“A New York investment firm's $278 million purchase of PRC in 2006 was a bust, with the Plantation call-center operator going bankrupt within 14 months of the deal. Now Diamond Castle Holdings claims it was swindled by the seller -- Barry Diller's IAC/InterActiveCorp. Diamond Castle entities last week sued IAC for about $135 million in damages in New York Supreme Court.
Diamond Castle says in its suit it would never have bought PRC had it been privy to information about a major contract awarded to PRC by Verizon Wireless just before the purchase. IAC touted the Verizon Wireless contract to Diamond Castle, saying it would vault PRC from "a second tier to the top tier of call-center providers," the suit alleges.
IAC told Diamond Castle the Verizon Wireless contract would add $48 million to PRC's 2007 revenue and increase earnings before taxes, interest and other items by nearly $8 million, the suit says. In reality, Diamond Castle says, PRC lost about $18 million on the contract in 2007 and, with further losses projected for 2008, PRC had to file for bankruptcy in January.
Diamond Castle claims in the suit that IAC and PRC hid "information of a highly damaging nature" about the contract. Namely, that labor costs at an Austin, Texas, call center that handled Verizon Wireless were inaccurate and that PRC had trouble retaining staff to service the contract.”
Please Note – PRC emerged from Chapter 11 in June 2008 and is currently operating with a new management team and financial structure. Previous history should not be considered as indicative of their performance capabilities.
One Best Practice factor for improving new hire retention is to carefully define the job by understanding the competencies that drive successful job performance. Typically, this is accomplished through a job analysis. The chart below outlines sample job analysis results from one insurance organization, demonstrating that the competencies critical for job success may vary by job family. Customer Focus, for example, is more critical to success for Care agents than for Sales agents.
For an organization seeking to improve new hire retention, the critical starting point is a job analysis for each major call type. The job analysis should define the abilities and behaviors that drive job success. By defining the job, the hiring organization lays the foundation for the recruiting and hiring process because the job criteria are linked to organizational success.
Using pre-employment assessments is another Best Practice demonstrated by organizations with lower new hire attrition. Assessments allow the hiring organization to best measure the competencies outlined in the job analysis described in Factor 1. Assessments measure abilities and behaviors needed to successfully perform the job and may include simulations, cognitive ability measures, personality assessments, and biographical data assessments.
The use of assessments should always be accompanied by another Best Practice – validation models that provide statistical evidence of the link between a candidate’s assessment performance and his/her on-the-job performance and tenure. This allows hiring managers to make quality decisions about job candidates by ensuring they meet or exceed a validated cut-off point on the pre-hire assessments. The use of objective assessments, calibrated against retention and job performance is a critical Best Practice for any firm attempting to reduce early stage attrition.
Best Practice organizations understand that the Supervisor or Team Leader position is potentially the most critical position on a contact center production floor. Contact center agent attrition in the first two to twelve months is significantly influenced by the ability and behavior of the Team Leader.
Best Practice organizations evaluate candidates for Team Leader positions just like they do for front-line agents.
In previous whitepapers, we highlighted the environment and leadership as two issues that impact the Culture of Attrition. Improving the alignment between HR, Training, and Operations can help enhance the environment and ensure better leadership within the center. In many organizations, HR, Training, and Operations all have separate goals and incentives regarding attrition reduction. Each organization must have the same incentives related to attrition, allowing the organization to attack attrition with a single focus that standardizes processes and balances the needs of all three functional areas.
Factor 7 – Rinse and Repeat and ROI
Best Practice organizations that have achieved low early stage turnover continue to rinse and repeat the processes outlined in this paper. These organizations use an Employment Lifecycle approach that revisits the hiring process via systematic data analysis on a regularly scheduled basis (e.g., every 12 to 18 months). The job analysis is revisited for updated requirements or changes. The validation study is re-run, taking advantage of all the data collected to fine-tune the scoring. The result is a data-driven process that allows HR to demonstrate and quantify improvements and progress within the hiring process. This leads to strong returns for investing in the hiring process. Organizations can see returns ranging from $3 to $20 for each $1 invested in Best Practice hiring processes.