What is Your Cost of Turnover? (and why you should know it) Do you know what your true cost of turnover is? When I ask this question to groups of call center managers, few raise their hands. Yet it is important to know how much it costs to recruit, on-board and train agents for two main economic reasons:
a) turnover often has a major negative impact on the center’s costs;
b) knowing your cost of turnover can help you get approval for upgrades you need to make in the areas of recruiting, hiring, agent satisfaction, agent dashboards, etc.
Costs you should include in your calculation are:
– Advertising in all the various media you utilize
– Initial screening for candidates, including the people who review submissions, the technology used to test applicants’ skills and aptitude, and the costs of telephone interviews to determine their phone presence
– Final selection processes, including scheduling and conducting in-person interviews, realistic job previews, background and reference checks, etc.
– Training costs, including salary and benefits paid to new hires during training, allocated trainer costs, costs of training facilities and technology, as well as costs of on-demand training programs.
– Transition or “nesting”, including expert help needed during this phase
– You can also estimate a cost for getting to full competence, which often takes a year or more.Some of these are hard, variable costs, while others are semi-fixed costs that take a bit more thought to quantify. Certain positions may also require added costs, such as paid preparation time for employees who must pass licensing exams in the insurance or brokerage sector.When added together, these costs often total more than $5,000 per employee lost.
Recall that these do not include “soft” costs, such as the loss of institutional knowledge, negative impact on productivity and morale of high turnover, and impact on caller satisfaction from dealing with less experienced agents.Every manager should know his or her cost of turnover, and then put that knowledge to work computing ROIs on intelligent outlays for things that will secure and retain the best agents, such as improved screening tools and procedures, increased training, better knowledge management systems, agent performance dashboards, etc.
Remember, you count on your people. You should be able to count the costs that result when they leave.
Thanks for reading 😉