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Date/Time: 2/8/2010 8:17:59 PM MST

Next Steps

Use the Recession to Lower Turnover Costs

Published: Thursday, February 26, 2009

While the US recession is causing many challenging problems, it is also driving more job candidates to knock on HR doors at call centers. This rare increase in job candidates, compared to historically low unemployment, creates an opportunity for call center organizations to reduce their long-term attrition by moving quickly in the short-term.

Our research and practical experience deploying predictive pre-employment hiring solutions for call centers shows that when a call center organization can be more selective in the hiring process, the general result is lower turnover. The challenge, when unemployment is low, is to recruit enough job candidates into the pipeline to be able to increase the selection ratio for the hiring process. Many firms struggle, for a variety of reasons, with increasing their candidate pipelines.

So, with the increase in job candidates knocking on the HR doors, call center organizations have an opportunity to tighten the selection ratio and potentially hire new employees that will be more likely to stay on the job longer. The economics are powerful. Based on our 2008 Call Center Recruiting and Compensation Survey, we know that the average cost of attrition per agent is $5,466.32. As an example, a 500 agent center with 50% attrition is losing $1.4 million per year in turnover costs.

The critical factor in accomplishing this effort is the assumption that the organization knows who to hire when they knock on the door. Knowing who to hire also means knowing who NOT to hire. This means that they have studied who stays on the job and who leaves. They understand the competencies that relate to good job performance and know how to measure those competencies with the right assessment tools. And, they have modeled the incremental retention gains that can be achieved by increasing the selection ratio.

Figure 1 below illustrates this model.

assessment calib 2.27

For those organizations with the right hiring models, the recession brings a great opportunity to hire talent that otherwise is not available and bring down your turnover rates.