Many call centers struggle against high agent turnover, a problem that strains recruiters and threatens customer relationships. If you are one of those call centers (and if you’re wondering, you are if your turnover is higher than 35%) then you’ve probably considered some time-tested solutions: online assessments, job previews, enhanced training programs. But have you taken a look at your staffing mix? The proportion of agents to supervisors in your call center – or your Span of Control – has a direct impact on agent turnover rates, with the ability to reduce agent turnover by up to 58%.
Let’s take a step back to understand what turnover looks like in 2011, why it’s an urgent problem for our industry, and how that unlikely metric – Span of Control – can help. In CallMe!’s recent State of Call Center Human Capital survey – spanning nearly 120 companies and representing well over 100,000 agents – we found that the average turnover rate in US call centers is 43% (median = 35%). However, this rate varies significantly by different segments…most notably call center size. Turnover rates tend to increase in line with the number of agents in a center. For example, call centers with more than 1,000 agents average 70% turnover annually.
So why is this important? As we’ve discussed previously, agent turnover carries with it real financial costs to our businesses (see CallMe!’s whitepaper on The True Cost of Attrition). Often hidden as line items in COGS and SG&A, turnover means: increased exit costs, higher recruiting costs, more training expense, and lost productivity on the floor (replacing a fully productive agent with one ramping up). This adds up to a substantial amount of per agent cost. Our recent survey indicated that the average turnover cost was $3,500 per agent. For larger call centers (>1,000 agents), that number climbs to $4,000 per agent. To put that in context, a 1,000-seat call center running an industry average 70% annual turnover is wasting about $2.8 million per year on turnover costs.
While there are many different ways to reduce turnover, few call centers consider how the ratio of agents to supervisors – or Span of Control – can make an impact. Call centers with an average of 10 agents per supervisor have 58% lower turnover than those with 30 or more.
Stepping back from the statistics, this just makes sense in practice. Lower Span of Control means more individual attention for each agent…more performance feedback, more coaching, a greater sense of belonging in the workplace. All of this would intuitively lead us to believe there would be lower turnover, even without the data. A supervisor with a smaller team is much better able to create this kind of engaging environment for their team – one with a clear sense of purpose, where individual performance is recognized and managed – than a supervisor with a larger number of direct reports.
But you might be wondering about cost. Doesn’t reducing Span of Control mean hiring more supervisors? And doesn’t that just mean more headcount expense? Not necessarily.
Optimizing Span of Control can reduce turnover while lowering total costs in your call center. While lowering Span of Control does entail hiring more supervisors, that expense can be offset (or even surpassed!) by the savings that result from decreased turnover. Let’s consider the example below:
Even small changes to Span of Control can make a big difference. Here we have a 1,000-seat call center running 70% turnover with a Span of Control of 20, meaning that on average there are 20 agents reporting to each supervisor in the center. Reducing the Span of Control by just 2 – from 20 to 18 agents per supervisor – decreases turnover by 10%. The additional cost of hiring 6 more supervisors is more than offset by the savings realized from lower turnover. In fact, the call center created more than $85,000 in additional value by changing its Span of Control!
The science lies in optimizing your Span of Control to find the right balance between turnover cost reduction and headcount expense. As a first step, try calculating your Span of Control by dividing the total number of agents by the number of supervisors in your call center. Where are you on the scale? Do you have room for improvement??
If you’re interested in reducing your call center’s turnover through optimized Span of Control, CallMe! can help. CallMe! improves call center performance through targeted talent analysis and solutions. Learn more about how CallMe! helps call centers lower their agent turnover here, or contact us at firstname.lastname@example.org to discuss how your business can improve the returns on its human capital investments.
You should follow us on twitter here.