Why Call Center Turnover Rate is Now the Most Important KPI

Organizations are more likely to maintain strong and sustained performance when their employees are motivated, productive, and consistently striving for new goals. However, many workers still leave their jobs voluntarily every year.

The call center turnover rate is now a crucial Key Performance Indicator (KPI) in customer service. While organizations traditionally prioritize metrics like customer satisfaction and response times, the increasing significance of turnover rates signals a shift.

We’ll delve into why call center turnover rate has become the most important KPI and how organizations can use this insight to improve overall performance.

What Is Employee Turnover?

Employee turnover indicates the number of workers leaving the company, whether voluntarily when employees are enticed by a competitor offering higher salaries or involuntarily when staff members are laid off or terminated due to poor performance.

Companies commonly assess the employee turnover rate as a percentage. They are derived by dividing the departed employees within a specific timeframe by the average workforce during that period.

For example, if 10 out of 150 employees left last year, the turnover rate would be 6.7 percent.

10 / 150 x 100 = 6.7 percent

This metric is significant for HR professionals and managers to assess their alignment with industry benchmarks or organizational goals. If the turnover rate deviates, they can take steps to reduce turnover, such as enhancing employee engagement and managerial skills. Additionally, management may have established a target turnover rate that HR aims to achieve.

So, employee turnover is crucial for organizations to gauge their overall performance. Just as financial metrics gauge fiscal health and customer-related metrics measure satisfaction, employee turnover reflects workforce management’s organizational well-being and effectiveness.

Understanding Its Impact

Eliminating employee turnover is impractical for most companies. Despite thoughtful recruitment strategies, not every employee will be an ideal fit, and enticing job offers might arise. Besides, adding new employees can bring in fresh perspectives.

However, excessive turnover increases costs and diverts time and attention from organizational goals. It can lead to a loss of institutional knowledge and hinder efforts to foster a cohesive corporate culture. In 2022, the prevalence of quiet quitting and the rise in great resignations posed persistent challenges for call centers, impacting customer experience and elevating operational costs.

Research from the SQM Group indicates that 47 percent of managers cite high agent turnover and absenteeism as major challenges in call center operations.¹ This has resulted in a notable drop in First Call Resolution (FCR) and Customer Satisfaction (CSAT).

The consistently high agent turnover rate of 38 percent is a primary obstacle to achieving high CSAT and FCR rates in call centers. And the employee exit trend isn’t calming down anytime soon. More agent turnover means more burnout, absentees, higher operating costs, and lower FCR and CSAT.

It emphasizes that call center turnover is the top KPI. This idea comes from the belief that keeping an eye on turnover is crucial for running things smoothly in the call center world.

Call Center Turnover Cost in Numbers

According to the NICE WEM Global Survey, call centers experienced an average attrition rate of 42 percent in 2021.² Additionally, research from Cresta spotlights the attrition cost for call center roles, which is around 1.3 times the average attrition rate in the U.S. since COVID-19:³

Contact centers overall: 83.7 percent
Sales roles: 79.8 percent
Care and support roles: 87.6 percent

Beyond the concerning statistics, high turnover rates create major financial burdens for contact centers. The constant churn requires perpetual recruiting and training investments, including:

Contact centers overall: 14.3 months
Sales roles: 15 months
Care and support roles: 13.7 months

Meanwhile, the yearly expenses to replace a call center with 100 agents are calculated as follows:

Contact centers overall: $800,000–$1.7 million
Sales roles: $800,000–$1.6 million
Care and support roles: $900,000–$1.8 million

This excessive turnover resulted in surging expenses for recruitment, declining productivity, and falling workplace morale. The data signals an urgent priority for the industry – mitigating the turnover crisis to build workforce stability.

Factors Contributing to Employee Attrition in the Call Center

There is a long list of reasons for high agent turnover in contact centers, making many operators consider turnover an unavoidable part of the industry. However, there are ways to address these high turnover rates. To find solutions, it’s crucial first to pinpoint the root causes of turnover:

Monotonous or repetitive tasks
Not being recognized for efforts
Limited opportunities for career advancement or development
Rigid work environment
Lack of employee engagement
High pressure or stress
Dealing with abusive calls
Diminished job satisfaction

The daily emotional strain of customer service is a significant burnout driver. Handling complaints, abusive calls, and high-stress interactions takes a toll on mental health over time.

Moreover, low pay is a factor in contact center turnover rates. Many of these centers fill most roles with minimum-wage positions, making it tough to compete with companies like Amazon, which hire employees with similar skills and consistently raise their wages.

Why Employee Turnover Matters

It critically measures workforce stability and effectiveness. A high turnover rate signals potential retention issues, impacting customer service, operational efficiency, and finances.

Monitoring the turnover rate provides insights into workforce health, enabling proactive measures. A lower rate indicates a more stable and experienced team, ensuring consistent and high-quality customer service. The call center turnover rate is crucial, reflecting overall performance and sustainability in delivering exceptional customer experiences.

High employee turnover rates inflict damage on call centers in multiple areas:

Financial Implications

According to Deloitte’s report, reducing agent turnover by 1 percent can save a company with 30,000 employees and an average attrition rate of 13 percent, or approximately $32.9 million annually.⁴

The financial implications of high attrition rates are important. The costs of recruiting, training, and onboarding new employees increase. Recruiting expenses involve advertising positions, conducting interviews, and processing new hires.

Training costs include the time and resources invested in bringing new agents up to speed, which can be considerable, especially in roles that require specific skills or knowledge. That’s why addressing the agent turnover issue is crucial to achieving substantial cost savings.

Customer Satisfaction and Service Quality

High attrition rates can lead to inconsistent customer service as agents leave and new ones come in. New employees have to be trained, and during this time, the quality of customer service may not be consistent.

For instance, a customer might receive different information or assistance depending on the agent they speak to or the department they contact. This could contribute to a less-than-satisfactory customer experience.

Loss of Productivity

There is also a loss of productivity during the transition period. As seasoned employees leave, their replacements need time to reach the same level of efficiency and effectiveness. This transition period could bring a temporary dip in productivity. The slowdown can directly impact service delivery and overall operational performance and influence the call center’s day-to-day effectiveness.

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References

1 “Call Center Agent Turnover Problem: The Great Resignation and Quiet Quitting and Top 3 Tips to Improve It.” SQM Group, 10 Jan. 2023, www.sqmgroup.com/resources/library/blog/call-center-agent-turnover-problem-improvement-tips.

2 NICE. “2022 NICE WEM GLOBAL SURVEY: CONTACT CENTERS – from ATTRITION to RETENTION.” Nice.com, Jan. 2022, www.callcentrehelper.com/images/resources/2022/nice-attrition-to-retention-global-survey-20220211.pdf.

3 How AI-Driven Real-Time Coaching Stops the Revolving Door of Agent Attrition, Increases Productivity, and Improves CX Reducing Ramp Time & Agent Attrition in Contact Centers CRESTA INSIGHTS REPORT 2022 Q1.

4 Mittal, Kirti, and Asst Professor. “Article ID: IJM_10_05_035 International Call Centers.” International Journal of Management (IJM), vol. 10, no. 5, 2019, pp. 391–399, iaeme.com/MasterAdmin/Journal_uploads/IJM/VOLUME_10_ISSUE_5/IJM_10_05_035.pdf, https://doi.org/10.17605/OSF.IO/ES5GN.