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Turnover Costly to Call Centers

High rates of turnover among call center employees cost the teleservices industry $5.4 billion a year, representing more than 40 percent of the industry's annual $12 billion earnings, according to a study by Sibson & Co., Princeton, NJ.

The study found an annual 31 percent turnover among the estimated 2.5 million employees at call centers in the United States. The average turnover for all U.S. industries is 15 percent, according to the study, released earlier this month.

Losing employees means more than increased costs for finding and training replacements, the study found. Turnover makes it harder for companies to keep customers and find new ones, and growth opportunities are fewer because so much time is invested in hiring and training.

The low unemployment rate — 4 percent nationally as of July, according to the U.S. Department of Labor — makes turnover an even bigger problem, the study found. But many managers wrongly think there is no way to reduce turnover when, in fact, steps can be taken, and reducing turnover by half can increase a call center company's market value by one-third, the study also said.

“Unfortunately, this is one of the industries where many managers feel 'this is the way it is, this is the way it's always going to be and there's nothing we can do about this,' ” said Elizabeth Hawk, principal at Sibson. “Well, nonsense.”

Hawk said the study's results are probably conservative, and the numbers do not include inhouse corporate call centers. Many call centers have annual turnover of more than 100 percent, she said.

The study found that costs for recruiting and training new employees run around $7,000 a head, Hawk said. But that figure doesn't factor the cost of rookie employees who lose customers.

Nor do the “hard” costs associated with replacing agents include the loss of market information a veteran might gather that a new employee would not, Hawk said. Part of a call center's job is to collect information that can affect a company's business strategy, and rookies aren't as effective at gauging customer reaction to products.

To battle the trend, managers must choose the right people for the job and make the workplace more attractive for employees — and not just by increasing salaries, Hawk said. Management should focus on building a team environment, giving employees a sense of having a stake in the company and providing good equipment and a friendly atmosphere.

Investing more time and money in recruiting the right agents will save money in the long term, Hawk said. It's important to hire people who can handle the environment.

“A lot of these roles are pretty isolated,” Hawk said. “You strap on a headset and don't talk to the person sitting in the cubicle next to you.”

West Teleservices, Omaha, NE, plans ahead for turnover by selecting call center sites with a good labor pool, particularly in areas with a college or military presence, said Carol Paydon, chief financial officer at West Teleservices.

“They give us a lot of people looking for flexible schedules,” Paydon said.

But the company has found it has good success at getting employees to return after they have left, Paydon said. West Teleservices offers a good benefits package, available to anyone who works 30 or more hours a week.

Sheena Wilson, senior vice president for human resources at Sitel, Baltimore, said she agreed with Sibson's recommendations. Her company has even outlawed the use of the words “attrition” and “agent,” opting instead for “retention” and “customer service professional.”

“For example, ask people to report on retention, and there is an immediate implied requirement for action,” Wilson said. “Ask people to report on attrition or turnover, and you'll get a report.”

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