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The Retention Connection

The Retention Connection

/ Strategy, People, Development
The Retention Connection

How to turn around contact center agent attrition.

Call centers are vital in today’s business landscape, serving as the frontline for customer interactions and support. Yet, despite considerable investment in employee engagement programs over the last 5-10 years, contact center agent attrition remains a significant challenge.

Over the last 12 months, frontline contact center attrition rates have increased from an average of 30%-40% to an astonishing 65%-80% in some sectors. Not only is this costly to maintain (recruiting, training, coaching costs), but it directly impacts the overall customer experience.

Let’s look at these challenging issues in phases: attrition calculation and costs, why are contact center agents leaving, and four ways to control attrition.

Attrition Calculation and Costs

1. How to Calculate Your Contact Center’s Attrition Rate

To calculate your center’s attrition rate, you need two key pieces of information: the number of agents who left your contact center and the average total number of agents employed at the center during the same period.

Here’s the formula for calculating the attrition rate:

Attrition Rate = (Number of Employees Who Left / Average Total Number of Employees) x 100

  1. Determine the number of agents who left during a specific period (e.g., monthly, quarterly, or annually).
  2. Add the total number of agents at the beginning and end of your chosen period, and then divide by two.
  3. Divide the number of agents who left (from #1) by the average total number of agents (from #2).
  4. Multiply the result by 100 to arrive at a percentage.

For example, if your contact center had 232 agents at the beginning of the quarter and 189 agents at the end, and 45 agents left during that period, the attrition rate would be calculated as follows:

2. When Low Attrition Becomes a Problem

While low agent attrition is generally seen as a positive indicator, attrition can be too low.

We often see this in large corporations or government organizations where employee benefits act as “golden handcuffs.”

Agents tell us that, while they may want to leave, they feel they can’t abandon the goodwill they have earned in terms of benefits and job security. This can result in extremely low attrition rates, which can create potential issues that hinder success, including:

  • Lack of diversity and fresh perspectives. When agents rarely leave the organization, the result can be a stagnant workforce with limited diversity of thought and experiences. Agents become complacent, bored, and passive, translating into an underwhelming customer experience.
  • Complacency and resistance to change. A critical behavior we see in contact centers with low turnover is resistance to change. Employees have seen new ideas come and go and may be slow to adapt to fresh approaches or points of view. Agents become comfortable with the status quo, hindering adaptability and agility.
  • Limited opportunities for advancement. With low attrition comes limited opportunities for career advancement within the center. If agents perceive a lack of growth potential, they may be less motivated and engaged, resulting in reduced productivity and performance.
  • Skill gaps and lack of professional development. When an agent remains in the same position for an extended period, there is a risk of skill stagnation. Organizations may struggle to address skill gaps and provide necessary professional growth opportunities without turnover.

Companies need to strike a balance in employee attrition rates. While excessive attrition can lead to instability and increased recruitment costs, very low attrition rates can hinder growth, innovation, and employee development.

3. What Are the Costs Associated with Attrition?

For every agent that leaves, some substantial costs are involved in replacing them. Hard costs (direct expenses) and soft costs (indirect expenses) may include:

Hard Costs

  • Advertising/Recruitment Agencies. The cost of advertising the position across various platforms, including job boards, social media, recruiting websites, and industry-specific websites. If your organization utilizes the services of recruitment agencies to source and screen candidates, there may be fees or commissions associated with their services.
  • Background checks. The cost of conducting background checks, including criminal record checks, employment verification, and reference checks.
  • Skills assessments. If skills assessments or tests are administered to evaluate candidates’ suitability for the role, fees may be associated with using assessment tools or external providers.
  • Hiring bonuses or referral fees. In some cases, organizations may offer hiring bonuses or referral fees to incentivize employee referrals.

Soft Costs

  • HR staff time. The time spent by HR personnel or management on activities such as posting job ads, reviewing resumes, scheduling, and conducting interviews, and coordinating the hiring process.
  • Training and onboarding. The cost of training materials, software licenses, and time spent by trainers or managers to onboard the new customer service agent and familiarize them with company policies, systems, and processes.
  • Lost productivity. During the initial period, new agents may take time to ramp up and become fully productive. There may be a temporary dip in productivity as they learn the job and gain proficiency.
  • Management and coaches. The time supervisors or coaches spend providing guidance, coaching, and support to the new customer service agent is often underestimated but can be the costliest component of hiring new agents.
  • Technology. The cost of setting up the necessary technology (e.g., computers, logins, software licenses, CRM systems, etc.) required for the job.

It’s important to note that the specific costs can vary broadly depending on the location, industry, and organization. Conducting a thorough analysis of these cost components will help you estimate the overall investment required for hiring a new agent compared to retaining an existing agent.

4. What’s a Good/Poor Attrition Rate?

If low attrition can be problematic and high attrition costly to maintain, what is the optimal level of turnover? The correct answer is: it depends. Contact center attrition rates can vary significantly depending on the industry, location, and other factors.

Here are some things to take into consideration:

  • Industry. Comparing attrition rates to industry benchmarks can provide insights into what is typical for a specific sector. For example, government and finance/insurance contact centers have the lowest turnover rates, while BPOs, travel, and retail have the highest.
  • Age. Contact center agents tend to be younger (average 27-30 years old) and, therefore, can be more transient than other types of employees. For example, agents 20-24 years old have an average tenure of 1.1 years at contact centers, while those 25-34 years old have an average tenure of 2.7 years. If you have a younger workforce, expect a higher turnover.
  • Job roles and functions. Different job roles may have varying turnover rates. Some positions, such as entry-level or high-stress roles, may naturally have higher turnover. They may leave for a modest increase in salary or a better job title.
  • You may also see high turnover among high-demand positions, such as workforce management analysts or experienced operations managers, where compensation has an impact (as does the ROI for their work).

Ultimately, you will need to determine an acceptable level of attrition based on your organization’s specific circumstances and goals. If your contact center is positioned as a low-cost provider, you may need to structure your organization to support high agent turnover. However, if customer satisfaction is a predominant driver, keeping attrition to a minimum will be essential.

Regardless of your organization’s goals, it’s important to continually evaluate turnover rates, identify trends and patterns, and make informed decisions to maintain a balance that fosters a productive, engaged, and sustainable workforce.

Why Are Contact Center Agents Leaving?

Before addressing how to turn around your attrition rates, you need to understand why contact center agents leave your center/organization or leave the customer service/call center industry entirely. Getting to the root of the problem is vital.

Here are seven common reasons for attrition:

1. Conflict with Direct Supervisor

In many cases, the crisis related to agent attrition can be traced back directly to a poor coaching culture:

  • According to a Gallup study, one in two employees surveyed had left their job at some point to get away from their manager.
  • A survey by Randstad US revealed that 41% of employees who had left a job cited their direct supervisor as the primary reason.

A poor relationship with the supervisor or dissatisfaction with their management style significantly impacted their decision to leave.

2. Stressful Work Environment

Contact center work can be highly demanding and stressful, with agents often dealing with irate customers, handling a high volume of calls/emails/chats, and adhering to strict performance metrics. This will only increase as self-serve picks up the more straightforward requests, leaving more demanding, emotion-laden, problem-solving interactions for live agents.

A study by the International Customer Management Institute (ICMI) in 2020 found that 74% of contact center leaders believed that stress significantly contributed to agent attrition. This constant pressure can lead to burnout and dissatisfaction, prompting agents to seek alternative job opportunities.

3. Monotonous and Repetitive Tasks

The repetitive nature of call center work can contribute to agent dissatisfaction. Answering similar inquiries or dealing with difficult customers (repeatedly) can lead to boredom, undue stress, and a lack of motivation, ultimately driving employees to seek more engaging roles elsewhere.

4. Work-Life Imbalance

Contact center schedules often include irregular working hours, evening shifts, and weekend work, disrupting the work-life balance.

Agents may find it challenging to maintain personal commitments, resulting in increased stress and a desire to seek alternative employment options with more favorable schedules.

Certainly, the introduction of work-from-home options has provided call center agents with greater flexibility and work-life balance.

For many agents, the ability to work-from-home is a key driver. This is supported by a study by Owl Labs in 2021 that reported that 32% of employees would quit their job if they were not able to continue working remotely. Despite the benefits, managing remote teams has challenges related to oversight and culture.

5. Lack of Growth Opportunities

Limited opportunities for career advancement within the call center environment can demotivate agents. If agents feel that their professional development is stagnant and there is no clear path for growth, they may be more likely to seek opportunities in other industries or organizations.

6. Inadequate Compensation and Benefits

Compensation plays a significant role in employee retention, particularly at entry-level positions. If call center agents feel that their pay does not adequately reflect their efforts and challenges, they may be inclined to seek higher-paying positions elsewhere.

Additionally, a lack of comprehensive benefits can further contribute to attrition. This is where it makes sense to take a good look at the cost to replace the agent versus a modest adjustment to compensation.

7. Insufficient Training and Support

Inadequate training programs and a lack of ongoing support can leave agents frustrated and ill-equipped to handle customer inquiries effectively. Research by ICMI indicates that organizations with more comprehensive and ongoing training experience lower attrition rates compared with those with inadequate training.

Four Ways to Control Attrition

While it is important to note that every contact center’s circumstances will be different, here are four key areas to consider to reverse the attrition trend.

1. Hire for “Fit”

Having the right number of agents with the right skills is crucial to contact center management. However, even more important is hiring for “fit.”

Organizations prioritizing fit in their hiring process can enhance employee engagement, retention, and performance and foster a positive and cohesive work environment.

The impact of hiring for fit can be seen in various areas, including employee performance, engagement, retention, and overall organizational culture. A 2017 study by Gallup found that when employees strongly agree that their organization hires the right people, they are 21% more likely to be engaged and 59% more likely to say they have the opportunity to do what they do best every day.

Hiring for fit is also associated with improved employee retention. The Society for Human Resource Management (SHRM) reports that organizations that prioritize cultural fit in their hiring process experience a 35% decrease in turnover rates. When employees feel aligned with the organization’s values and work environment, they are more likely to stay with the company for the long term.

While these statistics demonstrate the importance of hiring the right person with the right fit, it’s essential to note that achieving the right fit is a multi-dimensional process. It involves evaluating skills and qualifications and assessing values, personality traits, work styles, and cultural alignment.

Organizations prioritizing fit in their hiring process can enhance employee engagement, retention, and performance and foster a positive and cohesive work environment.

2. Onboard New Agents Effectively

The quality of your onboarding process for new agents is critical to their success and retention within an organization.

Most contact centers find the highest turnover among entry-level or newly hired agents. A well-executed onboarding process sets the foundation for new agents, equipping them with the necessary knowledge, skills, and support to perform their roles effectively.

In addition to comprehensive new hire training on systems, processes, products, and soft skills, effective onboarding demonstrates the organization’s commitment to supporting new agents and their professional development. When new agents feel well-prepared and supported from the start, it fosters a sense of job satisfaction and engagement.

A well-designed onboarding program facilitates cultural integration and alignment, connecting new agents to the organization and its values, which can contribute to long-term retention.

Such a program also includes buddy systems or assigning mentors to new agents. This provides them with a support structure, a go-to person for guidance, and a resource for addressing questions or concerns. Having a mentor or buddy helps new agents navigate the organization, build relationships, and feel supported: increasing their likelihood of staying with the organization.

High-quality onboarding sets a positive tone for new agents’ overall experience, which can significantly impact their decision to stay with the organization. When new agents feel valued, supported, and equipped to succeed, it reduces the occurrence of early attrition and turnover and contributes to long-term retention.

3. Provide Ongoing Opportunities to Learn and Grow

Continuous learning plays a significant role in reducing contact center agent attrition. Agents with access to ongoing learning and development opportunities feel valued, engaged, and more equipped to handle their responsibilities.

Offering clear paths for career progression and growth within the call center organization can motivate agents to stay and invest in their development.

A study by ICMI found that 71% of contact center professionals believed that ongoing training and development opportunities contribute to higher job satisfaction. At the same time, a LinkedIn Workplace Learning Report stated that 94% of employees would stay at a company longer if it invested in their career development.

Even though career progression may be limited, agents continue learning and growing. Offering ongoing training and development programs beyond new hire training can contribute to an agent’s sense of purpose and long-term career prospects, thereby reducing attrition.

Offering clear paths for career progression and growth within the call center organization can motivate agents to stay and invest in their development. While the opportunities for upward mobility may be limited, career paths that show a progression to different queues, mentoring new agents, or cross-training on support functions offer the variety of tasks and skills evolution that many agents appreciate.

4. Express Appreciation

Contact centers are renowned for running contests and employee recognition programs. While these typical incentive programs are great for driving desired behaviors, they do little to inspire loyalty.

And while they are based on the multitude of metrics and KPIs available to measure an agent’s success quantitatively, they do little to acknowledge the average agent who simply does a good job.

Internal employee surveys consistently show that employees who feel valued and appreciated are more likely to remain loyal to the organization. These surveys often reveal a positive correlation between expressions of appreciation and employees’ willingness to stay or leave.

This illustrates the significant impact a simple “thank you” for a job well done can have on an agent’s sense of personal worth and highlights the value of knowing and recognizing people as individuals.

Conclusion

As important as technology is to the success of many contact centers, agents often deal with customer inquiries, concerns, and complex issues that require empathy, understanding, and personalized communication that only they can provide. When it matters most, customers value human engagement as it provides reassurance and a sense of reliability.

In 2020, the Quality Assurance and Training Connection (QATC) reported that organizations with high employee engagement and retention rates experience 10% higher customer satisfaction scores.

Organizations can only enhance call center performance and achieve long-term success by retaining the right contact center agents.

People, after all, matter.

Sharon Oatway

Sharon Oatway

Sharon Oatway is the President & Chief Experience Officer at VereQuest and a skilled business executive, entrepreneur, consultant, speaker, and author. VereQuest provides customizable e-learning designed specifically for contact centers, outsourced quality assurance, QA tools, coaching, and consultative support for contact centers of all sizes.

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