty good fit, and hire and train that person. Just about the time the new agent is starting to show skills and knowledge, he or she quits. This leaves you one agent short until you can begin the recruiting and hiring process all over again. It’s an expensive, time-consuming never-ending revolving door.
The truth is, however, that all industries have turnover, and the call center’s average turnover is higher given the nature of the work. So how do you really know if your organization’s turnover is higher than usual? Jeff Toister of Toister Performance Solutions, Inc., recently blogging for Customer Think, provided some guidance to contact center managers. You can calculate your overall turnover rate for any given time period (month, year) with this simple formula: Employee Separations/Active Employee Count = Turnover Rate.
“For example, let’s say you had 40 employees leave and you have 100 active employees (on average) over the course of one year,” wrote Toister. “Your turnover calculation would be: 40/100 = 40 percent.”
Toister noted that it’s helpful to separate “bad turnover” from “good turnover” when you’re calculating attrition rates.
“Bad turnover is when an employee is either fired or quits the company entirely,” wrote Toister. “Good turnover is when an employee leaves the job for another opportunity within the company, usually a promotion.”
Let’s say you calculate “bad turnover” and determine your rate is 30 percent. How do you determine if this matches up with the rest of the contact center industry? For starters, you can compare your current turnover rate with your own historical data. What was it like a year ago with your organization, or even five years ago? Are the numbers getting higher? In this case, it might mean it’s time to make some improvements that can help retain agents for longer (better working environment, more amenities, more flexible hours).
While it’s helpful to compare your turnover rates to other companies in your industry, Toister notes that these figures can be hard to come by. Few companies broadcast their attrition rates for market researchers to take advantage of in compiling helpful benchmarks. If you feel you’re spending too much recruiting, hiring and training agents only to lose them, strive for a reduction by one-third of your existing “bad turnover.” (If your current bad turnover rate is 30 percent, take steps to reduce it by 33 percent to a bad turnover rate of 20 percent, for example.)
It also helps to calculate your true costs of turnover, according to Toister. This can be done by attaching numbers to hard costs such as the hiring process, training costs and the overtime that must be paid to other agents due to short-staffing. (Toister provides a turnover cost spreadsheet in his article.) Calculate the hard costs of your current bad turnover rate, then calculate what it would cost if your rate was one-third lower. Is the amount substantial? Is it worth making the effort to reduce the rates? What could you do with that money that might lower turnover rates even further?
It’s important to keep in mind that high turnover doesn’t just hurt a company’s bottom line. It also hurts relationships with customers, so be sure to factor those “soft” costs into the calculations when you make them. Chances are good, whatever your calculation, the real costs of lost opportunity with customers is even greater.
Edited by Stefania Viscusi