The True Cost of Attrition

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Call Center Attrition has long been recognized as a leading worry of call center management. But, even with the focus on attrition, many managers do not understand the true cost of attrition.

Attrition, simply defined as the total number of agents leaving the call center during a 12-month period, divided by the number of seats during the same 12 months, is a key metric in monitoring the health of your call center.

Industry data shows large call centers average 49% annual attrition, but more strikingly, call centers focused on outbound dialing average more than 60% annual attrition.With self-reported attrition rates over 60% in some cases, calculating what this actually means to your company’s bottom line is critical.

Hard Costs vs. Soft Costs

The best way to examine the costs associated with attrition is to break out the Hard and Soft Costs.

Hard Costs include:

  • Training replacement agents – calculated by multiplying the Agent’s hourly rate by the number of hours to train.
  • Trainer cost – calculated as salary or rate of pay times the number of hours to train plus the number of hours of preparation time.
  • Recruiting costs – The costs associated with recruiting new agents.  This includes the cost of advertising.  Also included are the costs associated with screening (third party screening tools, etc.).
  • Interview time – calculated as the hourly wage of the interviewer multiplied by the number of hours interviewing candidates.

Soft Costs include:

  • Opportunity Cost – calculated by multiplying the bill rate by the number of lost productivity hours due to empty seats from attrition.
  • Engagement – forces management to ask the remaining agents to do more with less! This leads to decreased moral, effort, and performance and increases in absenteeism and turnover. A spiraling cycle!
  • Performance – losing a veteran agent and replacing with a rookie agent can have a significant impact on performance.  An agent fresh out of training is simply not going to be as proficient as a veteran without actual real world experience manning the phones.
  • Service levels (such as wait time) suffer, as does customer service.

Why Does Attrition Matter?

The real incentive for improving attrition is the increase in performance combined with the decrease in associated costs. More tenured agents will perform better, be lower risk, produce better customer service, and lead to better customer loyalty.

While the hard costs associated with attrition are readily apparent, the soft costs can have the most meaningful impact on your call center. The first step in improving your company’s cost of attrition is simply understanding the true nature all of the associated costs.

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