High turnover rates in contact centers present a significant challenge for businesses, impacting their operational efficiency due to unfilled positions, increased costs, and low team morale. And all these factors collectively contribute to subpar customer experiences.
According to ContactBabel’s US Contact Center Decision-Makers’ Guide 2021, over a quarter of contact centers face attrition rates of more than 30%. As a result, many contact centers and BPOs have accepted this as a normal industry practice,
Another research by the SQM Group revealed that 47% of managers identify high agent turnover and absenteeism as their most significant challenge in operating a call center effectively and efficiently. However, some industry leaders have proven that high turnover isn’t inevitable and in fact, it could be mitigated. But first, let’s dig deeper into what truly causes attrition in call centers.
Attrition Rate: Meaning in Call Centers
Attrition in BPO and call centers refers to the natural drop in an organization’s staff over time caused by retirement, relocation, resignation, or even changing career paths. The reasons for their departure are not the fault of the company. This is sometimes referred to as voluntary attrition to distinguish it from involuntary attrition. The latter can occur when a corporation creates attrition by removing jobs or laying off employees to cut costs. Whether voluntarily or involuntarily, employees who leave the company are not replaced.
Not only that, but attrition rates in BPOs and call centers can have an impact on productivity and service quality. For example, when high-performing employees leave the organization, attrition is positive, which can frequently lead to:
- Increased recruiting
- High training expenses.
- And the loss of experienced staff.
- Increased pressure on BPO team leaders
Moreover, high attrition rates might result in inconsistent customer service as workers leave and new ones are trained. As a result, the brand experience is inconsistent across departments, with customers obtaining inaccurate or out-of-date information on many occasions. Furthermore, excessive turnover costs the company money in hiring, training, and lost productivity.
According to Deloitte’s 2018 analysis, lowering agent turnover by 1% can save an organization $32.9 million per year for a company with 30,000 people and a 13% average attrition rate. As a result, tackling the agent turnover issue is critical to realizing significant cost reductions.
The formula for Attrition Rate
Now, let’s understand how to calculate it. The attrition rate formula in BPO and call centers is calculated as a percentage. The formula goes as follows:
(No. of employees who departed during a certain period/Average no. employee in a certain period) * 100
For example, a company with 100 employees and an average of 9 exits each year has an attrition rate of:
(9/100) *100 = 9%
This figure indicates that 9% of a corporation’s total staff departed the organization on average that year. It is important to note that this figure does not reflect the cause of attrition.
Average Call Center Attrition Rate
Historically, call center turnover rates have been high due to the repetitious and tedious nature of the work, the problem of handling an excessive number of calls, and poor employee engagement.
However, in recent years, a Quality Assurance & Training Connection (QATC) survey found that the typical call center agent turnover rate ranged from 30% to 45%. The call center sector is in crisis due to high attrition rates, and this KPI is widely regarded as the most important factor in determining corporate performance.
In fact, the COVID-19 epidemic actually decreased attrition rates in 2020 since fewer businesses hired new employees.
But how do you achieve this ideal attrition rate?
What Causes Agent Attrition?
Today’s job market is extremely competitive. The last thing calls center managers want to do is rehire their top performers and start over. However, the problem of call center attrition continues. Understanding why employees depart might help reduce turnover, and knowing why it’s an issue can help you alter the course of events. So, here are some reasons for the call center attrition rate:
When you recruit new employees, you may be tempted to speed them through training so that they may start working right immediately. However, this is a solution to the situation. You are about to send someone to work in the service department. It’s a tremendously difficult job that requires dealing with dissatisfied consumers while also working with new technologies and solutions. Having a “sink or swim” attitude in this situation may drive many new employees to leave since they are unable to cope with the stress.
Lack of Collaboration
Creating a healthy work atmosphere is critical to lowering contact center attrition. By actively encouraging collaboration through tactics like feedback sessions, involving everyone in critical corporate meetings, and encouraging team engagement, agents become valuable contributors to the greater organizational context.
Employees nowadays, whether in the office or working from home, expect a certain level of autonomy and faith that their responsibilities will be completed correctly. They don’t want to be micromanaged, disempowered, or neglected at work. As a manager, you should be able to communicate effectively, with the proper level of transparency, provide frequent feedback, and avoid becoming distracted by flashing your light.
In a hostile workplace, relationships at all levels suffer, not just productivity. It hurts coworker relationships and may even disrupt client interactions, resulting in brand damage and maybe a loss of business. A toxic workplace environment can also hurt personal relationships. It’s simple to see why this is a certain way to lose your best talent.
According to an industry poll of HR leaders, burnout accounts for 50% or more of large firms’ yearly departure rates. Burnout occurs when your agents have depleted their physical and emotional resources. When employees hit this tipping point, their performance suffers, and they grow increasingly demotivated until they quit (voluntarily or involuntarily).
Resumes and previous experiences do not always indicate that a candidate is a good fit. Unfortunately, recruiting the incorrect candidates increases attrition rates. To avoid this, talent acquisition teams must properly screen candidates to evaluate whether they will fit into your company’s culture and work environment.
Customers have an important impact on the agent’s work experience. When customers express rage and dissatisfaction, agents take the brunt of it. Handling complex calls and managing increased call volumes almost always results in contacts with unsatisfied consumers—and unhappy customers equal unhappy agents.
Call Center Attrition Benchmarks
The unemployment rate in the United States fell 1.8% points to 3.7% in 2022, from 5.5% in 2021. The 2021 unemployment rate was 2.6 percentage points lower than the 2020 rate of 8.1%, which had risen by 4.4 percentage points during 2019.
It’s no wonder that call center turnover is high, given the low unemployment rate, agent job discontent, and the WFH model, which allows agents to easily switch jobs. The average call center agent turnover rate was 35% in 2021 and 38% in 2022, the highest we’ve ever observed.
Furthermore, 2022 agent turnover is 58% higher than in 2020, when the majority of agents switched to the WFH model. Based on call center turnover during the last two years, the industry standard is 30 to 40%.
Call center turnover has risen during the last five years. Before 2018, call center turnover was below 25% and quite constant. Furthermore, it was usual for call centers at the time to set a call center turnover goal of 20%, which many of them met. In a pandemic, a decent call center turnover target is 30% or lower.
Agent turnover is projected to continue to be high in 2023. There are various reasons why agents are dissatisfied, disengaged, or leave their jobs. First and foremost, most call center managers understand that low agent work satisfaction and engagement can lead to agents putting in less effort. In addition, agents may become psychologically disengaged from their positions (known as quiet quitting) or leave to work elsewhere.
Also, a recent poll of call center practitioners revealed that 76% agree that agents are burnt out working in call centers, which is significantly higher in 2022 than in previous years. As a result, it is not surprising that agent turnover in the call center sector is at an all-time high.
Attrition Call Center Metrics
Here are some key attrition-related metrics and strategies for measuring and improving call center performance:
- Attrition Rate: This is the primary metric that measures the percentage of employees leaving the call center within a specific timeframe.
- Voluntary vs. Involuntary Attrition: Distinguishing between voluntary (employees leaving by choice) and involuntary (termination or layoffs) attrition can provide insights into the nature of departures.
- Tenure Distribution: Understanding the distribution of employee tenure can help identify trends and patterns in attrition.
- Absenteeism Rate: Frequent absences may be an early indicator of potential attrition. Tracking absenteeism rates can help in proactively managing workforce issues.
- Average Handle Time (AHT): Long Average Handle Time (AHT) may contribute to agent dissatisfaction and attrition. Monitoring AHT alongside attrition rates can reveal potential correlations.
There are several other factors that you can observe for a high attrition rate:
- Overworked agents
- Unfairness among team members
- Treatment of employees
- Promotional or raise opportunities
- Company culture
- Prospects for professional growth.
- Appreciation for hard effort
- Work-life balance.
- Role expectations
- Hiring methods
High turnover is pretty normal in the call center industry, however, there are techniques to minimize some of the reasons why an employee leaves a job. But before we get into that, let’s first understand if attrition is good or not.
Is Attrition Good for a Company?
Employee attrition is either positive or negative, depending on the situation. Are employees departing because you have implemented a new technology that automates their tasks? That’s good for business. Are employees departing because they are not paid on time and the working conditions are poor? That’s awful for business.
Bad staff churn is incredibly bad for business. Your organization loses talent and must devote time and resources to acquiring fresh talent. Assume your company’s sales department has substantial attrition due to bad working conditions. That suggests you are actively losing talent, and your organization is suffering as a result.
On the other hand, high employee attrition occurs when you lose employees who are no longer needed. Perhaps you have invested in new technology. Perhaps your corporation is outsourcing a business function. And maybe your organization simply needs a smaller crew. Employee attrition is beneficial in these situations since it reduces labor costs.
How to Minimize Attrition Rate?
Businesses can use digital solutions to increase agent efficiency while decreasing consumer effort. Chatbots, AI-powered virtual assistants, and automated sentiment analysis are a few examples of solutions that can improve customer relationship management and lighten the workload for agents. This keeps agents motivated while giving customers a consistent experience. Furthermore, firms should develop an effective compensation system to recognize top performers and customer service excellence.
A few more ways through which you can minimize the attrition rate in your call center are:
Regular monitoring can be an effective method for retaining employees and managing their performance. Simply saying, “You matter,” shows your employees that you value their opinions, ideas, input, and work. When employees feel appreciated, they tend to stay longer and work harder.
Furthermore, real-time feedback allows you to spot minor issues before they escalate into large errors or misconceptions, allowing employees to change their activities. It also allows you to engage in conversation with people who would otherwise be hesitant to seek help.
Monitor Customer Satisfaction
The most effective contact center agents are often those who establish a personal connection with their callers and like their employment the most. It is critical to monitor and improve customer-centric metrics such as customer happiness and first contact resolution while avoiding overvaluing quantitative data such as average handling time or calls per hour. This will considerably minimize tension in the contact center and extend the agent’s stay with your organization.
Hire the Right Talent
During an interview, ensure that potential employees have the necessary skills and experience. Determine if the potential employee can meet the job’s demands by asking detailed questions about their abilities and previous work experience. Candidates should be given a realistic job description and the chance to speak with potential coworkers during the interview.
Interviewees should be informed if there are no opportunities for advancement in their selected employment. Being transparent and honest about the company’s plans can help reduce the number of new employees who leave because they are dissatisfied with their lack of development opportunities.
According to research, 81% of agents choose to work from home (WFH) rather than in a contact center setting. One of the primary reasons that agents choose the WFH model is the work-life balance it delivers. The WFH model also offers agents more freedom, which they value.
Furthermore, according to the report, work schedules are the most common cause of agent job discontent. Furthermore, 67% of agents believe their firm should enhance their work schedule. Furthermore, agents want the opportunity to work around their other daily objectives and preserve the time gained from the daily trip to improve their quality of life.
Many agents require more than WFH to achieve a work-life balance, particularly if they are working mothers or have health or family challenges. As a result, agents prefer the option to self-select or partially control their work schedules.
Furthermore, agents want the opportunity to exchange schedules with another agent or work split shifts in the evening, weekday, or weekend. If a call center does not provide scheduling flexibility, they risk high turnover.
Teams that deploy innovative contact center software and applications outperform those that do not. Giving your agents easy-to-learn and use software allows them to begin working faster and perform more effectively. This will also boost the agent’s job happiness and the likelihood of their staying with your organization longer.
Several AI-powered solutions further enhance the agent experience.
- AI-Assist: A personalized AI-powered assistant that assists agents during every conversation. It listens, learns, and aids by offering real-time guidance throughout client interactions. With these tools, agents can feel supported and empowered to make more educated decisions, resulting in better customer service and work satisfaction.
- Automatic summary: Another method for increasing agent productivity is to reduce after-call work (ACW). The automated summary feature summarizes interactions automatically. Agents may now focus on customer interactions rather than administrative activities, allowing them to manage more calls and provide better service.
- Knowledge Base Management: This technology uses AI to give agents instant access to the information they need to address client questions. The AI-powered technology sifts through massive volumes of data to discover pertinent information, allowing agents to address issues faster and more accurately.
These solutions not only provide agents with the resources they need to do their jobs efficiently, but they also contribute to a more fulfilling work environment, lowering attrition rates at contact centers.
The call center must clearly describe what is expected of its agents and provide feedback based on those expectations. Agents must also know who to contact when they have a problem or concern. They should also be involved in corporate decisions and informed of any changes to the company’s aims and plans.
Call center agents can bring new and potentially successful ideas to the table, but only if they believe they are being heard. Clear communication between agents and management, as well as involving them in significant business decisions, will help them feel motivated, empowered, and invested in your organization.
Long-Term Career Opportunities
Companies that encourage a culture of continual learning and improvement, as well as offer clear career advancement options, are more likely to keep a motivated and loyal workforce.
According to a report, 55% of customer service agents consider their employment as a career, with only 12% envisioning the end of their tenure, indicating that a significant percentage of agents desire to stay with their organization and progress in their roles. This means that agents can be kept if they are provided with the opportunity for advancement.
Call centers may address talent shortages and prepare the way for agents to transition into management roles by providing them with opportunities to develop knowledge and learn new skills, and a clear career path within the organization. Expanding agents’ skill sets not only reduces turnover but also creates a team of highly productive and invaluable employees.
Managing call center attrition is difficult; however, if you make efforts to empower and encourage your agents and use technology to enhance engagement, you’ll be well-positioned to retain a steady and satisfied workforce. As the customer experience landscape evolves, it is more vital than ever to embrace change and stay ahead of the curve, improving both the customer and staff experience while enhancing call center efficiency and success rates.
Frequently Asked Questions
To reduce attrition rates in a call center, companies can implement several strategies:
Improve Hiring Practices: Ensure that the recruitment process is thorough and targeted towards finding candidates who are a good fit for the role and the company culture. This includes clearly communicating job expectations and providing realistic previews of the job during the hiring process.
Provide Comprehensive Training: Offer robust training programs that equip agents with the necessary skills and knowledge to excel in their roles. Ongoing training and development opportunities can also help agents feel supported and motivated to grow within the company.
Offer Competitive Compensation and Benefits: Review and adjust compensation packages to remain competitive within the industry. Additionally, consider offering perks and benefits that enhance job satisfaction and promote employee well-being.
Create a Positive Work Environment: Foster a supportive and inclusive workplace culture where agents feel valued, respected, and motivated to perform their best. Encourage open communication, provide opportunities for feedback, and recognize and reward achievements.
Provide Opportunities for Advancement: Establish clear career paths and provide opportunities for advancement within the company. This can include promotions, lateral moves, or opportunities for skill development and specialization.
Implement Work-Life Balance Initiatives: Recognize the importance of work-life balance and implement policies and initiatives that support employees in achieving this balance. This can include flexible work schedules, remote work options, and paid time off.
A good attrition rate varies depending on the industry and specific circumstances of the company. Generally, a lower attrition rate is preferable as it indicates greater stability and continuity within the workforce. However, excessively low attrition rates may also indicate stagnation or lack of opportunities for growth and advancement.
While some level of attrition is inevitable and can even be beneficial in certain situations (such as removing underperforming employees or allowing for fresh perspectives), high attrition rates can have negative implications for a company. These may include increased recruitment and training costs, reduced productivity, and decreased employee morale and customer satisfaction.
In the context of business process outsourcing (BPO), key performance indicators (KPIs) are metrics used to measure the performance and effectiveness of various aspects of the operation. These may include metrics related to customer satisfaction, service quality, efficiency, productivity, and cost-effectiveness. . Examples of KPIs in BPO include average handling time (AHT), first call resolution (FCR) rate, customer satisfaction score (CSAT), and agent utilization rate.