Studies have concluded that a negative, causal relationship exists between employee satisfaction and employee turnover, and conventional wisdom insists it is true—improving employee satisfaction appears to be instrumental in decreasing employee turnover.

But, how do you determine what employees want in order to be satisfied? The same way you find out about what customers want. You ask—through an employee survey.

An employee survey is not a one-shot event eliciting general feedback. It is not a report that sits on managers’ shelves making them feel good that at least they asked. Employees will stop taking surveys if they know nothing will come of their feedback. They will know it is an exercise in futility. Sure, a report might be generated, but if the survey didn’t spur any action plans or an interactive, ongoing dialogue between managers and employees, the agents will be rightfully frustrated.

If conducted correctly, surveys can have tremendous impact on turnover. One financial services company began the survey process with an annual turnover of 55 percent. Instead of the “usual” survey, this company decided to implement a new “business focused” survey that would allow them to develop specific action plans to address key business issues. The key questions involved issues over which a manager had some control. Managers designed the questions to reflect drivers of agent satisfaction, engagement, and retention (e.g., “How likely are you to leave the company?”. Once the agents answered the survey, managers determined which items in the survey most highly correlated with turnover and focused on these first. The company engaged the agents to help design the solutions – ensuring the “voice of the employee” could be heard in the solution. The following year, the turnover rate dropped to 22 percent and then to 14 percent after a second survey.

One caveat for those of you looking for fast wins—it may take longer than the annual survey cycle to see the effect of some process changes. For example, if a new hire training process needs to be implemented or frontline supervisor training requires update and deployment, the actions may take longer than a year to complete.

If improvements cannot be made overnight, managers should communicate with both the agents and upper management to let them know the center is moving forward. A subsequent survey score could lag behind, causing management and employees to question the effectiveness of the action plans. Rely on your expertise to defend your plans and respond with patience and tenacity to drive the change forward.

Have you heard the buzz about incorporating brand messaging in all of your employee communications (orientation, training, team meetings, general memos and communications)? Many of the companies I work with as a consultant are certainly focusing on this more and more.

The theory is that employee retention and productivity improve as employees experience greater job satisfaction and motivation. This comes from an increased sense of purpose and loyalty (the employees understand what the company is trying to achieve for its customers and they commit to making it happen). A survey performed by Deloitte & Touche discovered that one third of the CEOs surveyed felt that the company vision was the primary reason employees stayed with the companies.

Of course, improved retention is not the only reason to focus on internal branding. Business2.com studied U.S. companies and found that every one point increase in brand equity yielded approximately one percent increase in stock return.

No one is better able to reinforce or negate your brand to your customers than your customer contact employees. They interact with more customers than all other department personnel combined. Every company wants their customer contact personnel to act in accordance with the brand, but few have internal brand marketing as a strategic objective.

I heartily recommend considering any strategy that can both decrease turnover and increase company value.

I know many companies that don’t perform exit interviews. Managers have said to me, “Once they leave, who cares? Most employees don’t offer insightful comments during exit interviews anyway. Our HR manager keeps telling us that it is a waste of time.” One study found that only 46 percent of organizations conduct exit interviews. What’s wrong with this picture?

The first thing wrong could be the person conducting the interview. Think about it. Would you be honest in an exit interview if it were being conducted by someone in the very company you are leaving? I guess if you were angry in the heat of the moment you might. But most of us would keep our mouths shut. Employees fear burning bridges or receiving bad references. There’s no benefit to an employee for “spilling the beans.”

Exit interviews should be conducted by a third party—someone the departing employee can trust while anonymously providing thorough and honest feedback.

Managers should publicize lessons learned and actions taken as a result of exit interviews. Word gets around (remember, the person leaving probably still has friends in your organization and they probably still talk). If the departing employee communicates what he said in the exit interview and word gets around that nothing was ever done to acknowledge or change it, then most employees would realize there is no reason to elongate the exit interview process by talking.

We don’t have to question the role of the front-line leader in employee retention and engagement. There’s been a ton of research confirming it. To illustrate:

1. Employees will stay if they have a good relationship and open communication with their immediate boss. (HRI Institute, 2001)
2. Employees typically see the organization as they see their supervisor. (Tross & Egermann, 2005)
3. As the job market improves and people find more employment alternatives, leaders will need to put more effort into retaining talent. (Gantz Wiley Research, 2004)
4. The front-line leader is of critical importance in building engagement. (Gopal, 2004)
5. The root of employee disengagement is poor management. (Gopal, 2003)
6. Employees need bosses who care about them, and will help them achieve their goals. (Human Resource Institute, 2004)
7. Much of engagement work must be done by first-line supervisors. (Bates, 2004)
8. Employees who believe that the supervisor values their contributions and cares about their well-being believe that the organization on the whole supports them more, which in turn relates to decreased turnover. (Eisenberger et al., 2001)

I have often said that the first-level manager is the weakest link in the call center today. We are notorious for taking our best agents and promoting them with little or no management training. We throw them into the daily “running around with your hair on fire” call center operation and ask them to perform heroically. We ask them to balance oft competing objectives and seldom give them the time or know-how to perform well. We hire them to manage people, yet they spend the greatest amount of time managing tasks. Then we wonder, “Why are employees disgruntled and leaving?” The buck stops not with the front-line managers, but with call center leadership.

1. Human Resource Institute (2001). “Loyalty and Commitment: A survey on Attracting and Retaining Workers.”
2. Tross, S. & Egermann, M. (2004) “Employee-Manager Relationship Duration: Effects on Perceived Supervisor Career Development Support & Voluntary Turnover.” Society for Industrial and Organizational Psychology Annual Conference, April.
3. Gantz Wiley Research (2004), “WorkTrends 2004.”
4. Gopal. A. (2004). “Flawed Assumptions Can Defeat Your Business,” Gallup Management Journal, April 8.
5. Gopal, A. (2003), “Disengaged Employees Cost Singapore $4.9 billion,” Gallup Management Journal, October 9.
6. Human Resource Institute (2004). “Reengaging the Workforce,” TrendWatcher, Issue 211, May 7.
7. Bates, S. (2004). “Getting Engaged.” HR Magazine, 49(2).
8. Eisenberger, R., Armeli, S., Rexwinkel, B., Lynch, P.D., & Rhoades, L. (2001). Reciprocation of perceived organizational support. Journal of Applied Psychology, 86. 42-51.

When Response Design and the APQC partnered to study the customer-centric organization, we discovered an amazing correlation: as contact centers increase active, internal marketing programs to communicate the value of contact centers throughout the organization, they experienced a commensurate decrease in negative annual agent turnover. (Negative turnover is when an agent leaves the organization - no matter what the reason. Positive turnover is when an agent leaves their position for another position within the organization - promotion or lateral move.)

These high performing companies actively engage in marketing the contact center to the rest of the organization. My guess is that the process causes agents take increased pride in their work and the pride translates to loyalty. Hence turnover is decreased. What an “easy” and relatively inexpensive way to improve retention!

During the following blogs, we will discuss some often unknown or overlooked elements of employee turnover. Let us begin with “employee engagement.”

Engagement occurs when employees: (1) are fully present and physically committed, (2) are emotionally energized by forming meaningful connections to customers and colleagues, (3) believe their work has value, and (4) are cognitively focused on their task and their role in the work environment.

Engagement has been linked to customer satisfaction, employee retention, organizational productivity, and bottom line organizational profitability. Need any additional reasons to be concerned about how engaged your employees are?

According to a Gallup study, 26 percent of the U.S. working population is engaged (loyal and productive), 55 percent are not engaged (just putting in time), and 19 percent are actively disengaged (unhappy and spreading their discontent). Based on these figures, Career Systems International estimates that each employer is wasting approximately 10 percent of his or her payroll dollars on lost productivity due to that level of disengagement.

So, your employees may not be fully engaged in the work they do. While you may have seats in the chair, there may be no heart in the work.

You can easily spot the disengaged employee. This is the agent who makes little effort to identify or meet customer needs…the sales agent who volunteers no product substitute for “out of inventory” requests, the customer service rep who too quickly transfers to a special group when he could have easily handled the request, the night agent who tells customers to call back the next day even though she has been fully trained to open an account.

If this describes some of your agents, take heart. There are ways to foster engagement.

A company’s culture contributes greatly to engagement. Research shows that employee engagement is greatly enhanced when employees clearly understand the link between organizationally desired behaviors and rewards. Employee focus and customer focus are complementary. When employees recognize that the organization is focused on their well being, they in turn are more engaged and strive to meet the organization’s goals.

Affiliation with, and support from, team members also contributes to engagement. Research shows that increased cohesion between team members leads to greater commitment, motivation, engagement, and performance.

The orientation of new employees is a vital step towards improving employee engagement. Effective onboarding ensures that the employees are prepared for their jobs by facilitating their interaction with colleagues and making sure they know what is expected of them.

Finally, research indicates that challenging work promotes engagement. Challenging work must be supported by a clear job role description, clear performance expectations, plenty of feedback, and the opportunity to succeed (tools and development).

I know you are addressing many of these needs in your call center, but isn’t it nice to know that research supports your efforts?

It never fails. When you begin talking about employee issues (morale, retention, productivity, turnover, etc.), the topic of compensation is sure to come up. While money is not the cure-all, it can contribute to a reduction in turnover. A research study (Guthrie 2000) found:

1. As the use of skill- or knowledge-based pay systems is increased, turnover is decreased.
2. Extensive use of group-based incentive plans increases turnover rates. However, the negative effect of the group-based pay might be lessened if we distribute the group pay according to individual performance.
3. As the size of the group involved in group-incentive pay plans increases, so does turnover.

Whenever Response Design implements a performance management infrastructure in a call center, we find rewarding agents for improved performance is always a hot debate. While alternative pay structures won’t ever be the complete solution to reward and recognition, this research certainly gives good reason to include it!

Guthrie, James P., (2000) Alternative pay practices and employee turnover: An organization economics perspective, Group & Organization Management, Vol. 25, Iss.4; page 419, 21 pages

Are both employees and managers “on the same page” when they discuss employee retention? Some studies say, “Yes, the two groups are closely correlated.” Others say, “No, employees and managers are not aligned in their views on the factors that retain workers.”

Find the truth for your organization. And why is this important? If you act on leadership myths or isolated reports and research, you might aggravate the problem rather than solve it.

One of the most common myths is that money will cure all employee dissatisfaction. To illustrate, several study reports state that more than 75 percent of the managers queried thought their employees left organizations because of money issues (i.e., better compensation elsewhere). Managers often state, “Of course our employees want more money. If we give them an increase in hourly wage, then we can surely satisfy them. Let’s increase their bonuses as well and then we don’t have to worry at all about losing them.”

While research shows that low compensation is an important dissatisfier, you really don’t know whether it is true in your organization until you look at your current compensation structure and ask your employees. Money may not satisfy your employees; but if it is lacking, they will certainly be dissatisfied. The extent to which you should focus on money will depend on your situation. Is your pay scale competitive? Has the job role of the employee changed without commensurate change in compensation? If yes, then it is likely that you have an issue to correct.

If you intend to reward with cash, keep this in mind. According to the American Productivity & Quality Center in Houston and the American Compensation Association, it generally takes five to eight percent of an employee’s salary to change behavior. (If your reward isn’t cash, then budget about four percent.)

There is certainly no lack of advice on how to decrease employee turnover. However, implementing solutions without careful customization can be just as costly as the turnover itself. Most managers will tell you that they “know” what to do about employee turnover but, because of the wealth of retention strategies, they are less confident about knowing which strategy is right for their organization.

This caution is warranted. Any employee turnover strategy should be carefully considered before implementation. To determine if a strategy is right for you ask:
1. Is the strategy feasible within my particular organizational setting (e.g., does it align with your culture and values)?
2. Is there an adequate return on investment (ROI)? That is, when you project the savings on turnover and subtract the cost of implementing the solution, is there adequate ROI to convince leadership to proceed?
3. Will the specific strategy be effective in reducing the specific reason for turnover or negating the specific consequences of turnover (i.e., have you aligned the solution to the problem or are you using a “hopeful” shotgun approach)?

As I have said before, the most important place to start is understanding your turnover – the reasons for it, the negative consequences of it, and what it is costing your organization. Based on that knowledge your team can take a list of possible strategies and assess their feasibility. Because your turnover situation is unique, your solution must be unique as well.

In my research I found a lot of opinions, many case studies, a plethora of articles, and some significant research on ways to reduce employee turnover. If you want to confirm the volume of information, access the Internet and search “employee turnover.”

We know not every strategy is right for everyone and I was concerned about including strategies that weren’t backed up by valid research. Although I am a proponent of business practices being theoretically grounded, I feel, at this juncture, we could lose valuable options that could help us with our unique situation.

The following is a “top 50” list of options that you have—these are “possibilities.” Brainstorm with your leadership team to whittle down this long list into a short, prioritized, “right for me” list.

1. Include the appropriate skills and competencies in the job description
2. Use behavioral-based interviews to ensure candidates possess the attitudes, personality traits, and behaviors that ensure fit and promote commitment
3. Create a compensation policy (including pay tied to performance and variable pay) that supports the mission and culture of the organization
4. Market the call center internally to the rest of the organization
5. Implement career planning and development efforts that are tied to the organization’s business objectives
6. Base promotions on performance
7. Demonstrate commitment to the employee’s long-term development (job skills training and retraining - learning new skills for the present job and for redeployment); help employees take advantage of learning opportunities
8. Ensure that managers are skilled and effective coaches and facilitators
9. Implement training designed to change the myths of diversity; educate participants about the realities of diversity; and offer ways to respond to the challenges of valuing and managing diversity
10. Offer flexible schedule adjustments showing respect for an employee trying to balance work, career, education, and community (job sharing, flex time, telecommuting, full time to part time and back again)—and do it all without jeopardizing advancement opportunities
11. Conduct confidential exit interviews, and analyze and use the data collected in the interviews
12. Provide a work environment that is productive and respectful, with a feeling of inclusiveness; offer a friendly, appealing, welcoming setting
13. Provide challenging and creative work; design work that requires the use of multiple talents
14. Continually communicate the company mission, vision, and brand to employees; demonstrate how they contribute to each
15. Enhance employee engagement through team cohesion activities
16. Update your employee orientation to accurately reflect your expectations
17. Ensure that comprehensive change management is in place; include employees in change; eliminate abrupt changes
18. Provide tuition reimbursement
19. Provide competitive vacation and holiday benefits
20. Provide competitive pay
21. Provide holiday pay and / or bonuses
22. Improve your employee selection process
23. Customize an innovative reward program for functions and individuals
24. Evaluate the companies designated as “Great Places to Work.” These companies consistently experience a turnover rate that is half the national average; become an employer of choice.
25. Build increased commitment through fairness, care, and concern for employees
26. Provide an overall benefits package (health and dental insurance, stock options)
27. Train leaders in retention / engagement leadership competencies; hold leaders accountable for retention and engagement, using metrics to document impact of leaders
28. Collect input from team members regarding what it takes to retain and engage employees
29. Provide mentoring programs
30. Use technology to enable virtual teams and to make work more fun
31. Celebrate service anniversaries
32. Provide a 401K savings plan
33. Provide day care services
34. Provide sick pay
35. Distribute a company newsletter
36. Select an employee of the month
37. Allow employees to engage in community service
38. Match gifts to charities
39. Provide free / reserved parking
40. Establish recreational leagues
41. Open a company store
42. Provide exercise facilities
43. Provide a subsidized cafeteria
44. Provide a direct pay deposit option
45. Have holiday parties
46. Provide jury duty pay
47. Open a credit union
48. Hold a company picnic
49. Announce casual dress days
50. Create a process for internal job postings

We established in a previous blog entry that managers need to focus resources on managing the negative consequences of turnover.

As you calculate your cost of turnover, document the negative consequences you are experiencing in your organization. Perhaps your organizational objectives are in jeopardy or the “brain drain” is negatively affecting first contact resolution. You might be seeing a decrease in the quality of your service. Whatever the case, it is important to identify the consequences and design practical solutions for managing them.

In a 1984 article, Richard Mowday provides extensive practical advice on how companies can manage these consequences. His suggestions include hiring excess employees, utilizing part-time and captive labor pools, training current employees, changing work rules, increasing commitment in those who stay, automating, redesigning jobs, and performing continuous and long-term recruiting.

There isn’t a “one size fits all” solution. Call center teams must document the consequences they are experiencing and then brainstorm viable (i.e., possible and cost-effective) solutions. Let’s take a couple of examples and figure out how they might apply to the call center.

Consequence - Operational disruption: Contact center managers understand that one of the most serious consequences of high turnover is the inability to meet the customer experience goals. These day-to-day activities include meeting customer-dictated service levels and achieving first contact resolution.

Possible strategies: If turnover is causing these negative consequences, then the management team might want to consider expanding training and development programs. Current agents can improve their efficiency (and handle more customer contacts without compromising quality), new agents can be brought up to speed faster, and people can be cross-trained to allow greater flexibility in scheduling. The team could also look into part-time workers who can be scheduled on an “as needed” basis.

Consequence - Strategic opportunity costs: Many times when employees leave, a company loses valuable capacity to grow. Departing agents may have been the most skilled at converting a sale. Perhaps they were particularly knowledgeable concerning a certain customer segment or account. What if you lose the agent to whom all other agents refer their disgruntled customers?

Possible strategies: Again, training and development is a possible solution. Also, depending on the value of the lost opportunity, a company should consider hiring excess employees who are ready to join the team as the projected turnover decreases the ranks of qualified personnel.

Begin by analyzing your turnover. What is causing it? What consequences are you experiencing? Remember treatment without diagnosis is malpractice.

Secondly, address how you are going to reduce the turnover or negate the consequences. Brainstorm with your team. But remember, not all strategies are right for you. You may be asking, “What have others done to combat turnover?” or “How do I know the strategies that are right for my organization? Stay tuned – I’m tackling those topics soon.

Mowday, Richard T. Strategies for Adapting to High Rates of Employee Turnover. Human Resource Management. 1984; 23, 4; page 365.

The negative consequences of turnover are at least as costly as “employee replacement” expenses. If you are experiencing turnover, then it is probable that you are experiencing one or more of these negative consequences. Be sure to consider these when calculating the cost of losing employees.

Consider the cost of:

1. Operation lost productivity. The work a person is leaving must be covered. Someone else’s work may suffer because a co-worker is gone; deadlines (or service level) may be missed. Peer “discussion” about the vacancy may consume valuable time.
2. Supervisor lost productivity. Supervisors spend more time managing new employees (observation, feedback, etc.); therefore, they experience a decrease in their productive time.
3. New hire decreased productivity. Consider the amount of time it will take the new hire to reach the productivity level of the exiting employee. What is the cost of that lost productivity?
4. Lost customers. Losing valued customer service or sales employees can lead to decreased customer satisfaction and loyalty. Is it possible that employees might take customers with them? Will you find it necessary to take special precautions to keep customers that regularly dealt with the departing employee? Do you track this?
5. Lost sales. How many sales do you miss or lose because you have lost talented workers? What is the value of the missed opportunities?
6. Lost knowledge. Did the employee take valuable learnings with him? The contact center environment is conducive to tacit knowledge walking out the door.
7. Decreased customer service. Customer service can deteriorate when employees leave. What does this cost you?
8. Decreased employee morale. Morale can take a negative hit when good people leave. What does this cost you?
9. Lost profitability. Can you measure the cost of lost profitability for your department or the organization overall?
10. Increased mistakes. Can you quantify the cost of mistakes the new employee makes?
11. Project degradation. Was the departing employee involved in any projects that will now suffer? If so, what is that cost?

In my next blog, I’ll discuss how to approach managing these negative consequences.

What does it cost you every time you lose a valued employee? Have you considered all the factors (hard dollars, soft dollars, direct costs, indirect costs) you should include? If you haven’t, then it will be very difficult to assess which retention strategies will be profitable for you.

Following is a list of costs you may want to include in your calculation. Some of the items may not apply to your situation; you may not be able to define others. The goal is to realistically define your costs. If you don’t, you’ll never be able to plan a cost-effective solution.

The expenses associated with having to replace an employee may include:

1.The exit interview. Include the time of both the interviewer and interviewee. If a neutral third party conducts an exit interview (a practice that we recommend) consider the additional expense of hiring an impartial contractor.
2.Administrative costs associated with the person leaving; you’ll need to stop payroll and benefits, complete forms, etc.
3. Administrative costs to bring on a new person—adding to payroll, establishing and securing passwords, issuing ID cards, assigning e-mail accounts, etc.
4. The severance or continued benefits to the employee.
5. Costs associated with filling the vacant position temporarily, or the cost due to existing employees filling the void.
6. Employment advertising. Finding the right avenue can be tricky because most “Generation Xers” and “Yers” don’t read traditional paper-based newspapers; companies have to find new sources to attract employees.
7. Hiring costs (including call center management and HR). Include time to review and explain job requirements, review backgrounds, conduct interviews, discuss the assessments with others and select a finalist.
8. Internal posting. Calculate not only the cost of the internal recruiter, but also the time that the applicant is away from his or her job.
9. Drug screens, background checks, and reference checks. Calculate the cost per applicant and how many applicants are involved. Many companies screen the final three or four applicants.
10. Pre-employment testing to assess skills, abilities, aptitude, attitude, values and behavior.
11. Travel and/or relocation.
12. Orientation costs, including the time of the participant, the leader, and the materials.
13. Training costs including the development and delivery costs plus the salary of the new employee and trainer. Don’t forget the cost of the training materials—manuals, equipment, and technology such as computers.

The losses add up. Companies estimate that the loss of one customer service employee ranges from $10,000 to $20,000 on the low side to $50,000 to $75,000 on the high side. The loss is even greater for sales people (probably because it is easier to calculate a hard-dollar revenue loss). The estimated loss of a sales person ranges from $20,000 to more than $100,000 in lost revenue alone for a well-established account manager or broker.

Because contact center employee turnover is high and the costs of turnover continues to escalate, it behooves us to periodically re-evaluate the cost of this loss and make appropriate course corrections. However, don’t try to take your turnover to zero. Remember from a previous blog that not all turnover should be eliminated.

In my next blog, I’ll add to the list by accounting for the negative consequences that occur in the operation when someone leaves. In the meantime, you might want to start gathering your data.

When considering how to approach turnover, I have this bit of advice: Control the aspects of turnover that you can, and manage the effects of the circumstances that you can’t change.

Sometimes managers are so focused on reducing turnover that they never consider the possibility that some turnover is outside their control. The turnover might be too costly to control, or perhaps the reasons employees leave are outside their control. I like to term this uncontrollable turnover as “fact of life” turnover.

Ask two questions to assess “fact of life” turnover:
1. Can I control the reasons people are leaving?
2. How much am I going to have to spend to control turnover?

Controlling the reasons people are leaving
Can you control the reasons people are leaving? Be careful here. Some “uncontrollable reasons” may in fact be “controllable.” Let’s say an employee is leaving because of a change in his or her family situation (e.g., new baby). While some organizations consider this reason uncontrollable, other companies build incentives to return (e.g., flexible hours, return bonus, day care, etc.). If the reason is truly uncontrollable, then it is important to begin to manage the negative consequences of turnover. However, if the reason is controllable then you can design a cost-effective plan to correct it.

Spending to control turnover
Is the cost to control the turnover worth it? Calculate the cost to lose an employee. Then, calculate the cost of the strategy to retain him or her. If the cost to lose the employee(s) is less then the cost to retain them, then it may not be worth investing in that particular retention strategy. If this is the case, then management of the consequences of turnover is imperative.

Therefore, if you have “fact of life” turnover, don’t ignore it. Look at it as an opportunity to proactively manage its potential negative consequences. In future blogs, I’ll talk more about measuring the costs and managing the consequences of turnover.

Do you believe that employee retention rates should always increase? I don’t necessarily believe that they should. At times, turnover is OK.

Voluntary turnover can be a blessing when a company is downsizing, when seasonal work has ended, or when a new corporate strategy is being pursued. If a company is overstaffed, voluntary turnover can be encouraged, for example, through incentives.

Voluntary turnover helps eliminate the disruption caused by layoffs or terminations. In a slow economic time, companies may want more rather than less voluntary turnover.

Voluntary turnover of poor performers indicates that leadership is doing its job and that human resource practices are effective. This poor performer turnover is mutually beneficial. These employees improve their self esteem and job satisfaction when they find a job with a better skill match. And, as a result of the poor performers moving on, the organization becomes more effective.

When is voluntary turnover desirable? If you aren’t categorizing the reasons for turnover, then you may be wasting valuable resources trying to reverse what should be celebrated!

I remember visiting a company a few years ago. The management team proudly proclaimed their turnover rate in the call center was close to zero. Now, when I hear something like that my ears perk up. Coming from an industry that has notoriously high turnover I start wondering, “How’d they do that?”

The next day I entered this company’s parking lot. As usual there were special parking spaces reserved for tenured employees. But there weren’t just a few spaces; the reserved spaces went on for three parking structure levels. Whew! Not only did this company essentially eliminate call center turnover, it also had an alarming number of seasoned employees. The average tenure with the company was 15 years. I had to get to the bottom of this miracle.

After digging, I found a logical reason—one that should not be duplicated elsewhere. The call center was the “dumping” ground for all the other departments in the company. If someone didn’t work out in sales, he or she was sent to the call center. Not good at your warehouse job? Well, there is a place for you in the call center. The company was holding fast to an “old employment deal.” It stated, “If you are loyal to us, we will be loyal to you and provide life-long employment.” Rarely was anyone terminated due to lack of performance. Employees were simply retired to the call center. This led to a new employee classification that one of my associates aptly named, “Retired without leaving.”

This may seem like an extreme case, but don’t dismiss it all together. Do you receive requests from other departments to “take” a human resource that just isn’t cutting it somewhere else? When was the last time you terminated someone for poor job performance (and not just attendance issues but poor quality and / or productivity performance)? While you may have high turnover, you can be glad it isn’t zero.

We often say that we want to “hold on to” or “keep” our good people. However, the phrases themselves may belie the truth about what we really think of our employees. “Holding on” is a picture of restraining physically and barricading the exits, and “keeping” is similarly negative. I believe these phrases illustrate our jaded “inside out” perspective about employee retention. Maybe we can begin using employee friendly terms to describe our desire for a continued business relationship with our employees?

This “inside out” approach hasn’t worked with customers, so why do we think it will work with employees? Aren’t employees our valued customers after all? In an attempt to improve customer retention, companies are migrating from an “inside out” to an “outside in” orientation. I’m betting we can improve employee retention by applying the lessons learned during this migration.

When companies start in an “inside out” mode, they develop their processes, policies, and procedures by defining what is best based on the company’s perspective of things. In this mode, the company talks about “holding on to” or “keeping customers.” Recent customer retention research has demonstrated that this “inside out” strategy is detrimental to the bottom line.

Companies are learning how to flip their thinking so they start designing strategies around the customer’s perspective. This “outside in” approach enhances customer satisfaction and retention. Once embraced, this approach helps companies create environments in which customers want to stay. Companies no longer “hold on to” or “keep customers.” Instead they build a partnership based on insight and trust.

In the same way we can enhance employee retention by looking through their eyes. By focusing “outside in,” we can stop “holding on to” employees and start creating environments in which employees want to stay and grow.

Recently, I was working with a company to build a performance management infrastructure for its call center agents. As we were designing the metrics, one of the team members mentioned that there is some “big brother” concern from the agents whenever management talks about “schedule adherence” or “agent utilization.” The employees can become fearful when they believe they are always being watched by an unseen force.

The recognition of employee concern led us to a discussion about how the names of metrics typically aren’t employee-centric. We communicate measures to the employees using attributes that are important from the company point of view, but not necessarily from the employee’s point of view. If I am an agent, hearing the term “agent utilization” may make me feel “used.” The names of measures should help agents understand how they are contributing to corporate objectives.

In the meeting, we discussed whether “a rose by any other name” would be less offensive. Our conclusion was that re-naming might seem like wrapping paper that only disguises the reality. However, agents will begin to understand the difference if the company’s motivation and message is clear and managers give the employees time to adjust.

So how could you better name a metric that is currently called “schedule adherence” or “calls per hour?” Because your organizations are unique, the answer is different for each of you. However, you can ask specific discovery questions. For example, how does a metric align to corporate objectives? How do you frame the metric from the employee’s point of view? Does “calls per hour” become “customers per hour?” Does “schedule adherence” become “attention to schedule?” Only you, with the help of your employees, can define those nuances.

Who is a valuable employee?

A valuable employee is one who can contribute to the goals of the organization and is a good fit for the job.

Most managers will tell you they don’t have trouble identifying a valuable employee. However, most managers incorrectly define “valuable.” They look only at the employee’s productivity, willingness to do whatever is asked, and potential for promotion. Managers may cast aside valuable employees because they question management policies and procedures; they may label these employees “difficult to work with” and chastised them for not being team players.

In one company, a manager asked a team leader to assume responsibility for his “12 troublemakers” so he could get them off his major account. When the employees began to report to her, much to her surprise, she found she was managing “a corral full of stallions,” excellent performers who needed boundaries and an opportunity to provide input on how things could be improved. The team leader knew the value of these employees and was able to capitalize on this talented group of individuals.

Objectively, every employee should be “valued,” but not every employee in every job is “valuable.” Some employees are working in the wrong place; they are simply not the right person for the job; they don't have the qualities, characteristics, and ability to contribute. However, they may be valuable elsewhere in the company. The fact that they are not "valuable" in this job does not mean I shouldn't respect or appreciate (value) them as a people.

Managers require maturity to understand the difference between "valued" and "valuable." They have difficulty assessing how valuable an employee is for many reasons. Some organizations have poor job definition, leaving managers to say, “How can I assess whether employees are a good fit if I don't know what I'm trying to fit them into?” Managers may have personality conflicts with some employees who “push their buttons;” they are never able to assess them fairly. Finally, some managers have poor management skills; if they do not have the skill of “assessing and coaching,” then they are unable to judge an employee’s fit for a job.

The manager who asked the team leader to take the 12 rebels didn't value the people, nor recognize that they could contribute (could be valuable) somewhere else in the organization. He failed because the job of a manager is not to label (i.e., “troublemakers”), but to help employees succeed.

“Teaming” between an employee and the company is an essential component of having a valuable employee. The company’s role is to identify a person who has the right attributes for the job (the company recruits, hires, orients, and trains well). And, the company has a job description that is well-understood by both parties. The employee’s role is to “step up to the plate” to learn, contribute to the objectives, and encourage others (i.e., be a team player). We need to see in a human being a desire to contribute. The employee is not always perfect, but we see characteristics and abilities that we admire; we are willing to team with him or her to get the job done. We, as managers, are constantly assessing and managing the fit.

Do you know who your valuable employees are? Are you teaming with them for success?

In the 1981 article “The Employee as Customer,” L.L. Berry states that, whether managing customers or employees, “the central purpose remains the same: the attraction of patronage through the satisfaction of needs and wants.” So whether we deal with customers or employees, the interaction is the same. It requires that we satisfy their needs and wants.

In the old days, a customer conflict could be settled by saying, “That’s our policy.” We told our customers that we treated all of them the same and that they had no recourse if they were unhappy. Customers don’t stand for that any more; they go to a competitor. How long will it be before all of our employees “wake up” to “consistent treatment” that fails to meet their needs? And, what will be their recourse? Most likely, they will find new employers.

Customers who are satisfied have higher repurchase intentions. Employees who are satisfied have higher intentions of staying with the organization, leading to reduced turnover.

We can no longer afford to view our frontline employee as a low-paid servant or a replaceable unit. We must transition to seeing them as customers. Employees are not only individuals who must listen to management, but also people to whom management must listen.

Is your organization willing to change its employee paradigm to view frontline employees as customers?

I came across the following quote from Henry Ford’s autobiography. He is describing the 7,000 specialized jobs required to manufacture a Model T:

“949 required strong, able-bodied and partially physically perfect men. 3338 needed men of merely ordinary physical strength, most of the rest could be performed by women or older children, and we found that 760 could be filled by legless men, 2627 by one-legged men, two by armless men, 715 by one-armed men and 10 by blind men.” (Ford, My Life and Work, 1923).

This quote epitomizes the industrial age’s penchant to employ parts of people. People were considered expendable and replaceable. The whole person (emotions, interpersonal issues, conflicting needs, family demands and obligations) was not considered. Employees were simply another cog in the great machinery.

While most companies would not describe their views of employees as “replaceable units,” often their actions speak volumes. For example, how many times have you heard, “Agents must check their life at the door; this is no place for personal business.” And how many call centers still don’t have a convenient way for parents to receive messages about problems involving their children?

In today’s turbulent workplace, a stable workforce had become a significant competitive advantage. We must view employees as valuable contributors whose opinions and perceptions are important sources of knowledge.

Those of us who work in the industry struggle to find the right people for our call centers. I can’t tell you how many times exasperated HR professionals tell me they are having a difficult (or impossible) time filling their next new-hire training classes, and that they are beginning to hire out of desperation. Potential candidates are so scarce, they say, that they feel like they are applying “the mirror test” to applicants (you know the one, hold a mirror up to a candidates nose and if there is condensation, he or she is qualified).

The bad news is that finding the right people will not be getting easier in the foreseeable future. We are entering an even greater talent and labor crisis. Let’s look at the causative factors.

Economy: The recent “down” economy encourages people to stay in their jobs for fear they will not be able to find other work. However, research indicates that when the job market improves, people are poised to leave. One researcher predicts that employee turnover will double as the economy recovers.

Job growth: As an economy recovers, the job market grows. Although layoffs continue in the U.S. job market, we are still adding millions of job each year.

Labor shortage: By 2008, the Bureau of Labor Statistics predicts a shortage of 10 million workers (U.S. Department of Labor, Bureau of Labor Statistics 2003). The number of available workers in the U.S. diminished during the last 20 years, and the big baby boomer generation is about to retire. The projected availability of “replacement workers” is too small to fill the gap.

Talent shortage: Employee retention / turnover isn’t just about headcount. It’s about getting the right people in the right job—and retaining them. Talented people are most companies’ competitive advantage. In the future, the competition for talented workers will magnify the effects of the labor shortage; there won’t be enough talented workers to fill the right slots.

Our job as managers of talented labor is to develop strategies that lessen the impact of these factors on our organization. Researchers say these projections are all but inevitable. Consider yourself forewarned—now let’s get forearmed.

Guess what would be the best action you could take to satisfy your contact center employees. Pay more money? Provide better working conditions? Foster better relationships between management and employees? Establish career paths?

Congratulations – you are correct!

What? How can I say that when I have no idea how you answered? Truth is, no matter what you said, I can find some article or research that validates your choice. If you have a pet project designed to satisfy your employees, you’re in luck. I can definitely find you “research” that backs your position.

Finding the research that supports most any initiative is easy, but actually satisfying your employees is difficult. They may have their own ideas about what satisfies them. You have a myriad of opinions and should realize there is no “silver bullet” solution. Use the opinions and internal and external research to “customize” the solution for your situation.

Internal research means “ask the employees.” For external research, rely on me for some of the answers. I have found so much information, and a lot of it seemed contradictory until I examine the methodology and intent of the studies. The next series of blogs is a study of the studies of employee satisfaction.

You enter the contact center on Monday morning after a restful weekend and all seems right with the world. You begin your day by reviewing the weekend performance statistics. “Not bad,” you say. “Revenue is up. Average hold time is down.” You clear your phone messages—nothing pressing here. There’s no one at your door declaring the sky is falling. You had cleared your “in” box over the weekend; those reports due this week are finished. You take a deep breathe and enjoy a fresh start to the week.

After your computer boots, you check your e-mail. It is here that the day begins to go wrong. Six of your top performers have been recruited by the new call center opening across town. You stare at the screen trying to comprehend the loss to the center. Then, you think about what you can do to stem the tide of defection.

It’s probably already too late to take action. Employees don’t leave on a whim and usually can’t be wooed back easily. Any plan you put together now won’t reverse what has already happened; however, you may be able to change what could become a trend.

Our studies show that a call center with 100 frontline agents can expect to lose 26 percent annually, and a large percentage of the loss is in voluntary termination—the agent leaves for another opportunity. We also know that the average cost per hire is close to $4,000 and the cost to train a single agent is approximately $4,800. In a latter blog entry, I intend to cover the cost of turnover in exquisite detail.

Simply reacting to employee loss is no longer an option. When it comes to stemming the tide, we all need to be proactive. Rather than searching for the “one size fits all” solution, we need to be smart about:
1. market and economic conditions that influence employee turnover;
2. the uniqueness of our turnover (causes, consequences, and cost); and
3. strategies to reduce turnover that work in our situations.

These are some of the issues I’ll be addressing in future entries. You'll be as amazed as I am about the options that we have to turn the tide of employee defection.