Turnover Costs: 10 Ways To Turn Over A New Leaf turnover costs

Turnover Costs: 10 Ways To Turn Over A New Leaf

More than four years after the global shutdown caused by the COVID-19 pandemic, it would be reasonable to think the effects of the Great Resignation are far behind us. If you’re a contact center leader dealing with turnover costs, though, you’re likely to argue otherwise.

The hard truth is that employee turnover costs remain a significant and troubling problem for most contact centers. In fact, according to a Deloitte Digital survey, 63% of contact centers are still facing lingering agent shortages long after the pandemic. And the costs remain high. 

For any organization, the true costs of turnover are an enormous strain—on balance sheets, operations, and team dynamics—and they deserve attention. But because customer experience and employee experience are inextricably linked to the overall success of customer support centers—and their brands overall—the rates of turnover are particularly alarming.

The negative impact goes far beyond increased recruitment costs. From loss of institutional knowledge to decreased productivity to lack of growth, the hard and soft costs are high—to the tune of hundreds of millions of dollars across industries.

Here’s how the direct impact shakes out for U.S. businesses, based on national data:

  • According to February 2024 U.S. Bureau of Labor and Statistics reporting, on average, a U.S. company will experience a total separation rate of 47% in its workforce every year due to voluntary and involuntary turnover.
  • According to Gallup’s 2023 State of the Global Workplace survey, 51% of employed workers are actively or passively job seeking.
  • Another Gallup survey shows it costs between one-half and twice an employee’s annual salary to replace them.

In this post, we’ll identify the root causes of worker turnover, the real costs and organizational-wide effects of rising employee turnover rates, and ten proven strategies for turning over a new leaf.

How To Calculate Employee Turnover Rate

First, let’s define worker turnover and how to calculate rates of turnover.

Employee turnover is defined as the total number of workers who leave an organization over a set time period, usually calculated on an annual basis. It includes voluntary turnover—when employees voluntarily leave their positions—as well as involuntary turnover—employees who are involuntarily separated from a company through layoffs, strategic workforce reductions, or terminated for cause—regardless of whether other people filled the roles.

Employee turnover is typically expressed as a percentage, and it can be broken down and analyzed by category, such as job type, level of experience, department, salaried versus hourly employees, geography, or by total annual salary.

What Are The Direct And Indirect Costs Of Turnover?

Employee turnover is a persistent and tricky challenge for contact centers because the true costs of turnover include both direct and indirect costs. Both direct costs and indirect costs have measurable financial impact related to decreases in areas such as:

  • Productivity
  • Team morale
  • Customer satisfaction
  • Management time
  • Employee satisfaction

While the cost of turnover is significant—both the obvious and hidden costs—there are ways to control, stem, and even, ultimately, reverse the related losses. It starts with building an effective long-term agent retention strategy for your customer support center.

What Are The Root Causes Of Involuntary Turnover?

Before addressing turnover, though, it’s helpful to understand its underlying causes. Several key factors contribute to high turnover rates and the negative impacts on your contact center, including:

  • Excessive job stress
  • Low job satisfaction
  • Limited career development opportunities
  • Lack of performance recognition
  • Poor work-life balance
  • Inadequate leadership support
  • Limited training
  • Below-average compensation, including benefits and hourly rates or annual salary

Because of these issues, employees may perceive a job in a contact center as a dead end, with limited opportunities for career advancement. It’s a perception that keeps active employees from remaining engaged and prevents others from ever considering customer service jobs.

Inadequate employee development or training, for example, can leave agents feeling ill-equipped to effectively handle their current responsibilities and lacking the confidence or vision to see themselves in other, more senior, roles in the organization. It’s a direct path to employee attrition.

With inadequate support or training, lack of career development opportunities, and no clear path to anything better within a customer service organization, the results are low employee morale, lack of employee engagement, and increased employee departures. And, importantly, it can have a significant and widespread cultural impact on workers who do stay—for now.

How Do You Reduce The Costs Of Employee Turnover?

Today’s contact center roles require mastery of omnichannel support at very high volumes. At the same time, customer expectations and demands are also at all-time highs. This problem is further compounded by AI-driven tools increasingly used for simple support tasks. That means human agents are dealing with higher volumes of more complicated, high-stress issues from increasingly demanding people. It all leads to record increases in job stress and burnout, often within already-fractured organizational cultures.

Your agents, and the work they perform, are the single biggest contributors to customer experience. So, if you’re a contact center leader struggling with turnover costs, turning over a new leaf is critical.

But where do you begin?

First, you must understand what keeps your current employees satisfied, then find ways to attract new hires and turn them into long-term, star employees. To do better, you must develop and execute creative, effective employee retention strategies.

Proven Strategies To Reduce Employee Turnover

To successfully address employee turnover and the associated costs requires a comprehensive approach that tackles the underlying causes of voluntary turnover and fosters a work environment that increases employee retention through a positive company culture. Here are ten effective strategies to do that.

1. Offer Comprehensive Onboarding Programs

Establishing an effective agent onboarding program is critical for setting up new hires for success—from Day 1. Provide comprehensive training that covers the technical aspects of the job and also clarifies the company culture, values, and expectations.

Assign mentors/buddies to guide new employees through their initial days, and encourage two-way, candid feedback between new hires and their mentors/buddies. This will help them acclimate to the environment and feel supported while accelerating ramp-up time. 

2. Establish Clear Paths To Career Advancement

Employees are more likely to stay with any organization if they see opportunities for growth and career advancement beyond their current roles. A powerful tool for retention is developing clear career paths to a variety of potential advancement options within the organization. Offer training programs, certifications, and a variety of choices for skill development which align with employees’ career aspirations and professional goals. Regularly communicate these opportunities for advancement to employees to keep them motivated and engaged.

3. Create A Culture Of Appreciation

Providing regular feedback and organization-wide recognition for good work is essential to improving employee morale and motivating current workers so they’ll want to stay. Create a culture of appreciation by implementing a system for direct managers to quickly provide constructive feedback on performance and acknowledge achievements.

Recognize employees for their contributions through awards, announcements in team meetings, and with incentive programs. Feeling valued and appreciated can significantly impact an employee’s decision to stay. According to Gallup data, the most effective recognition is honest, authentic, and individualized.

4. Implement Work-Life Balance Initiatives

Contact center roles are demanding, often requiring agents to work irregular hours on changing schedules. Implement initiatives to support work-life balance, such as more flexible scheduling options, work-from-home and hybrid work choices, and even compressed work weeks. Encourage all leaders in your customer support center to be mindful of and empathetic to employees’ personal commitments. Provide support when needed. Balancing work and personal life leads to greater job satisfaction and reduces burnout—all boons for employee retention rates.

5. Invest In Employee Well-being

Prioritize employee well-being by offering resources and support for good physical and mental health. Consider offering access to free counseling services, stress management workshops, and wellness programs. Create an inclusive culture that promotes open, honest communication and fosters a sense of inclusion. When employees feel cared for and supported, they are more likely to remain committed to their roles long-term.

6. Give Fair Compensation And Benefits

Competitive compensation and comprehensive benefits packages are essential for attracting and retaining top contact center talent. Conduct regular reviews to ensure salaries are aligned with industry standards, employee expectations, and contributions. Offer attractive benefits packages that include health insurance, retirement plans, paid time off, and employee discounts. Investing in employee compensation demonstrates a serious commitment to their well-being, improves morale, and increases loyalty to your organization.

7. Commit To Continuous Training And Development

Continuous learning is vital to keeping employees engaged and motivated in their roles, and to aspire to keep improving. Commit to ongoing training and development opportunities that help employees enhance their skills and stay up-to-date with industry trends. This could include technical training on new software or equipment, soft skills development, or cross-training in different departments. Encourage a culture of learning and improvement where employees feel empowered to expand their knowledge and capabilities, which drives positive customer impacts too.

8. Promote Employee Engagement Initiatives

Increase engagement by involving employees in decision-making processes and regularly soliciting their feedback. Organize team-building activities, social events, and group volunteer opportunities to strengthen bonds among agents. Encourage open communication channels where they can voice their concerns to leadership and each other, offer new ideas, and make suggestions for improvement. Engaged employees are more likely to feel invested in their work and committed to the organization’s long-term success.

9. Develop Regular Performance Recognition Programs

Develop and implement performance recognition programs that reward employees for meeting or exceeding their performance targets. These could include incentives like cash bonuses, gift cards, or additional time off. Recognize both individual achievements and team accomplishments to prioritize organizational excellence and collaboration. Celebrating successes not only boosts morale, but it also reinforces desired behaviors and performance standards while amping up individual and overall productivity.

10. Conduct Exit Interviews And Feedback Analysis:

Conduct exit interviews with employees to understand the reasons for their departures. Analyze feedback from the exit interviews to identify common themes or areas for improvement within the organization. Use this information to make informed changes to policies, procedures, or work conditions that address underlying issues contributing to turnover. Continuous improvement based on honest feedback demonstrates a commitment to employee satisfaction and retention.

Related Article: Top Reasons For Call Center Turnover And How to Reduce It

More Resources To Help

Since the Great Resignation, turnover costs have become a long COVID symptom for customer support centers. A hard-to-close revolving door of agents can directly affect customer experience, and, ultimately, your organization’s bottom line.

Turnover Costs: 10 Ways To Turn Over A New Leaf turnover costs

Continually understanding what causes high employee turnover rates and what you can do to help improve agent engagement and satisfaction will help reduce attrition. Our free ebook, Control Contact Center Costs By Improving Agent Experience, offers insights into:

  • Battling the high cost of turnover
  • Improving training
  • Making work more engaging

For more ways to rethink and revamp your training, request a demo and see how Playvox solutions empower agents to feel engaged and deliver better customer experiences.

Turnover Costs: 10 Ways To Turn Over A New Leaf turnover costs
Playvox Team

We are a devoted and enthusiastic team that loves sharing knowledge!

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