Turnover… But Not the Good Kind

FROM THE AUGUST 2019 ISSUE

Challenges and Priorities Survey

The word “turnover” can make either your mouth water or your head hurt. Blueberry turnovers are one of my favorite sweets in the summer… freshly picked wild blueberries wrapped up in puff pastry and baked to a flaky golden brown. Yum yum! However, I realize that if you are reading this article, you are not here to share food favorites or recipes!

The “turnover” causing contact center leaders headaches is the loss of talent, particularly the frontline agent. I have been doing research lately on the top challenges contact centers are facing. Guess what? The number one identified issue both from my research and from my own work is the retention of talent at the front line. This issue is of grave concern today, especially considering the very low unemployment rate. It’s kind of like everyone who wants a job has one! Today, employment options exist in the marketplace—and often within your very enterprise—for trained contact center agents. Agents will exercise these options when the position ceases to meet their needs. This poses another challenge. For the most part, those leaving are the folks you wish would stay!

According to a study conducted by Cornell University and published in its Global Call Center Report, the average turnover rate in North American contact centers is 25% to 33%. Larger centers in certain industries may experience turnover rates upward of 45% to 60%, on average.

Here are some interesting findings from the report.

  • Costs of turnover. The costs of turnover are high. On average, replacing one agent equals 16% of the gross annual earnings of a contact center worker. This means that the simple replacement costs for one worker equals about two months of a typical worker’s pay. If lost productivity is taken into account, replacing one worker equals between three and four months of a typical worker’s pay.
  • Labor costs. The cost of turnover also impacts labor, particularly given that labor represents a high portion of total costs in contact centers—typically 70% of costs in North American centers.
  • Job quality. If the extent to which a job promotes employee well-being is used as the primary indicator of job quality, then a high-quality job will combine high job discretion with low performance monitoring.
  • Job quality and turnover. The typical level of turnover in contact centers with very high-quality jobs (high discretion and low monitoring) is 9%; it is 36% for low-quality jobs (low discretion and high monitoring).

Anyone who deals with high turnover understands the issues. But what about the solutions? I believe that the solutions lie in addressing the quality of the job. The Cornell study identifies a couple of interesting aspects of job quality.

The first is job discretion. According to Susan van Dalen of Tilburg University and author of the report, “Job Discretion and Compensation Characteristics”: “Job discretion refers to a certain range of effort levels that an employee may take concerning to their job.” Think about what happens if frontline agents put out the lowest level of effort. What does that mean in terms of quality? I believe that the outcome is mediocrity, and we all have encountered that. A mediocre performance often sits on the border of bad and is quite a challenge to redirect.

Contact centers around the world are looking for ways to automate “low complexity” contacts via web, mobile apps, advancement of AI and bots. The live agent will be handling increasingly complex interactions that require a higher level of effort and critical-thinking skills.

How do we engage the front line to deliver a higher level of effort that will contribute to retention rather than turnover? According to van Dalen, “In order to encourage employees to exert higher effort, the organization applies different incentive schemes such as performance-related pay and efficiency wages.” The Cornell study suggests that high-quality jobs, in the contact center are those with “high discretion and low monitoring.”

High discretion is linked to the control that agents have over the interaction and the transaction. If agents have to transfer, hand off and escalate to fulfill customer requests on a regular basis, they are likely to invest the least level of effort since they lack a reasonable amount of discretion.

So it seems that retention requires a combination of high discretion within the job, low monitoring, and compensation/incentives that match the demands of the job.

It is critical to examine processes within your own contact center as a means of evaluating level of discretion. Are you building in hand-offs rather than empowering agents to complete transactions? Take the e-commerce agent who has to hand off any loyalty program/refund or return questions to another group, or a healthcare “scheduler” who is tasked with front-end work but must hand off to the practice for actual appointment scheduling. Agents may feel somewhat disengaged since they are not able to “complete” the contact. Agents who are not “allowed” to complete transactions miss out on the satisfaction of completing a task, even one that may take more effort. So maybe if we increase responsibility to improve level of effort we will improve job quality and reduce turnover.

To accomplish this, we must invest in staff training. For decades, training has been an issue in contact centers. To this day, I cannot comprehend that contact centers—large and small—have no actual “trainers,” a formal training program or (heaven forbid) a dedicated training room. The side-by-side model employed by far too many is one fraught with issues, not the least of which is scalability. It may be one thing if you have a team of 10, but the model is NOT scalable if you are a growing entity. It will be outgrown before it is ever effective.

The concept of low monitoring will send some contact center leaders into a panic. I firmly believe that too many organizations spend far too many hours tracking individual agent performance. They try to solve foundational issues by increasing scrutiny of the front line. They systematically ignore the recruiting, hiring, training, process and staffing issues that contribute to poor job quality.

While van Dalen mentions applying “different incentive schemes, such as performance-related pay and efficiency wages,” we must be cautious about applying incentives in the contact center that may create conflicts in quality. If agents are given productivity incentives around calls handled, you may find your agents hanging up on callers to raise their number. When quality scores are linked to compensation increases, coaches sometimes adopt a form of grade inflation in order to not interfere with agent compensation. Any incentives must be vetted for conflict; always focus on quality over quantity and teams over individuals.

I believe that employers recognize the value of retention but haven’t necessarily linked it to the requisite investment. Subsequently, a blame game occurs and a lot of chaos ensues. The emphasis is on “fixing” symptoms (e.g., late, tardy, absent, loss of productivity/quality) rather than “self-reflecting” to consider the impact of poor training, convoluted technology tools, imprecise hiring, low wages, skimpy benefits, a crummy habitat, poor management, and other factors often controlled outside the contact center.

High turnover results when a lack of investment in proper recruiting, training, employee engagement and career path options combine. The management team is often criticized for this condition when very often it has put forward budgets to address deficiencies and these are denied. The challenge is that you can’t prove a negative… but you can forecast problems. It is critical that when deficiencies are identified in budgetary arenas, management points out exactly what the budget denial will yield. Sadly, this happens infrequently due to the cultural impact of calling your boss out on being responsible for future failures. So you try and try to make due, but the yield is more headache than solutions.

Cornell University found that businesses which took a “high-involvement” approach to selection, training, incentivizing and investing in contact centers had an average attrition below the average rate of 25% compared to a rate of 45% in low-involvement environments.”

In my mind, the negligence associated with poor investment in job quality fits my newly formed acronym RONI. The Return On Not Investing is quite honestly the cost of turnover! Not the good kind!

FROMContact Center Pipeline August 2019
Kathleen Peterson
Kathleen M. Peterson is the Founder and Chief Vision Officer of PowerHouse Consulting, Kathleen is an acclaimed Contact Center consultant and recognized industry visionary. She offers a refreshing and sometimes challenging philosophy to positioning the Contact Center as the true lifeline of the enterprise—believing that vision, brand, leadership and execution combine to deliver a powerful customer experience. Kathleen has emerged as one of the most sought-after experts and consulting partner in the field of customer experience working with the world’s top customer-focused companies, and is published widely in the most prestigious industry journals in the U.S. and abroad. As a featured speaker at conferences and Fortune 500 companies, she has shared her humor, knowledge, and experience across four continents, including Contact Center conference keynotes in the United States, London, Paris, Turkey, Dubai, and Hong Kong. Kathleen also served as Conference Chair for the North American Conference on Customer Service Management.