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Managing Staff Turnover in Offshore Call Centers

Altaf Khan

© Altaf Khan 2006 (A modified version of this article appears on
Sourcingmag.com as Call Center Outsourcing: How To Retain Employees)

Summary

High Customer Service Representative (CSR) turnover is a common problem at most offshore call centers. It plays a pivotal role in reducing quality, increasing recruitment and training costs, and reducing the marketability of a call center operation. Many call center managers take this problem as being part of the “nature of the beast” and try to live with it without doing much about it. Others tackle it simply by increasing the payments to CSR’s. The very successful call centers have, however, figured out other ways of making the situation better. Here we present some of them.

Turnover - also known as attrition or churn - is the percentage of CSR's that leave a call center in a specified period. High CSR turnover is a common problem at most offshore call centers. This factor plays a pivotal role in reducing quality, increasing recruitment and training costs, and reducing the marketability of a call center operation. Many call center managers take this problem as being part of the “nature of the beast” and try to live with it without doing much about it. Others tackle it simply by increasing the payments to CSR’s, but that generally does not deliver the required results in long run either. The very successful call centers have, however, figured out other ways of making the situation better. No silver bullets yet, but smart management strategies do payoff. Here we will discuss some of them, but before we do that, let us discuss the costs and some of the causes.

CONTENTS:

The cost of turnover
Causes of high turnover
Planning to reduce the turnover
Reduce turnover by hiring the right persons
Create a fun, supportive environment
Compensate fairly
Establish benefits programs
Ensure career advancement
Avoid overwork
Hire part-timers
Find day-shift clients
Find clients with intellectually challenging work
Empower your team members
Improve your line managers
Exit interviews are not enough

1. The Cost of Turnover

How much are you losing when you lose a team member after he or she has worked for a year at your organization? Firstly, you are losing what you spent on advertising and maintaining your HR team. Then are the costs of interviewing and assessments. Then come the training costs, that not only include the wages of the trainer along with other allied expense, but also the wages being paid to the new recruit while he or she was producing zilch. Further costs are incurred during their first few weeks when they use up their supervisor's and other co-workers' (non-billable) time. During this period the new hires are only partially productive, but are being paid as a full timer. It is important that you track these expenses to fully understand the total cost of turnover. Another factor that you have to keep in mind the cost of lost opportunities - an increasing number of high-paying buyers of call center services are staying away from suppliers that suffer from high turnover rates. This can be a significant, but hard-to-quantify figure. What is also significant, but hard-to-quantify is the impact on productivity caused by the lowered employee morale that is a direct consequence of high turnover rates. Lowered morale combined with inexperienced CSR's handling an increasing number of calls results in decreased customer satisfaction which leads to increased costs due to call escalations and repeat calls.

2. Causes of High Turnover

Call center CSR positions pay quite well in offshore destinations like India and Pakistan. An individual with minimal education, but with a reasonable accent and basic customer-interaction skills can make much more than, for example, a rookie civil engineer or even a medical graduate. Once employed, these CSR's leave their organization for one of two destinations: another call center for better compensation or better work environment; another line of employment for more interesting work, better advancement opportunities or better work environment.

Call centers in non-English speaking countries generally employ CSR's with at least 14-years of formal education. Up to 30% of these CSR may have 16-years of education or more. These CSR's - who joined the CSR career due to attractive salaries on offer - are asked to do a solo job that is often repetitive and does not require them to use their intellectual abilities that they developed during their college education. This results in shear boredom that eventually leads to a change of career.

The chances of career advancement in a call center are quite limited. This is a direct consequence of their very flat organizational structure. Moreover, most call centers do not have clearly defined career paths. These factors make being a CSR an unattractive career choice.

Most call center jobs are available during the evening shift only. CSR's are offered little room to maneuver in schedules that are generally quite inflexible. Moreover, they have to perform for long hours in confined spaces. Some can live with these restrictions for a couple of years, but the effect it has on their mood and social lives makes the value proposition just too unattractive in the long run.

An often overlooked cause that contributes a great deal to the turnover rate has to do with the line management function. Line managers have great control over how CSR's feels about their job on a day to day basis. They can make them feel better by showing flexibility in scheduling or turn them off through obnoxiously intrusive monitoring. Any sort of abuse of power by the manager or public humiliation of an employee is a big contributor towards a high turnover rate.

3. Planning to Reduce the Turnover

Appropriate planning and tracking always delivers better results as opposed to random fire-fighting. Find out the main causes of turnover at your organization. Analyze those causes and come up with a list of steps that you are going to take to address those causes. Implement those steps and monitor their effectiveness and make readjustments accordingly.

4. Reduce Turnover by Hiring the Right Persons

Develop a profile of the team members who have been with you for some time and are happy, motivated, and productive. Look for the characteristics from that profile when assessing new applicants. Make sure to update that profile periodically.

5. Create a Fun, Supportive Environment

Walk into any thriving call center; it will have a low turnover rate. It will also be a fun place to work at and the staff members working there will be working as a well-knit team. The fun atmosphere and personal bonds with supportive team members go a long way in attracting and retaining staff members. The management has to put a lot of effort in building such cultures. Sustaining such cultures requires careful planning, a reasonable budget, proper screening and assessment of candidates, and a clear emphasis on training.

6. Compensate Fairly

Keep in touch with the market trends. Make sure that a typical team member in your operation is making at least what he or she will make at similar call centers in your geographical area. Make certain that team members with similar productivity are compensated equally within your organization.

7. Establish Benefits Programs

Make your organization more attractive for prospective team members and make the current team members want to stay longer with you through profit-sharing schemes, paid vacation, health and retirement plans, tuition-fee reimbursements, and car and motorcycle loans.

8. Ensure Career Advancement

Your team members will take an interest in an organization's growth if the organization cares about their career advancement. Sit down with each individual and chalk out a future growth plan for them. Try to find out what they want to do with their professionally and see if you can make at least part of that possible. Make sure to provide the training that they will be requiring for future responsibilities ahead of time. Understand that training increases the market value of an individual. What that means is that you will need to pay more to those who you train! These additional costs, however, are justified as your staff members will be working with increased productivity.

Another way to manage this situation is through having a set of diversified businesses instead of just a call center business. This way you will be able to provide your call center team with other avenues of growth in case they choose not to latch on one in the call center.

9. Avoid Overwork

Overwork is a terrible demotivator. It not only reduces the quality of service and diminishes productivity, but also contributes to the turnover rate. During every shift, schedule sufficient time away from the phone for each team member.

10. Hire Part-Timers

The flat-pyramid structure of a call center does not allow for too many team members to move into supervisory roles. Some call center managers tackle this by hiring part-timers. These part-timers may have other jobs or are students or homemakers, etc., and are more interested in supplementing their income and less in career advancement. They can do their low-paying, intellectually-challenging job during the day, and then do this high-paying, low-complexity job in the evening. This way they will not get bored just serving customers over the phone. The especial advantage for students is that when they graduate from university, they will not only have a degree, but will also have in their possession world-class communication skills that they picked up while working at the call center! These skills will help them advance quickly in almost any future career that they may choose for themselves. Moreover, some of them may even choose to continue their career in the call center industry on a full-time basis.

11. Find Day-Shift Clients

They are difficult to find, but one should always try to look out for call center clients that can offer work for your day-shift. You can offer prospective day-shift clients better rates as day-shifts are cheaper to run due to higher retention rates.

12. Find Clients with Intellectually Challenging Work

As was mentioned earlier, an average CSR in an offshore call center is better educated than an average CSR in a developed country. They get easily bored by order-taking and similar simple work. Turnover of these CSR's can be reduced by automating dull, repetitive tasks, and finding work for them that is intellectually more challenging.

13. Empower Your Team Members

Your team members will take more interest in their work if they are empowered to take decisions. These decisions may include those that are required for solving customers' problems. They may also include the ones related to the nature of the work a team member is asked to do, the quality of the work environment, and setting of schedules. Be flexible - whenever feasible, let them take the decision!

14. Improve Your Line Managers

Tirelessly train your line managers in how to manage his or her team members for achieving superior productivity. Teach them that they can manage without being overly controlling, overly critical. Hone their soft-skills. Monitor their performance. Reward them for the enhanced productivity of their teams and diminished turnover rates.

15. Exit Interviews Are Not Enough

Exit-interview is an after-the-event activity. Just think about the benefit that you would have gained if you had interviewed the exiting person six months prior to the exit! Retaining a trained employee is much cheaper than screening a new one and then training him or her. Clearly, being proactive is better for the bottom-line.

Here is something that you can do with a minimum of fuss: ask your team members to anonymously write on a piece of paper two things that they like about their job/company and two things that they don't. Compile the results. Email the results to all with a plan on how you are going to address the grievances. Give them a timetable for implementation and then deliver. This exercise will benefit your organization in two ways: one, the complaints will go down; two, your staff members will start trusting you, because with your actions, you had shown that you trust their opinion. Now having a team that trusts their manager - that is management nirvana!