What is attrition?
What is attrition? Attrition is a reduction of staff for voluntary or involuntarily reasons. For large enterprises like contact centers, employee attrition is often viewed as an unavoidable cost of doing business. As a result, they do not calculate the attrition rate, due to the mistaken assumption high staff turnover is inevitable in these settings. With high volumes of customers to deal with in a limited amount of time, contact centers can indeed be challenging environments, and it takes employees with the right set of core competencies to fit the role and be truly successful.
The Cost of Employee Attrition and Turnover by Industry
Employee attrition affects both high and low performers alike. There are two sides to staff turnover: positive and negative. Positive attrition occurs when low-performing workers leave voluntarily or are fired. However, when top-performing employees who are responsible for driving sales and increasing revenue become demotivated and start looking for the exit, it is known as negative attrition. Negative attrition implies a larger, more serious problem within an organization.
One study, conducted by FurstPerson, illustrates the financial toll employee attrition can take on an organization. Across several major industries, staff turnover can cost anywhere from $1,500 to $16,650 per agent.
Few industries are immune to some workforce erosion. Some industries are subject to high attrition rates in the tight labor market. The attrition rate in IT industry is one of the highest among business sectors at 13.2 percent. However employee attrition is an avoidable problem in and of itself. In fact, a high attrition rate is usually a symptom of a larger, systemic problem within the organization.
4 Common Causes of Attrition and Reasons for High Employee Turnover Rates
What is attrition rate? It is the rate of staff turnover or the number of employees who leave the organization. Every organization should calculate the attrition rate because a high attrition rate indicates an organizational problem. While some companies with large bodies of frontline workers see high attrition as simply par for the course, a high attrition rate can almost always be boiled down to internal problems and issues.
Below are some of the more common reasons for attrition.
1. Poor training can cause a high attrition rate
According to go2HR.com, 40% of employees who receive poor job training leave their positions within the first year. In contact center environments, oftentimes there is pressure to compress training programs so new hires can begin handling calls more quickly. In turn, training is typically quick and packed full of information so employees can begin assisting customers as soon as possible.
However, whittling training time down too much can leave employees feeling unprepared to perform the essential duties of the job.
One way call center managers and directors can avoid staff turnover issues is to create a longer transition period between training and independent job performance. Additionally, creating an operating environment with a higher supervisor-to-employee ratio helps ensure employees will have the support, direction and guidance they need to perform well.
2. Poor management increases employee turnover
In industries across the board, revenue is generated by performance, and performance is ultimately about people. Driving year-over-year returns involves investing in employees, especially leadership positions. One survey conducted by FurstPerson illustrates as much, highlighting a correlation between a director’s tenure and employee attrition.
The research demonstrates that call and contact centers with leaders who stay longer tend to have employees who also stick around longer and report higher rates of satisfaction. In fact, directors with five or more years of tenure reported average monthly attrition rates that were 247% lower than directors with less than two years of tenure.
As they say, employees leave managers, not companies, and taking the time to properly invest in leadership ultimately benefits the bottom line.
3. Lack of growth and advancement opportunities is a reason for attrition
When companies do not offer advancement and developmental opportunities for capable and ambitious workers, they end up losing talented employees and retaining poor performers (also known as the “dark side” of retention). Offering upward professional mobility is one method to help motivate some high-performing employees to stick around longer.
4. Inaccurate job profiles contribute to job turnover
Job descriptions identify the skills necessary for a position, as well as what kind of environment candidates should expect. If an employer has not taken the time to construct a hiring profile that truthfully outlines the details of the job, they run the risk of disappointing qualified candidates by not delivering on their promises, or hiring candidates who do not have the proper skillset to be successful in the position. These actions or lack of actions create an attrition problem.
Given the high cost of staff turnover, honesty really does pay off for the job candidate and the organization. The best way to avoid these types of situations is to be honest with the information included in the description for the position, such as the shift the employees will be working, what advancement opportunities will be available and when, and how much flexibility employees will have.
Attrition isn't an entirely unavoidable problem, but it can be addressed as early as the hiring process. First calculate the attrition rate so management fully understands the staff turnover issue being addressed. Then develop a well-rounded and data-driven hiring procedure to target job candidates who possess the qualities necessary to perform well.
Topics: Reducing Attrition