Research indicates that replacing a single member of a call center team could cost businesses up to $10,000. If you add in all the possible consequences, like decreased team productivity and customer satisfaction, that number could be significantly higher.
What’s more, a diminished workforce is also a weakened one. Constantly replacing staff members can be very costly, with all the expenses involved in recruitment, training, onboarding, and other indirect costs. High turnovers present an outsourcing challenge that business leaders must address: Improving outsourced staff retention.
With the outsourcing industry experiencing higher-than-average turnover rates, organizations must fully understand the financial implications of retention on their outsourcing partnerships.
This blog will discuss the agent retention crisis, its causes, and the direct and indirect costs it may incur for your business.
Understanding the Agent Retention Crisis in BPO
In the BPO context, attrition rate refers to the recorded instances in which outsourced staff leave a company in a specific period, regardless of whether it’s voluntary or not. Some of the most prominent factors that contribute to its growth within the outsourcing industry include the following:
- Poor workplace management or organizational culture
- Severe burnout and a lack of work-life balance
- Poor training and career development opportunities
- Low job security
Similarly, an agent turnover rate indicates instances where agents leave, voluntarily or not, and are replaced by newly hired ones. It measures the frequency of organizational changes within a BPO company.
The higher the attrition and turnover, the more challenging it is to maintain customer satisfaction, operational efficiency, and, most evidently, financial performance.
The direct recruitment and onboarding costs are already high enough. Hiring expenses can cost businesses as much as $4,700, covering the whole process, from job postings to candidate interviews and other recruitment efforts. The average cost could be much higher for leadership roles or ones that require a more complex skillset.
Warning Signs Your Current BPO Partner Has a Retention Problem
Simply put, high agent turnovers are not just your BPO partner’s problem. It can bring more issues to your business if not addressed properly. But how can you tell if your BPO partner has trouble keeping the best talent around?
Here are some red flags that there might be a severe retention crisis at your current BPO provider:
Disengaged Workforce
When employees don’t show up as much as they used to during team activities and even in their daily work tasks, it might signal a decreasing engagement within your outsourced team. Look at relevant metrics like absenteeism rates, employee satisfaction rates, or productivity rates.
Poor Quality of Work
Occupational and personal stress are key factors affecting agent turnover. Recurring service quality and delivery issues are telltale signs that agents don’t feel fulfilled in the environment your BPO partner provides. Look for their average handle times, call abandonment rates, or customer satisfaction metrics.
If you do decide to switch BPO partners based on these criteria, it’s still important for you to justify your transition between BPOs with a cost-benefit analysis. Some key factors to consider during the transition process include initial transition costs, ongoing outsourcing costs, and your expected cost savings.
The 4 Hidden Cost Implications of High Agent Turnover
High turnover rates mean more than exhausting more resources in recruiting, training, and onboarding your outsourced team. Have you experienced significant service delays with your current BPO partner due to frequent staffing transitions?
We listed three ways a high agent turnover rate affects your business more than meets the eye.
1. Poor Service Quality
When agents leave your team, so does their productivity and service. Sure, you can look for new additions to the team, but even that could take some time.
New hires may take a significant amount of time to adjust fully to their new environment. They may need more time to learn specific skills or meet the same accuracy or speed as more experienced team members. Their learning period could also affect wait times and resolutions, which could make your customers’ experience unpleasant.
2. Loss of Industry Knowledge and Expertise
New hires don’t reach full productivity right from the get-go. Yet customer interactions remain demanding and unpredictable. Even with the proper initial training and onboarding, rookie agents may still lack their predecessors’ in-depth product knowledge and skills.
Unfortunately, these skill and knowledge gaps could also mean further operational disruptions, impacting overall customer satisfaction.
3. Increased Workload Fatigue
Say you still have experienced people on your team, but what about the pending tasks left behind by those who left? A high turnover creates additional pressure and workload for your remaining outsourced staff.
With increased deliverables and fewer people to handle critical tasks, it’s only a matter of time before it leads to more service disruptions. Additionally, increasing work requirements and pressure can overwhelm even the most efficient team members. When your team members grow dissatisfied with their work, they become unproductive. Decreased agent productivity and job satisfaction could lead to further retention.
4. Low Team Morale
As agent turnover becomes more frequent, agents can grow uneasy and fearful of their job stability. This uncertainty can lower team morale, affecting relationships, collaboration, and productivity. A negative workplace culture where staff feel undervalued and easily discarded negatively disrupts your bottom line.
Ultimately, these indirect costs lead to lost productivity, increased overtime, temporary staffing measures, and strained customer relationships, which could also spell further financial loss for your business.
Expert Agent Retention Strategy in the BPO Space
Increasing agent turnover remains a present problem in the outsourcing industry. But with the proper practices, it’s solvable. With the BPO industry experiencing a global average turnover rate reaching as high as 40%, ClearSource hones in on its people-centric initiatives. Our systematic agent retention framework has helped us maintain a 2% attrition rate.
Our experience shows the value people bring in delivering consistent solutions for clients in different business sectors. We believe the foundation of a meaningful customer relationship lies within the teams operating on the frontlines. We invest in call center best practices to keep them engaged, energized, and empowered to grow and consistently deliver on our promise of creating exceptional experiences for every customer.
Through these initiatives, our people become more committed and fulfilled in their purpose. While the industry’s average agent tenure only lasts 8 months, ClearSource agents average 18 months of tenure.
Learn more about ClearSource’s efforts in addressing the outsourcing industry’s retention problem. Take an in-depth look at our comprehensive agent retention strategies in this comprehensive guide for call center optimization!
Interested in partnering with us? Book a call with our team today!
