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The Impact of Training on Turnover

by Rosanne D’Ausilio, Ph.D., President Human Technologies Global, Inc.

Agent turnover has always been, and continues to be, a chronically costly problem for call centers, a problem to be tolerated rather than solved.

Average turnover in the contact center is reported at 40 to 50%. Respondents to a *FurstPerson survey reported an average monthly attrition rate of 7.18%. Annualized, a 40% annual turnover estimate becomes an actual turnover rate of 87%.  

Although 90% of corporate executives say that employees are the most important variable in their companies’ success, a Towers Perrin survey reported that in practice they rank people-related issues far below other business priorities.  Executives agreed improving employee performance would improve business results--73% even said their most important investment was people.  However, people-related issues, such as training and compensation, consistently ranked at the bottom of the list.

A profitable workforce requires well-trained, knowledgeable, conscientious, service-competent employees who enjoy their service responsibilities. Training is crucial.  Recent studies in service industries link increased training to decreased employee turnover. 

For instance, Ryder Truck Rental discovered that among employees who participated in training programs, the turnover rate was 19%.  For employees who did not participate, the rate soared to 41%.  Guest Quarters Suite Hotels report their low turnover rate is one indication of employee satisfaction.  Additionally, but not surprising, there is a positive correlation between training, employee satisfaction, and guest satisfaction.

At a time when nearly all businesses, are looking for ways to cut costs and save money, reducing turnover should be a priority. Disruption of workforce stability should also be of concern to those who manage the customer care process.

FurstPerson reports the average cost of attrition at $5,466 per person. Interestingly, the cost of attrition in an internally managed contact center was reported at $7,994 per person, more than twice the cost of attrition at an outsourced center which was reported as $3,420 per person.

The disparity in cost is most likely related to the amount of time and money that is dedicated to training individuals in an internally managed contact center.  And we’ve seen turnover in other reports at $8500 per person +++

Let’s look at a typical scenario with 100 people and a 30% turnover rate.
100    people
x30% turnover

30    people are leaving annually
$7500 average (conservative) cost of new hire

$225,500+ + + = Turnover cost

Note:  The pluses represent the additional cost of the learning curve.  For instance, when seniors, supervisors, and/or managers need to sit with or give time to new hires takes them away from their requisite productivity. 

Also, factor in consideration of the people having to take on the additional workload because of short staffing, or new hires too 'green,' and the subsequent declining morale that goes along with that.  All of these impact productivity, customer (internal and external) satisfaction, and employee satisfaction.

Can you see the easy justification for investing in a training initiative of say $60,000 that could reduce turnover for almost a 4:1 return on your investment?  Sounds like a slam dunk to me.

* “Call Center Recruiting and Compensation Survey” published in February 2009 by FurstPerson of Chicago, IL.

About the Author
Rosanne D'Ausilio, Ph.D., industrial psychologist, President of Human Technologies Global, Inc., specializes in human performance management for contact centers, providing needs analyses, instructional design, and customized, live, world class customer service skills trainings.

Known as 'the practical champion of the human, she authors the best-sellers, Wake Up Your Call Center: Humanize Your Interaction Hub, 4th edition, Customer Service and The Human Experience and Lay Your Cards on the Table: 52 Ways to Stack You Personal Deck, and hot off the press How to Kick Your Customer Service Up A Notch: 101 Insider Tips as well as her popular ‘tips’ newsletter on How To Kick Your Customer Service Up A Notch! available at http://www.HumanTechTips.com. Reach her at Rosanne@human-technologies.com.