Employee turnover continues to plague the call center industry. Some centers report annual attrition rates as high as 500 percent, and turnover percentages of 200 percent per year are common. At these levels, the costs and effort of recruiting, staffing and training are enormous. Worse, the hidden costs associated with poor customer service and employee job satisfaction are even higher than the direct costs.

Based on my work on over 100 employee turnover improvement programs in the call center industry, I have come to three conclusions:

Acceptance. Acceptance of the situation is perhaps the single biggest barrier to improving the problem. I wish had a dollar for every time I heard someone say, “It’s just the nature of this business. You have got to learn to live with it.” This stoic acceptance will never solve the problem and inevitably leads to solutions such as “beefing up” the recruiting, staffing and training programs, which translates to simply working harder to accomplish tasks which are not solving the real problem in the first place. It brings to mind visions of Charlie Chaplin’s Tramp trying to keep pace with an increasingly speedy assembly line. It doesn’t work, and ultimately collapses in chaos. When this occurs, many companies resort to outplacement: let someone else deal with it! Working harder at traditional solutions to the turnover problem is similar to “running faster and faster to the east looking for a sunset." Despite good intentions, it isn’t going to happen. Acceptance is capitulation to a less-than-adequate call center operation which will, at best, never improve and, in most cases, will deteriorate.

Measurement. Correct and specific measurement of the turnover issue is the first step in the journey to significantly lower employee turnover rates. Almost all call centers miss this crucial point. Specifically, turnover is measured and reported as an annual percentage. I have asked thousands of managers to tell me their turnover rate, but I don't believe one of them has told me anything other than their annual percentage per year. While this measurement has some meaning (mostly because that’s the way it has always been reported), is a blunt metric and not readily adapted to one of the most effective management tools: accountability!

Isn’t it easy to duck accountability for an annual number? Wouldn’t it be much more effective to hold managers and supervisors accountable for metrics such as the 30- or 60-day turnover rate? Therein lies the secret of meaningful and useful turnover measurement. Measure short-term and more immediate benchmarks. Managers should track and report 30-day turnover rates rather than annual rates. This will make supervisors more accountable, and turnover will start to improve quickly.

Little improvements in the 30-day attrition rate will lead to big improvements in the annual rate. The first step is to identify the call center “attack” zone. In figure 1, this occurs between time unit (months) one and two.

After the second time unit, the line begins to flatten and turnover rates drop. My experience is that this curve is a reality for any company with turnover issues. Most turnover occurs early in the employment cycle, and that is where it must be attacked and that is where supervisors must be held accountable.

In figure 2 (on the next page), we can see the effects of long-term improvements that result from small improvements in the "attack zone."

In this example, an improvement of five percent in time unit one results in a 20 percent annual improvement. Put another way, if your annual turnover rate is 100 percent and the turnover rate in time unit 1 is 20 percent, a five percent improvement in time unit one is a “save” of one person. This one person “save” in the first time unit yields a save of 20 fewer hires throughout the year.
It is like compounding interest in
the bank.

The ROI implications of this are phenomenal. If, for example, the hard dollar cost of hiring and training an operator is calculated at $2,500, one save in time unit one results in 20 fewer annual hires and real dollar savings of $50,000 per year.

Early reinforcement and reward of key turnover behaviors. Now that we have established that most employee turnover happens very early in the cycle, it's time to make a paradigm shift and focus on why people stay beyond time unit two as opposed to why they leave. Study after study has reported that at the lower organizational levels, people stay because of positive relationships with their coworkers and supervisors. That
being the case, doesn’t it make sense to identify and reinforce anything which is likely to encourage and strengthen those bonds? A study by Dee Hansford stated that, “85
percent of front-line employees leave their jobs because there is someone they don’t get along with, usually their supervisor.”

Anything that nurtures job social bonds can improve the turnover problem. With that in mind, here are a few inclusion behaviors that should
be rewarded:

• Coworkers who introduce themselves to a new employee on the first day of work;
• Coworkers and supervisors who go to coffee break or lunch with new employees;
• Coworkers who carpool with new employees;
• Coworkers who bring cookies to work;
• Employment and training supervisors who visit new employees to see how things are going;
• Supervisors, managers and coworkers who write personal welcome notes to new employees;
• Coworkers who refer a potential new hire. It is well established that new hires who were referred by existing employees are much more likely to be successful as employees.
• All group members when the new employee reaches a critical anniversary date, such as 60 days; and
• All group members who attend extracurricular events such as open houses, picnics, parties and luncheons.

If the preceding behaviors are rewarded, they will be reinforced, and if they are reinforced, they will enhance the improvement of turnover in the “attack zone."

A Call Center Case Study
A 1,500 seat call center had an annual employee turnover rate of 278 percent. The center had survived by a continual barrage of recruiting programs which barely managed to keep pace with the ever-present empty seats. The company invested in new work stations, increased wages and added a comprehensive health care program. Yet turnover did not appreciably improve. Then, the company sponsored an intensive supervisor training program designed to make supervisors more sensitive to the needs of employees. It didn’t work.

Finally, the call center decided to implement many of the procedures outlined in this paper. The first step was to measure turnover in short increments and identify their company-specific "attack zone." This analysis yielded the results in Figure 3.

Notice that by the end of the first month, 25 percent of all new hires had terminated. By the end of month three, 52 percent had left. This was the "attack zone." It was also revealed that 92 percent of all new hires had terminated before their one-year anniversary data. The overall result of this attrition was an annual turnover rate of 278%.

The company used these data to communicate the new turnover measurement goals (30, 60 and 90 days) throughout the organization. New accountability reports were designed to be compatible with the short-term metrics and concentrated efforts were made to remove references to the annual rate. The new company lexicon included statements such as, “What is your 30-day turnover rate?”

Next, a comprehensive reward and recognition program was established to previously. The emphasis was to encourage behaviors related to new employee “relationship bonding” and reward all affected stakeholders for early turnover accomplishments.

To solve these problems, an online program was established which automatically rewarded employees with online game tokens when specified metrics were met. For example, an employee who referred a job applicant was immediately rewarded with 150 game tokens. The token recipient could then go to the company Web-based game room and use the tokens to play a quick, random payout game which yielded a range of 2 to 5,000 points. The points were then automatically added to a debit card which, in turn, could be redeemed at any place that accepted Visa cards. The net result was a turnover incentive program that instantly rewarded related behaviors.

Additionally, all new hires were “set up” with a token and online game account as soon as they reported to training. This immediately established a fun and rewarding training experience. Trainees were encouraged to play the games with coworkers, which facilitated the bonding process. Tokens and subsequent games were used extensively throughout the entire training process. For example, training goals and accomplishments were broken into small learning and educational tasks and instantly rewarded.

The results were immediate.

Figure 4 shows that the 30-day rate decreased from 28 percent to 20 percent. Eight percent does not seem very significant until the compacted effect on the annual rate is considered. In this example, the eight percent improvement in the 30-day "attack zone" rate resulted in an annual decrease of 133 percent. Small improvements in the 30- to 90-day “attack zone” result in large improvements in the traditional annual measurement results.

Immediate employee recognition was an integral element of this effort. Research has consistently demonstrated that employees who feel they are recognized for their work are more likely to stay with their employer. To determine the effects of the online game recognition component, an online survey (using tokens as a reward for completing the survey) was conducted of all participants.

Figure 5 shows a 95 percent program approval rate.

Figure 6 shows the perceived level of recognition. It shows that 83.5 percent of program participants felt their level of recognition (for the turnover-related behaviors) was higher than before the program began.

Clearly, the awareness, measurement and online recognition program had a positive effect on the reduction of employee turnover. Additional surveys revealed that job satisfaction levels increased, as well. One can only assume the positive effect this has had on customer service. Employee turnover should not be considered inevitable and a necessary evil in the call center industry. Those centers that recognize that the problem has solutions and that take proactive steps in accordance with the principles in this study can expect to move ahead of the pack.

Dr. Brooks Mitchell is a Professor of Management at the University of Wyoming and the founder of two successful Wyoming-based software companies. The first company, Aspen Tree Software, was the originator of the Computerized Employment Interview and a pioneer in the Internet job application process. In 1997, Dr. Mitchell sold this company to SHL Ltd., the largest international company in the business of employee testing. In 1998, he started Snowfly Performance Solutions, Inc., which provides an Internet-based employee recognition and incentive system.

Stefania Viscusi is an established writer and avid reader. To see more of her articles, please visit Stefania Viscusi’s columnist page.