Reducing Agent Turnover: Applying Analytics to 100-Year-Old Observations

0
325

Share on LinkedIn

A few years ago, when I was in Nashville, I wandered into a used bookstore and bought called Foremanship1 written in 1927 by Glenn L. Gardiner, the “former director of foremanship development at the Oakland Motor Car Company.” Part of General Motors since 1909, it later became known as Pontiac. Among the invaluable insights from this 100-year-old book is a 14-page section called “Reducing Labor Turnover.”

The author urges root cause analysis to “localize the turnover problem” and equates it with waste, a well-understood term in the automobile industry. He then lays out the costs associated with turnover before emphasizing the need to consider the factors influencing the size of turnover, the causes of turnover, and specific recommendations on how to reduce turnover including the essential role of the foreman.

Adapting this to today’s contact center environment, I’ll discuss agents and their coaches or supervisors. His descriptions and recommendations lend themselves to using predictive analytics and machine learning. With agent turnover in captive centers between 25-60% per year and in BPOs well over 100% per year, this is a critical topic for all of us!

Costs of Agent Turnover

Among the costs of labor turnover are “breaking in new agents to replace those who leave.” In earlier posts, I have argued that when your best agents leave, not only does their experience and influence among their peers walk out the door, but their productivity needs to be replaced by three new hires to maintain service levels.2 Additional costs include the supervisors’ time spent helping the new agents which slows down the work of other agents on the team, and the risk of customer dissatisfaction. This relates to the “loss of goodwill” of customers as well as “the demoralizing effect upon the workforce” when there is high turnover. Overall costs to hire and train new agents is around $18,000 for US-based agents, a large sum to consider.

Factors for Agent Turnover

Among the factors influencing the size of turnover that we can now analyze include the “general condition of the labor market” including unemployment rates and labor availability by market. It’s important to analyze the concentration of contact center agents in each location, avoiding sites where the ratio exceeds 5%. Other factors include “the nature of the work that the agents are performing” and “the working conditions” under which they are performing that job, seasonality, the age and prior experience of the agents, and the location of the contact center assuming that you’re still using brick and mortar physical locations. This connects with the number of screens that agents need to access and searches that they need to make to resolve the customer’s issue, all time-able today.

Causes of agent turnover

I fully agree with the author when he wrote: “in the discovery of the causes usually lies the suggestion for the remedies.” Start with “certain unavoidable causes for labor turnover” including marriage, sickness, and infirmities. Undesirable working conditions including long hours, too much overtime work, “disagreeable work,” and inadequate support for the agents also create greater agent turnover.

In addition, if the work is too far from the agents’ homes “they may quit in favor of a job that is more accessible when that opportunity presents itself.” Commute times matter, not distance. A more controversial point that he makes goes against the grain of today’s employee referral programs in contact centers and other workplaces. He states that an agent may quit because his or her “buddy quits” and that “two agents who are close friends are very apt to leave if one of them becomes disgusted and dissatisfied.”

Further, it is useful to analyze career possibilities. In my experience, many agents see the contact center as a stepping stone; if they believe there is “no advantage” to geting promoted within the organization, they will leave.

What the author doesn’t cover is that some agents want to remain a tier-one agent or max out at tier-two and not get promoted any further. Not recognizing what the agent wants and is good at doing will lead to additional turnover. As the author points out, “poor methods of placement” can also cause considerable labor turnover; if agents are assigned without the right qualifications or preparations, “they will easily become dissatisfied or may not be able to perform the job” with good quality.

These causes of agent turnover start early since poor hiring leads to a good deal of labor turnover. Salaries and benefits are also important but maybe not as much as the other causes.

Finally, poor supervision always leads to agent turnover. One of the questions that I always ask is: “How many supervisors on average, and as a range, have each of your agents had over the most recent 12 months?” It is startling to find out that these data are generally not known but when they are collected, few agents have had the same supervisor for the entire year; instead, the ratio ranges from 2 to 6 or 7 due to supervisor turnover or WFM rules that do not keep agents with the same coaches. This causes major disruptions to the way that agents feel that they are being treated and appreciated.

How to reduce agent turnover

Pulling it all together, the author proposes ways to reduce agent turnover starting with the need to “maintain complete turnover records” by department that can be shared across the organization as well as across multiple enterprises including BPOs.

Next, there are many “devices” that can be applied to attract and hold onto agents including “recreational, social, and other” support. Here I would add performance recognition as a critical ingredient for agents. I learned at MCI back in the 1990s that recognizing and rewarding the best performers was invaluable in creating and sustaining an aggressive and bonded culture. I took this idea to Amazon, and we created the “Over the Top” award for our best-performing agents.

Finally, as you might suspect considering the title of his book, the author emphasizes the role of the foreman in reducing turnover. The coach or supervisor needs to concentrate on the jobs or roles in which turnover is highest, thereby revealing whether “wages, undesirable fellow workers, undesirable working conditions,” or other causes are contributing to the problems leading to turnover.

He points out that the supervisor coach should always “stop and have a look at” himself or herself. This final sentence wraps it up quite nicely: “A foreman will be judged by his ability to keep turnover low in his department.” This means analyzing turnover from a team point of view, not just at the agent level. This also means associating turnover with the hiring managers as well as the initial training managers from whom the agent learned the company’s culture, and processes.

Taken together, these lessons from 100 years ago provide an excellent framework to analyze the problem that we are constantly facing in the contact center business: High agent turnover which affects morale and customer experience and contributes to higher costs of operations.

Notes

1Foremanship, Glenn L. Gardiner. A.W. Shaw Company, 1927. If you would like to get a PDF of his section on “Reducing Agent Turnover”, let me know in the Comments field. 

2 This key point is usually overlooked by companies whose workforce management tools and HR departments typically do one-for-one substitution. But when you think about an agent who is paid $30.00 an hour and can handle eight contacts per hour with no repeat contacts and high customer satisfaction, you will need to have at least two replacements who might be paid $21.00 an hour each but can only handle three or four contacts per hour until they have achieved full productivity. This also assumes that they can get up to speed very quickly on the quality side of their job.

Bill Price

Bill Price is the President of Driva Solutions (a customer service and customer experience consultancy), an Advisor to Antuit, co-founded the LimeBridge Global Alliance, chairs the Global Operations Council, teaches at the University of Washington and Stanford MBA programs, and is the lead author of The Best Service is No Service and Your Customer Rules! Bill served as Amazon.com's first Global VP of Customer Service and held senior positions at MCI, ACP, and McKinsey. Bill graduated from Dartmouth (BA) and Stanford (MBA).

ADD YOUR COMMENT

Please use comments to add value to the discussion. Maximum one link to an educational blog post or article. We will NOT PUBLISH brief comments like "good post," comments that mainly promote links, or comments with links to companies, products, or services.

Please enter your comment!
Please enter your name here