Analysis of Call Center Agent Turnover

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1 Analysis of Call Center Agent Turnover 1 ANALYSIS OF CALL CENTER AGENT TURNOVER

2 BACKGROUND Founded in 1988, Affiliated Computer Services/Business Process Solutions (ACS/BPS) is today a global leader in business process and information technology services. Driven by a customercentric mission, this $6.2 billion, Fortune 500 Company employs 70,000 professionals who serve multinational corporations and government agencies in more than 100 countries in 750 locations. Approximately 12,000 of the company's employees work in 37 call center environments. Close to 700 supervisors and managers are responsible for these employees and the call center operation. Retaining call center agents has become a key strategic issue within ACS/BPS. At the time ACS/BPS contracted to conduct this study, the average annual turnover rate for call center agents was 160 percent. Addressing and reducing the turnover issue created the opportunity for ACS/BPS to create a high potential market differentiation factor. Vestrics was retained to study ACS/BPS's turnover rate and assist the company in finding ways to reduce agent turnover. GOAL OF LEARNING INITIATIVES External literature, internal organizational surveys, and observational evidence showed that agent turnover was impacted by the effectiveness of the first line supervisor. ACS/BPS offers various training programs for first line supervisors and has recently utilized a test incentive program for supervisors in an effort to reduce high agent turnover rates. RESEARCH DESIGN This analysis measured the business impact of five different learning programs and evaluated the optimization factors that ACS/BPS believed were related to the Key Performance Indicator (KPI) of agent retention. Data utilized in this study was from May 2006 through May 2008, covering 55,000 records for the 23 largest call center locations. The data was comprised of: KPI - how was retention/turnover impacted? Interventions - what was done to improve retention? Demographics - what other factors influenced the outcome? Five key learning interventions were tested in this study: 1. Does supervisor training improve agent retention? 2. Does the Campaign to Retain improve agent retention? 3. Does the Activity-Based Compensation (ABC) improve agent retention? 4. Does the increased base wage or incentive package for agents improve retention? 5. How does changing the supervisor for the agent improve agent retention? 2 ANALYSIS OF CALL CENTER AGENT TURNOVER

3 RESEARCH MODEL RESEARCH METHODOLOGY Vestrics collaborated with ACS/BPS on a step-by-step process to identify, understand, collect, and analyze project data. The project team worked with ACS/BPS staff in a discovery process that established objectives, identified stakeholders, defined the KPIs, and identified customer classification information. This process applied best practices in statistical research and the experienced judgment of analysts. Beginning with a few simple models to identify the main effect of any factors on retention, more complex models were added until statistical significance (if any) was determined. The interaction between the five learning interventions and nine demographic factors considered for optimization were evaluated for their impact on retention. The ideal model was precise and explained the greatest variation with the least number of variables. Control groups were utilized as a means of comparing those trained and those not trained. Retention can be described in many different ways. For this study, retention was defined as follows: 1. Overall retention 2. Retention within the 90-day new hire window 3. Retention as it relates to "top-grading" (filtering out losses due to poor performance, while attempting to retain top performers) During the study period, analysis of 52,466 records indicated that 77 percent of agents terminated, 27.3 percent terminated within 30 days, and 31.6 percent terminated between 31 and 90 days. The termination rates were for voluntary and involuntary terminations. In this study, 53.7 percent of terminations were voluntary and 46.3 percent were involuntary. Overall tenure ranged from zero days to 5,786 days for non-managers, with an average of days. Half of 3 ANALYSIS OF CALL CENTER AGENT TURNOVER

4 the agents had tenure of less than 83 days, and a quarter had less than 32 days of tenure. Supervisors had an average tenure of days, with a maximum of 7,609 days. Table E1 illustrates the breakdown of tenure for agents. Table E2 lists the breakdown of tenure for supervisors. Supervisors in this study were older than agents, with the average supervisor age being 33. Younger supervisors (under age 30, comprising 43.6 percent of supervisors) had a termination rate of 9.8 percent, compared to 12.6 percent for those over 30. Voluntary termination rates for supervisors were lower than for agents (5.4% for supervisors versus 6.8% for agents). The supervisor involuntary termination rate was also lower (4.4% for supervisors and 5.8% for agents). 4 ANALYSIS OF CALL CENTER AGENT TURNOVER

5 RESULTS BUSINESS IMPACT OF LEARNING Does Supervisor Training Improve Agent Retention? In this study, business impact was measured by both a nominal change and its associated financial value. The cost of replacing an agent was specifically listed, in a spreadsheet calculator provided by ACS/ BPS. Initial cost of agent replacement ranged from $2,431 to $7,592 depending upon Strategic Business Unit (SBU) and training requirements, resulting in an overall average termination cost of $4,636 per agent lost. Data for this study revealed that 1,427 supervisors took training during the study period (63.7%). Of those who took some form of training, the average supervisor took 2.3 courses. There were 282 courses in which a supervisor could participate. The top five included: 1. Civic treatment for managers (online), n = Manager accountability, n = Civil treatment for managers (instructor led), n = Coaching skills, n = Energizing and empowering employees, n = 89 Does supervisor training improve agent retention? When analyzed on a monthly basis over the two year course of this study, trained supervisors had a.008 improvement in agent retention over untrained supervisors. Supervisors have an average of 12.9 agents reporting to them in any given month. With an improvement of.008 in retention, the annualized gain would be 1.2 employees retained. The formula used in this business impact analysis is as follows: 12.9 Agents/month x.008 Gain/month x 12 months = 1.2 Agents Retained/Year With 63.6 percent of supervisors taking training during the study period, the resulting business impact of all training is as follows: 1,427 total supervisors x.636 who were trained x $4,636 average cost of agent termination = $4,207,504/Year Overall in this study, the business impact of training supervisors resulted in more than $4 million dollars saved due to loss of agents. Not only does supervisor training in general have an impact on agent retention, but also the number of courses the supervisor takes also has an impact on agent retention. Table E3 outlines the difference in agent retention between untrained supervisors, those who have taken at least one course, and those who took 11 courses or more VESTRICS (formerly Capital Analytics) Research conducted in partnership with 5 ANALYSIS OF CALL CENTER AGENT TURNOVER

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