June 28, 2021 | Best Practices,Blog

High call center turnover is expensive for businesses. Seems obvious, right? Employees leaving will need to be replaced. Now, you’re looking at recruitment, hiring and training costs, and it’s going to take some time before your new employees are up to speed. While high turnover can negatively affect businesses in any industry, it is especially common and expensive for call centers.

The turnover rate for call centers is remarkably high. The industry standard is 45 percent. What’s more, that already high turnover is likely to be amplified by the “Great Resignation.” If you haven’t heard that term yet, you will soon. It is expected that companies across industries will see 30% of their workforce resign in the next six months.

Many call centers plan for employee turnover. Even with good planning, though, it can be hard to determine just how much employee attrition is costing your business. Many businesses account for recruitment and training costs, but not for less obvious costs. Productivity and overtime costs, as well as the cost of poor customer experience all factor into the total cost of turnover.

So, how do you determine the real cost of turnover for your call center? How can you be better prepared? Start by understanding these 3 ways that call center turnover can be more expensive than you think.

The “hidden costs” of turnover can be the most expensive

Recruitment, hiring, and training costs are the most obvious upfront costs when onboarding a new agent. It’s true that those costs are substantial, with training often taking up the lion’s share of the cost breakdown. So, you may be surprised to hear that the cost of lost productivity is often more than the cost to hire a new agent. Costs associated with poor customer experience and less tangible costs, like lost employee morale and lost work experience when tenured agents leave, also need to be considered.

Factoring in all costs, if you run a contact center with 100 agents and your attrition rate is the industry standard of 45 percent, you will spend anywhere from $1.6M to $4.8M each year on turnover.

Hiring new agents takes time

Recruitment, hiring, and training costs are the most obvious upfront costs when onboarding a new agent. It’s true that those costs are substantial, with training often taking up the lion’s share of the cost breakdown. So, you may be surprised to hear that the cost of lost productivity is often more than the cost to hire a new agent. Costs associated with poor customer experience and less tangible costs, like lost employee morale and lost work experience when tenured agents leave, also need to be considered.

Factoring in all costs, if you run a contact center with 100 agents and your attrition rate is the industry standard of 45 percent, you will spend anywhere from $1.6M to $4.8M each year on turnover.

One of your experienced call center agents just moved on to a new opportunity. This is great news for them, but not for your business. You now need to recruit and hire a new agent to take their place. How much time will that take?

On average, it takes around 40 days to fill a customer service agent role. That means for those 40 days, productivity will drop for your contact center team. Losing one agent may not seem like a huge impact, but what if you have 30 percent of your call center staff resign? The impact will be substantial.

Let’s do some quick math. If you have 300 call center agents and 30 – 45 percent leave in the next six months, your call center would be down 90 – 135 agents. It’s unlikely that they will all leave at the same time. Each of those positions will need around 40 days to fill. Because of the fill time, the cost of lost productivity will likely extend well into next year. Until those positions are filled, customers will likely experience longer wait times. Your other agents will also need to fill the gaps, meaning increased overtime costs. The financial impact to your business will quickly become apparent.

It will be a long time before you see ROI for a new agent

The time to break even on a single new call center agent can be more than five months. Unfortunately, not all new hires will stick around for the full five months, meaning it can take even longer to break even on your hiring and training investments.

The average cost to replace a contact center agent is between $10,000 to $20,000 per agent, but that only accounts for direct costs. These costs include the things you would expect, like hiring, recruiting, and training. Indirect costs, such as loss of productivity and poor customer experience, drive the total cost of turnover per employee even higher. This pushes the break-even point even further out and it can take more than a year before a new agent is profitable. Until then, your bottom line is suffering.

Turnover in unavoidable. This is especially true now, as more employees are seeking new opportunities and leaving their old jobs behind. By understanding these three ways that call center turnover is costing your business, you can be better prepared. Understanding the true cost of agent turnover will help you put a plan into place to reduce that cost, meaning a better bottom line for your business.

If your business is struggling with high agent turnover, Televerde can help. We offer innovative and socially responsible customer engagement solutions that can help your business reduce turnover costs and improve customer experience.

Eric Ryan

June 28, 2021,   Best Practices,Blog

Eric Ryan is a Senior Content Manager at Televerde with a background in marketing and communications and experience in several industries.


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