The cost of turnover is more than the dollar amount you spend to fill an agent’s seat. Every time your contact center loses an agent, operational costs skyrocket. Your remaining agents get overloaded with interactions, so they can’t keep pace with volume, and your CSAT drops. Then, team morale takes a hit, too.
Pair those losses with the negativity swarming your contact center as people call into question why their desk neighbors keep leaving, and you reach a productivity and CSAT standstill. Your customer relationships suffer. Your team composition falls apart. And you have no time left to fix it because you’re too busy reviewing resumes and interviewing candidates to backfill all your open positions.
And with almost a quarter of your agents having one foot out the door, do you really understand what turnover means for your contact center?
Putting a dollar sign to the organizational cost of employee turnover.
High turnover takes a hard hit to your bottom line. As turnover increases, so do your operational costs. HBR researcher Keith Ferrazzi estimates the total organizational costs of employee turnover range between 100 percent and 300 percent of the exiting employee’s salary.
Given that the price tag for simply filling an agent’s seat is $10,000 to $20,000 per agent, Ferrazzi’s estimate is spot on when you account for all the other associated costs of attrition. Look through the productivity lens to see where else you’re leaking cash. That $10k to $20k doesn’t account for the lost productivity costs leading up to the time your agent leaves. Or the lost productivity costs during your new agent’s ramp time. And it leaves out the morale costs that come with all the desk neighbors trying to figure out why treasured co-workers are leaving. Not to mention, all the time costs associated with you stepping away from your daily work to train new hires.
Let’s put our math whiz hat on and crunch the numbers.
Using HBR’s estimate coupled with standardized salary information, we can calculate a ballpark figure for your cost of employee turnover. In May of 2019, Salary.com reported the average salary of a customer service representative as $35,211.
If you run a contact center with 100 agents and have an industry-standard 45 percent attrition rate, you spend anywhere from $1.6M to $4.8M EACH YEAR on turnover.
That’s a pretty penny.
With costs that staggering, it’s easy to see why reducing turnover tops the priority list in contact centers. Turns out, reducing attrition by only 5 percent can put anywhere from $176k to $600k back in your company’s wallet. Even better, when you put an intense focus on turnover and keeping engaged, empowered employees in their seats, a 20 percent reduction in turnover can lower operational costs by $704,000 to $2.1M.
Where do all the costs of employee turnover come from?
Perpetual turnover comes at a tall cost to your bottom line. Your customer metrics, agent morale and productivity, and lifetime value of your employees all add up.
A closer look.
Operational costs: Here, we’re talking about the costs of recruiting new agents, from the first job post to the first foot in the door. That means HR’s job posts, time for interviewing, and onboarding. It also includes new-hire training materials, and manager and HR time for initial training, too.
New agent productivity costs: It takes the average agent 8-12 months to ramp to the full productivity of a tenured agent. New hire learning curves can cost companies anywhere between 1 to 2.5 percent of business revenues.
Employee Lifetime Value costs: As agents stay with your company, their value increases. They know how to communicate with your customers and how to solve product-or service-specific problems. Plus, they know where to reach out for help if they need it. But these experienced agents only grow in their knowledge and skills with time. (And plenty of development and contextual feedback from you, of course.) The LTV of an employee who stays in their seat for 3+ years can reach up to 6x the amount of less-experienced employees.
Customer Satisfaction costs: Agents in ramp don’t have the product knowledge they need to solve customer issues as fast or as well as your more experienced team members. This leads to prolonged customer service interactions, lower FCR, poor customer conversations, and less-satisfied customers.
Agent morale and cultural costs: Companies average 51 days to fill open positions. That’s nearly two months where you’re understaffed and overworking your other agents, leading them to their tipping point, too. Plus, as agents leave, others contemplate why, risking the domino effect. And, it starts the negative, potentially toxic conversations about employee morale and workplace opportunity.
Here’s how to improve turnover and decrease those outrageous costs.
Show your employees how much you value and care about them, starting with onboarding. Define their roles and daily tasks and be upfront about how stellar performance can lead to growth of responsibilities. Then, keep the ball rolling with continued development, frequent feedback, and more conversations about opportunities to advance with your company.
A Bamboo HR survey said 33 percent of employees left their jobs within 6 months after starting. Of that group, 23 percent said clarifying job responsibilities could have kept them in their seats. And, 91 percent of employees who changed jobs had to leave their current company to do so. Improve transparency and map out well-defined options for career progression to keep agents planted in their seats.
And, celebrate the small wins and big milestones as you go. Quitting typically peaks around work anniversaries, with 10x as many employees leaving after only one year compared to five years. Create specific, 30-60-90-day plans for agent development, and put a one-year check-in on the books to minimize the mass exodus, too. Companies who implement regular feedback see turnover 15 percent lower than those who scarcely talk about performance with their teams.
With all the costs that come with turnover, there’s major ROI in the time you spend coaching and developing your agents to happiness.
Be a better coach and reduce turnover with these 5 data-backed strategies to improve your contact center coaching.