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It mostly covers my work as UNISON Scotland's Head of Policy and Public Affairs although views are my own. For full coverage of UNISON Scotland's policy and campaigns please visit our web site. You can also follow me on Twitter. I hope you find this blog interesting and I would welcome your comments.

Tuesday, 4 September 2012

Call centre turnover

A friend of mine recently took over as HR Director of a company with a large call centre operation. She was shocked to see the staff turnover rate in this part of the business was over 100% per annum. That effectively means that on average every single worker left during the year. However, what really appalled her was that the call centre managers didn't see this as a big problem. Bums on seat was all that mattered and as long as they met their statistical targets, all was fine.

XpertHR have just published their annual survey of staff turnover. According to their research the median voluntary resignation rate in the UK was 7.9% in 2011. Or put another way an average of one employee in 11 (9.3%) resigned from their job during that calendar year. The highest resignation rates in the economy were experienced by private-sector-services employers: 11%, compared with 5.7% in manufacturing and production and 6.7% in the public sector. They argue that the considerably higher level of voluntary worker departures in private-sector services probably reflects the greater buoyancy in the labour market in this section of the economy and cuts in public services make workers there less likely to move. Overall, the median total labour turnover rate for 2011 stood at 13.2% and the average at 15.6%. Regional variations have been narrowing and Scotland is mid table at present.

So, back to my HR Director. Sadly, I was not surprised that her call centre managers didn't see this as a problem. The industry does suffer from what I have described as "spreadsheet managers". By that I mean a focus on statistics rather than people management. I recall doing a meeting of call centre workers across Glasgow where the workers could clearly recognise this management approach. They often moved jobs, not for better pay or conditions, but because of the way they were treated. For this reason call centre turnover has always been higher than average, typically 25% or higher. One survey calculated 60% of call centre workers in the UK will leave their job within two years.

Employers rarely fully understand the cost of an employee departure. The 2012 CIPD survey found that the estimated cost per hire is £8,000 for senior managers and £2,500 for other staff. There are also other potential knock-on effects when a member of staff leaves their job, such as overtime costs for other staff covering the post, temporary staff fees and indirect costs such as missed business opportunities. £6000 is therefore a more realistic cost figure. In this context the cost of 100% turnover rates is astronomic. It is estimated that turnover in the call centre industry costs £2bn per year.

Some management gurus argue that higher turnover will be the norm as we adopt portfolio careers. However, they have been arguing this for many years yet the proportion of employees in the national workforce with long periods of service (10 years or more) has remained broadly the same.

The reasons for high turnover can be complex, but they are almost always capable of being tackled. My advice to my friend was to find out why by asking the workers concerned. I suspect she will find that pay and conditions will only be part of the problem. The available research shows that the most important factor associated with intention to quit is job satisfaction. It is followed by a cluster of factors, including the presence of a high-quality workplace, the state of the psychological contract, satisfaction with work-life balance, effective supervisory leadership and excitement in the job. All of these factors are commonly found in poorly managed call centres.

The good news is that better management and creative job design can make a big difference. The result is better performance and a big saving to the organisation.  Needless to say these positive factors are more likely to be present in unionised workplaces. I have been involved in programmes that have reduced turnover to single figure percentages. The simple trick is to stop treating workers like battery hens.

9 comments:

  1. Absolutely, Dave. Parameters for 'acceptable' turnover levels were set by the Scottish government in their Pay Policy - high turnover rates were recognised for the negative expensive business drain that they really are (and they also told a negative story about an unhappy miserable workforce). However - the recyclables from turnover can be unfortunately attractive in today's financially squeezed environment... though of course, the job market has shrunk and folk are finding there just isn't the same opportunity in the sits vacant pages.

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  2. The call centre industry as a whole really does suffer with terribly high staff turnover rates. I've seen it before. A lot of managers in this industry believe that they need not worry about replacing staff as there are so many people out their who can replace any staff members in an instant with jobs being so hard to come by at present. It really is an attitude we need to kick and force managers to see the real cost high turnover has on both their bottom line and to the reputation of the business they are running.

    Mel

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  5. I agree that there are other factors why there is a big rate of turnover in the call centers aside from the pay and conditions. I also believe that it is mostly due to job satisfaction. However, I have relatives who have been in the industry for five or more years already and they actually love their work. The call center industry has addressed these matters of having a high-quality workplace, satisfaction with work-life balance, effective supervisory leadership, and excitement in the job through consistently having team buildings, seminars on leadership, upgrading of the system and other solutions.

    Ruby Chelmsford

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  6. If you want to hire a company experienced in outsourcing call centres and their requirements, North Star Direct can help.
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  7. I Guess recruitment process must change and a job fit to be determined using Big five personality test, emotional intelligent test and increasing self efficacy if I was an HR I would benchmark my best performers and make a fit index to such job since it also include high emotional dissonance, emotional exhaustion and emotional labor. Regarding pay you must focus on the agreeableness personality trait when testing the big five as such people tend to accept low salary and low career opportunities.

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  8. In the new digital economy the customer experience is becoming the competitive edge for most B2C organisations. The customer experience is directly adversely affected by staff turnover. Consistency of service is everything and staff turnover inherently removes consistency. Look at First Direct - always a service award winner and low staff turnover stats - no surprise.

    My own take is that call centre managers are bound by statistics and so will 'put the bum on the seat'. They are inundated with unshortlisted CV's and hire on 'convenience' rather than aptitude. "you're available Monday? Great - you've got the job".

    At Krooter (www.krooter.co.uk) we understand this. A self service call centre recruitment platform we undertake the hard work of shortlisting and give managers the people they should see based upon a technology and HR professional screening in advance of them being submitted to the managers short list portal. And it costs just £199 including posting to all the popular boards (Monster, JobServe, Reed etc etc).

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