Training Budget Part2
Illustration by Eric Jackson

It’s been a busy few weeks, so I wanted to follow up on a couple of questions I received at the SWPP Conference around my session on attrition. I was focused on how to measure it, but I left out a valuable component… the cost of attrition (pun totally intended). Now I have seen the cost ranging from $2,500-$50,000 or more, but those costs really depend on what you’re willing or able to count.

When I calculate attrition costs, I divide my costs into three categories:

  1. Hard Costs—Clearly measurable at the individual level and easily agreed upon. Things like new-hire training payroll costs (with or without benefits), recruiting screening costs, and performance metrics like AHT increases or utilization. Performance metrics can usually be distilled to a cost per minute or calls, and then their increases in AHT can be calculated.
  2. Soft Costs—Clearly measurable costs that are not associated to an individual. Trainer time can be calculated at the agent level easily enough (salary during training divided by trainees), but this may be considered a cost of doing business because you would need a trainer anyway. Also, QA scores or error rates—if they can be assigned a dollar amount—are often considered soft. Recruiting costs and increased supervision costs are often added here, as well. On the flip side, you get a savings on PTO costs and new-hire salary differences that many people “forget” to factor in. Abandoned calls due to understaffing caused by attrition or poor planning is also often added in.
  3. Fuzzy Costs—Indirect costs attributed to attrition in general. I normally don’t use these (and this is where the number starts to skyrocket), but they include lost customers, lost sales opportunities, wear and tear on equipment, and collateral attrition costs (e.g., we had to replace a recruiter because she got tired of all the hiring classes). Basically, if you can justify it in any way, you can put it in here.

When working with my clients, I figure out what level of costs they find acceptable to count. Then I create a tiered cost matrix by type (I rename “fuzzy costs” to “opportunity costs”) and then by specific item. That way, they can see what we counted and decide to add or remove things.

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