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TRANSCRIPT
HOW TO UNDERSTAND &DRAMATICALLY REDUCE ATTRITION
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In early 2017, industry researcher, Contact Center Pipeline published findings on what was top of mind to contact and call center executives in the year ahead. The feedback, summarized succinctly, was this: RESOLVING PEOPLE ISSUES1. These call center executives pointed to hiring and retention as their greatest challenges, with motivation and management closely following. Throughout the industry, considerable thought – and investment – is being given to program, policies and prizes to create the stability these leaders’ companies need. According to the 2016 US Contact Center Decision Makers’ Guide from ContactBabel.com2, the average annual turnover rate for a Customer Service Representative was 29%, with voluntary quit rates representing 60% of this turnover. Sector breakdown paints an more dramatic picture around attrition: from a high of 53% for outsourcers who are 3rd Party TeleServices providers, to 21% recorded in the Financial Services sector. But all of this stands in stark contrast to the all in-dustry workforce average (U.S. only) of 17.8%.3
The attrition problem is omnipresent and has been for years. But this is not for lack of solutioning and programmatic change efforts. Unfortunately, after getting beyond the sales pitch and marketing appeal, most solutions fail to deliver, that is, reducing cultures of attrition. We believe solutions miss the mark because they are focusing on the wrong problems. In this article, we discuss: (a) call center and labor issues that work in tandem to create and exacerbate the attrition culture (b) strategies to
drive improvement, and (c) the role pre-hire assessments can play in combating the problem.
1http://www.saddletreeresearch.com/contact-center-pipeline-column/power-to-the-people.html2https://www.linkedin.com/pulse/20140518182546-3995896-why-do-your-call-center-agents-quit/3http://www.compensationforce.com/2017/04/2016-turnover-rates-by-industry.html
Brent Holland Brent Holland, FurstPerson, Inc., [email protected]
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INTRODUCTION Have you ever wondered: “what if attrition didn’t matter?” Being in the contact center indus-try, it might seem strange to think that attrition isn’t a tier one issue for every company – it’s not. It’s likely not even a semi-transparent blip on a first-level manager’s radar in the software, petro-leum or logistics industries. But for call centers, it’s hard to imagine anything else that siphons margins as efficiently and unnecessarily as attrition. QATC, an organization committed to knowledge and research sharing among call center professionals quantifies the financial bleed created by attrition.4
• A Deloitte survey showed that it takes about $12,000 to replace the average
non-professional or frontline person. It takes close to three times that to replace a management level employee
• An Insightlink Communications study showed that turnover costs were in the 25–30% range of a full salary and benefits package.
ATTRITION [UH-TRISH-UN]: A REDUCTION OR DECREASE IN NUMBERS, SIZE, OR STRENGTH.
4http://www.qatc.org/winter-2015-connection/exploring-call-center-turnover-numbers/
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With attrition rates commonly in the stratosphere, margin strain is significant. The finan-cial calculation doesn’t begin to capture the instability and issues with continuity and service delivery created by the constant inflow of new hires. All this leads to poorer customer expe-riences, high recruiting, training, and operating costs, lower quality, and a disengaged work-force. The result for many centers is that they are at the center of a vicious, self-perpetuating cycle of turnover, expense and culture erosion. In this article, we will explore some of the underlying issues that lead to attrition and discuss the role that properly validated assessments can play in helping transform the culture of attrition.
IS ATTRITION MERELY A SYMPTOM? We believe that to make a lasting impact on attrition it is essential to think about it as a symptom of other problems. Attrition is almost always a byproduct, it’s unlikely that attri-tion itself is at the problem’s root. Let’s start by reviewing center and labor pool factors.
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We consistently see six contact center issues and three labor pool issues that contribute to the culture of attrition. Although this article’s primary focus is on attrition, remember that many of the topics that we discuss also influence non-attrition behavior (e.g., absenteeism, tardiness, and poor performance).
CONTACT CENTER ISSUESSix business specific issues contribute to attrition. These are: hiring competition, equity, recruitment, environment, job design, and leadership. Contact centers often compete for talent against hospitality, fast food, retail, and rival centers. The relative standing of many centers in the labor market typically means that they must compete for the best talent against companies who offer comparable pay, flexible scheduling, and usually an un-complex, task oriented and easier job. To put this situ-ation into perspective, according to PayScale5, the median hourly rate for a call center representative is $13.43 per hour. Nationally, the range is $10.01 to $17.65. Industry norms simply don’t allow an up-leveling of compensation to attract new hires. While ideal to more easily attract longer term, career minded candidates, it simply isn’t economical-ly viable to substantially alter pay for the majority of center roles. It’s natural for people to compare the relative value of different jobs. Before accepting a job, candidates weigh the expected difficulty of the job and its environment against the income and flexibility they expect to receive. Once in the job, people who believe that the work and its outcomes are balanced are more likely to express satisfaction. In contact or call centers there is often a disconnect between what people expect to encounter on the job and the reality of contact center life. The consequence is that they begin to be-lieve that the work–outcome tradeoff unfairly favors the company. Variations of this
6 SPECIFIC ISSUES:
HIRING COMPETITION
EQUITY
RECRUITMENT
ENVIRONMENT
JOB DESIGN
LEADERSHIP
5https://www.payscale.com/research/US/Job=Call_Center_Representative/Hourly_Rate
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sentiment can be heard in hallway and lunchroom conversations: “they don’t pay me enough to deal with this!”, or “now, that Jane left, I’m expected to do twice as much!”. The concerns reflect agents’ growing convictions, valid or not, that contact center jobs are professional roles with high standards, but with pay scales that are more in line with en-try-level work. These feelings of inequity lead to dissatisfaction, negativity, resentment, and attrition. Perceived inequity and injustice is rarely something that just works itself out. Developing a sense of balance here is critical to enable healthier thinking – and it need not simply be about paying more. Evaluation of workplace equity can be tuned in many ways. Workers derive feelings of satisfaction if they sense that they are uniquely valued as a person and contributor. Believing that one’s ideas and feedback are being considered reinforces a sense of ownership and contribution. Clearly shaped paths of progression and promotion buoy spirits and introduce a sense of tangible payoff to the particularly hard shifts and calls. While some of this responsibility to maintain corporate equity falls on HR, this is not only a programmatic lever. It’s about P&L owners, executive leaders and, yes, the C-suite, casting a vision for cultural transformation across people, policies and areas of investment.
THEY DON’T PAY ME ENOUGHTO DEAL WITH THIS!“
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Attrition places a burden on the entire organization, but no group feels more pressure than the recruitment team. The never-ending need to fill training classes creates pressure to hire as many applicants as possible. Naturally, recruitment teams will trade agent quality or sacrifice time to assess cultural fit because of compensation mechanisms or quotas that functionally reward hiring volume. The rarely mentioned outcome of these ‘butts-in-seats’ strategies, which we refer to as the ‘talent acquisition paradox’, is that many of these new hires stand little chance of performing well or staying with the company. It seems that, in an effort to fix an immediate need, many companies are unwittingly implementing ap-proaches that almost guarantee that their attrition rates will remain high. As TalentCulture puts it6, “…culture is the engine of accomplishment.” But swapping a sick or lacking cul-ture for a healthy one requires architecting. Companies need to build a vision of what the future-state should look like, establish values that will nurture that culture, and then define behaviors that are representative of those values. KPIs and metrics need to be built to enable this. When done, recruitment and HR teams evaluate centrally around values fit. Yes, these efforts will shrink the available recruitment pool. But they will also create a much clearer, targetable profile to aggressively recruit towards. This allows rapid initial assessment as recruit-ers aren’t spending time with the wrong type of candidates and brings the right people onboard to grow a healthier work environment.
Working in a call center is difficult. Most centers have successfully implemented perfor-mance-driven cultures in which representatives are held accountable for reaching challeng-ing performance milestones. In an effort to minimize redundancy and control costs, cen-ters often schedule as few agents as possible to cover anticipated call volume across
CULTURE IS THE ENGINE OF ACCOMPLISHMENT
6https://talentculture.com/how-to-cure-a-sick-company-culture/
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a variety of shifts, some of which are more desirable than others. This is why centers ap-ply strict adherence and attendance policies to ensure adequate coverage. These policies sometimes seem rigid and punitive to the representative who may not understand or consider the realities of the business. While these policies may be in place simply for coverage and cohesion sake, they are interpreted as means of control. All workers, regard-less of industry, need to feel the dignity that comes with believing they are ultimately in control of their life, schedule and availability. While companies should not stand for disrup-tion, organizing shift swaps and planning is critical. Workers are dignified in the trust trans-fer that happens when corporate policies allow greater independence and self-direction. Environmental freedom and flexibility are cornerstones in this.
Individuals who succeed in call center agent jobs are truly special. The way the jobs are designed adds a layer of complexity that is rarely discussed. Consider the descriptions that we often hear from our customers on what it takes to be successful as an agent: “WE’RE LOOKING FOR SOMEONE WHO IS RIGID WHEN IT COMES TO FOLLOWING RULES, BUT ADAPTABLE TO CHANGE.” “THIS JOB REQUIRES THE AGENT TO PAY CLOSE ATTENTION TO DETAILS AND ALSO BE AN OUTSIDE-OF-THE-BOX THINKER.”
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If you asked a psychologist to describe a person who fits either of these descriptions, you might hear something akin to a multiple personality. These asks are difficult to deliver in any circumstance and this governing mindset is often incompatible with the available talent pool. Managers and HR staff need to thoroughly define the workplace dynamic and role requirements. Instead of broad requests, like “detail oriented” and “outside-of-the-box” thinking – leaders need to isolate the specific, attributable skills they need. They can then shape shifts, organize teams, carve up task lists or otherwise develop trainings to ad-dress job needs without necessarily expecting one agent to deliver on all fronts. However, virtually all agent jobs have some level of diversity and require people capable of adapting to situations fluidly. Screening too broadly for ambiguous or subjective traits like creativity, or too narrowly and overlooking the need for skill and social flexibility both miss the mark.
Research suggests that between 50% and 75% of managers are incompetent. In contact centers, poor first-line leadership magnifies the challenges that agents face. When combined with a difficult job, the lack of support causes agents to give up. Commonly, in an effort to retain talent, contact centers will promote top performing agents. Under-standably, the intent is to create promotion paths and ensure the transfer of the corporate DNA to a new crop of agents. However, as employee engagement software service leader Tenacity reports7: “Excellent agents don’t necessarily make excellent supervisors; they are often better at escalations and developing deep subject matter expertise. Senior executives need to find supervisors from within and outside their ranks who can deliver an excellent employee experience.”
7http://gotenacity.com/downloads/tenacity-reducing-attrition-in-call-centers-white-paper.pdf
BETWEEN 50% & 75% OF MANAGERS ARE
INCOMPETENT
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Engagement, meaningfulness, social participation and connectivity are the softer aspects that contribute to the agent experience, and thus, likliness of retention. These are not nec-essarily skills possessed by agents thrust into management roles. Supervisors play a critical role in agent quality of life and need to be promoted, trained and hired accordingly.
LABOR POOL ISSUESAn equally important group of issues that contribute to the culture of attrition is attitudes within the labor pool. Individual workers make up the labor pools that contact center businesses navigate during the hiring process. There are countless issues at play in the labor pool, but there are three that commonly emerge in our research; transient attitudes, fear of failure, and a sense of entitlement. A problem plaguing many centers is the transient attitude among many workers. In many cases, agents accept work as a stop-gap until they find a better paying job and then they move on. With the rise of the “gig-economy” call center agents are increasingly supplement-ing their roles with on-demand jobs. In general, the US freelance economy is sprawling. It is estimated that 34% of the workforce “gigs” in some capacity, with 43% expected to be participating by 20208. The sense of freedom, on-demand nature and flexibility afforded within this type of role creates a potential, competing alternative to call center employ-ment. At a minimum, the increasing on-demand options influence consideration of long term necessity, viability and worthwhileness of call center work.
We also see examples of people who will take ad-vantage of 8 – 12 weeks of paid training, but have no intention of moving into production. Although there is a tendency to attribute these attitudes to genera-tional factors, a more likely cause is that people who hold these attitudes lack a sense of responsibility and respect.
3 COMMON ISSUES:
TRANSIENT ATTITUDES
FEAR OF FAILURE
SENSE OF ENTITLEMENT
8http://money.cnn.com/2017/05/24/news/economy/gig-economy-intuit/index.html
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Many people in the labor pool seem to think that contact center jobs are easy and task based: nothing more than answering phones, reading from a script, and forwarding dif-ficult customers to managers. No matter how much advance warning the person has received, the nature of the job and its complexity rarely get fully grasped until the person moves into production. It’s at that point when many new employees become simply overwhelmed by the size of the job. For the first time in their lives, these people struggle to learn their job and are required to draw on situational, social and technological compe-tencies in real time. It doesn’t take long before doubts emerge and they wonder if they will ever get it. Some people cannot cope with failure, so they would rather leave on their own terms than be told they are not a good fit.
Many people today have a sense of entitlement that influences their world view and deci-sions; this point applies outside the contact center space as well. These workers approach their work as if they are doing the company a favor by showing up and doing a good job. They naturally assume then that the company should provide special privileges. Researchers will hear feedback like this: “Management doesn’t understand how to take
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care of their people. They don’t pay us a bonus for perfect attendance.” Rather than seeing a job as a trade – labor for pay – people believe that it’s the company’s responsibility to accommodate them. Comfort with the transactional nature of employment is declining. People want, and expect, more from their role. Salary by itself is no longer an acceptable outcome. From attendance to wages, these attitudes are often at the heart of many per-sonnel issues. Of course, when the employee doesn’t perceive the resolution as fair, it leads to the same attitudes of dissatisfaction and resentment that we discussed above. Right or wrong, companies will need to consider novel ways to prioritize quality of life, deliver a sense of equitability and satisfy some of the non-monetary needs that workers increasingly expect their employers to fulfill.
The nature of the contact center industry is inter-laced with challenges. The business (competition, equity, recruitment, environment, job design, and leadership) and labor pool factors (transient attitudes, fear of failure, and a sense of entitle-ment, or wanting more) form a perfect storm that has created a culture of attrition. Although the issues we’ve discussed are not the only things that are important, they consistently rank near the top in our research. Overall, our work suggests that, like any effective relationship, it is critical to understand the tension between the needs of all involved parties. One proven way to slow the cycle of attrition is to improve the “fit” between a new employee and center. This can be addressed through well-validated assessments to ensure that upstream, the right inputs (people) are being pursued to deliver healthy outputs (performance and culture).
IMPROVE THE “FIT”BETWEEN A NEW EMPLOYEE AND THE CENTER
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Using well-validated assessments is an excellent way to balance both the needs of the business and those of the employee. In our experience at FurstPerson, addressing these demands requires time to understand the business and the agent jobs and conduct re-search to determine what distinguishes the successful from the fringe and unsuccessful agents. We then use those lessons to prepare recommendations that identify applicants with the best chance of being satisfied, high-performing employees who will remain with the company. The process is intensive but follows best practices and leads to the right solution for the hiring organization. It’s important to understand how assessments add value to the business. Although it would be nice to implement today and realize a 20% reduction in attrition overnight, the reali-ty is that it takes time to see the improvements. In fact, for most customers, the best approach is to implement recommendations that will deliver small gains in retention and performance initially while still enabling them to meet recruiting targets. As these small gains are realized over the coming weeks and months, we can gradually raise the bar on the assessments’ recommendations. As shown in Figure 1, with each step, the recommen-dations become more stringent (i.e., pass rate decreases) and accurate (i.e., performance and retention improve).
Figure 1: Assessment Calibration
TIME
APPLICANTPASS RATE
LOW
GAIN
HIGH
RETENTION & PERFORMANCE
MINIMUM PASSINGSCORES INCREASE
DRIVING IMPROVEMENT
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Building on the discussion, there is a direct relationship between attrition and the assessment pass rate needed to meet recruitment goals. Table 1 shows an example from a 500 FTE center. With 48% attrition and 30 bona fide applicants per month, the center would need two-thirds of applicants to pass just to maintain head count. However, by decreasing attrition by 10 percentage points (to 38%), the center would only need about half of the applicants to pass to meet recruiting goals. When using well-validated assess-ments, their impact on performance and attrition typically improves as passing scores become more stringent (i.e., there will be fewer hiring mistakes). By focusing on small gains that match recruiting capabilities with overall changes in the applicant pass rate, organizations can gradually bring down attrition and maintain hiring capabilities that meet production goals.
Table 1: Relationship Between Attrition & Selectivity of Hiring Process
SAMPLE CALL CENTER
ATTRITIONPERCENTAGE
48%attrition
43%attrition
38%attrition
33%attrition
28%attrition
23%attrition
ASSESSMENT PASS RATE 67% 60% 53% 47% 40% 33%
Assumptions: 500 FTEs; 48% Annual Attrition; 30 bona fide applicants per month
THERE IS A DIRECT RELATIONSHIP BETWEEN ATTRITION AND THE ASSESSMENT PASS RATE
NEEDED TO MEET RECRUITMENT GOALS
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THE RELATIONSHIP BETWEEN ASSESSMENTS AND ATTRITION Research suggests that some assessments may predict attrition most effectively during early phases of an employee’s lifecycle. In our experience, FurstPerson’s assessments have predicted attrition with exceptionally accuracy. As we focus on the employee life-cycle and when attrition occurs during this lifecycle, we have focused research on early-life attrition. A study involving our rich multimedia simulation called CC Audition®, provides an example of this research.
The overwhelming majority of research comparing assessments and attrition describe re-sults in terms of 30, 60, and 90 days. Some companies provide results for 180 days or more. This information can be important and informative, but it doesn’t always tell the whole story. It is crucial to understand how and, even more importantly, when an assessment pre-dicts attrition if we want to create client-specific solutions that will deliver lasting value.
FURSTPERSON’S ASSESSMENTS HAVE PREDICTED ATTRITION WITH
EXCEPTIONAL ACCURACY
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We examined relations between scores within one of our CC Audition® simulation modules and agent attrition from more than 4,000 people. We began by studying the relations at 1, 3, 6, and 12 months. While reviewing the results, we noticed that the simulation’s sensitivity to attrition went down over time; this was an interesting nugget that, due to smaller sam-ples and shorter time frames, we had not seen before. More detailed analyses revealed that the audition tool predicts attrition well throughout the first 25 weeks of employ-ment, but then its sensitivity to attrition goes down considerably (see Figure 2). This research suggests that factors outside of the competencies that CC Audition® measures begin to have a greater influence on agent’s likelihood to stay with or leave the company after six months. It seems reasonable to believe that, if an agent lasts for six months, that he or she has many of the skills and per-sonal qualities it takes to be successful. However, the agent’s relationship with the supervisor, opportunities for ad-vancement, pay, etc. take on an outsized level of consideration when evaluating whether to stay or leave. This study has important implications for companies looking to improve retention. The results suggest that just because an assessment predicts attrition well doesn’t mean that it predicts attrition equally well throughout an employee’s lifecycle. The tool is a remarkably effective when deployed to assess immediate fit, and capacity to be successful and maintain that success. Once the inflection point of, or around, six months arrives oth-er cultural elements that keep the company “sticky” must be in place. More than ever, it is essential to build multi-faceted solutions that take into consideration the entire employee lifecycle in the holistic battle against attrition. For organizations seeking to improve reten-tion, the implication is to not only focus on where assessments can predict attrition but also to address other influences on the agent’s stay or go decision that may have taken a back-seat in the past.
WEEKS
5 10 15 20 25 30 35 40 45 50
STRONG
WEAK
CC Audition’s®
Relation to Attrition
Figure 2: CC Audition’s® Relationto Attrition by Weeks
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CONCLUSION Attrition is a pervasive problem within the contact center industry. Left unchecked, profits and culture erode with intensifying speed and cyclisation. Six core business and three labor pool issues contribute primarily to the culture of attrition. Research examining over 4,000 hires in a twelve-month period show that assessments add value to retention programs by helping companies ensure applicants have the abilities and personal characteristics to fit well with the job and center. Historically, assessment solutions have adopted a one-size-fits-all approach and have become the primary, or de facto pro-posed solutions to stem attrition. Our new research suggests that assessments have critical strength at key points in the employee lifecycle, but at more distant points in the life cycle other factors driving turnover dominate. Crafting a comprehensive hiring solution using assessments in tandem with other retention strategies provides a best practices model. When selection systems are built using well-validated assessments with proper supporting data, companies can correctly match people to the right jobs, which allows them to invest more in recruitment and retention programs. Pairing this with effective monitoring, cali-bration and feedback mechanisms can then drive systematic improvements and attrition performance gains.
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