Training’s Impact on Turnover

By Rosanne D’Ausilio

Agent turnover has always been, and continues to be, a chronically costly problem for call centers, a problem that seems to be tolerated rather than solved. Average turnover in the contact center is reported at 40 to 50 percent. Respondents to a FurstPerson survey reported an average monthly attrition rate of 7.18 percent. As you read further, you’ll see what that costs.

Although 90 percent of corporate executives say that employees are the most important variable to a company’s success, a Towers Perrin survey reported that in practice they rank people-related issues far below other business priorities. Executives agreed that improving employee performance would improve business results; 73 percent 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 that the mouth and the feet don’t always go in the same direction.

A profitable workforce requires knowledgeable, conscientious, service-oriented employees who enjoy their responsibilities. To achieve this, training is crucial. Recent studies in service industries link increased training to decreased employee turnover. For instance:

  • Ryder Truck Rental discovered that among employees who participated in training programs, the turnover rate was 19 percent. For employees who did not participate, the rate soared to 41 percent.
  • Guest Quarters Suite Hotels reports that their low turnover rate is one indication of employee satisfaction. Additionally, but not surprisingly, there is a positive correlation between training, employee satisfaction, and guest satisfaction.

At this time, when nearly all businesses are looking for ways to cut costs and save money, reducing 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 to be $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. In other reports turnover is reported to be as high as $8,500 per person, plus other intangible costs.

As an example, here’s a typical scenario with 100 people and a 30 percent turnover rate (meaning that thirty people leave annually). At a cost of $8,500 per employee, this equates to an annual turnover cost of $255,000. That’s a quarter of a million dollars for a 100-person company! Add to this the additional cost of the learning curve. For instance, when senior representatives, supervisors, and/or managers must spend time with new hires this obviously takes away from their own productivity.

Also, taken into consideration must be those having to take on the additional workload because of short staffing or because new hires are too inexperienced to be on their own. There is also the subsequent declining morale that goes along with these examples. All of this negatively affects productivity and customer (internal and external) and employee satisfaction.

Can you begin to see the easy justification for investing in a training initiative of $60,000 that could reduce turnover for an almost 4:1 return on your investment? Sounds like a slam dunk to me!

Rosanne D’Ausilio, PhD, is an industrial psychologist, consultant, master trainer, best-selling author, executive coach, customer service expert, and president of Human Technologies Global, Inc., which specializes in human performance management. Over the last twenty-five years, she has provided needs analyses, instructional design, and customized, live customer service skills trainings as well as executive/leadership coaching. She also offers agent and facilitator university certification through Purdue University’s Center for Customer-Driven Quality.

[From Connection Magazine Jan/Feb 2013]

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