Problems With Turnover Rate in Customer Service

The customer service industry routinely struggles to retain workers from year to year. On average, the turnover rate in the industry ranges from 30-45%, a strikingly high number compared to the average across all industries of 17.8%

This post will explain the reasons for high turnover rates in customer service, and provide some helpful tips to avoid them in order to have a high retention rate.

What Is Turnover Rate?

Turnover rate is the percentage of employees who leave a certain company or job and are replaced over a certain period of time. Voluntary turnover occurs when an employee leaves the job by his/her own volition, and involuntary turnover occurs when an employee is terminated. The focus of this post is on voluntary turnover.

Why Does Turnover Rate Matter?

Turnover rate can indicate some things about a company such as employee satisfaction or management efficiency. Additionally, there is a cost to replacing employees which is often not considered.

On average, the cost to a company to replace an employee is about 20% of the employee’s salary (meaning if an employee makes 30,000 USD annually, it costs 6,000 USD to replace them).

This high cost comes from the investment in employee recruiting, training, and onboarding. Being able to reduce employee turnover rate will likely increase satisfaction which would consequently increase productivity. This would be a benefit to both employees and the company, saving the company money and benefiting the bottom line

Reasons For High Turnover Rates

  1. Employee Fit 

Sometimes you simply just have the wrong person on the job. Companies do the best they can to ensure that the individual hired for a position will be the right person for that job, but it is hard to fully know beforehand how well your selection will fit into the company and the role (at Contack we have your solution for this below)

2. Monotonous Work

Customer service agents typically do not get a high variation of tasks they complete on a daily basis. With a narrow scope of work and often scripted communication, answering routine phone calls and responding to repetitive questions via emails can lead to work feeling mundane and meaningless. This can be detrimental as boredom is the primary reason 1 in 3 professionals leave their jobs. Agents do not have decision-making ability and may not feel that they have an impact or see how their work fits into the larger organization. In her book The Good Jobs Strategy, Professor Zeynep Ton explains further how monotonous work can negatively impact a company.

3. Limited Professional Development

In other professions, employees the ability to constantly acquire and test new skills. This potential is limited in customer service due to infrequent communication with employers and can cause employees to feel stagnant on the job. A 2019 study found that professional development was the area in which HR professionals planned to invest the most resources at the request of employees. This proves that employees are constantly looking to acquire new skills and grow professionally.

4. Absence of a Team Culture

With the lack of long term relationship building with customers, customer service can be lonely. Whether done from home or in an office, there is limited communication with others, which does not allow for employees to feel as if they are part of a team if ever they need support.

5. Unruly Customers

Unhappy customers can be difficult to deal with. A customer who feels their needs are not being met might resort to rude language and behavior as they forget that they are dealing with a human being on the other side of the phone. Customer service reps who are tired of being talked to disrespectfully on a daily basis might choose to walk away from the job.

5 Tips To Reduce Employee Turnover

  1. Hire for individuals who have a lower probability of turning over

Companies like us provide this unique service which maximizes the expected employee lifetime value. This data-driven approach is made possible with Contack’s unique algorithm potentially saving your company a significant amount of time and money.

2. Provide development opportunities

Allowing your customer service reps the ability to constantly learn on the job and apply their knowledge will give them the feeling of continued growth on the job. Studies have shown that employee development leads to increased employee performance and subsequently increased organizational performance. A little bit of opportunity provided for employees can go a long way to better a company

3. Foster a team culture

It is important for employees to feel that they are part of a bigger team all working to achieve a common goal. Also, the ability to receive constant feedback both from peers and superiors serves as a reminder for employees that they are not alone in whatever they’re doing. 89% of HR Leaders report that employee recognition programs improve the experiences of their employees, and this would be a great first step towards ensuring employee satisfaction.

4. Allow a flexible work schedule

The ability to set your own hours gives employees a sort of control over their lives that a rigid schedule does not allow. Studies have shown that work schedule flexibility is positively associated with employee performance and absenteeism. Rather than mandating employees to work specific time shifts, it could be beneficial to instead state how many hours they have to put in.

5. Establish Clear Goals and Benchmarks

Working in customer service, it might not always be possible for employees to know what it is that they are working towards. Without a clear goal in mind, employees will be left feeling as if their work is to no end. Setting tangible goals allows employees an objective to work towards and studies have shown that goal setting also increases employee performance.

So What Now?

Hopefully, this post has given you some ideas about how you can prevent employee turnover for your current employees in the customer service industry. There is no perfect solution to fixing the issue, but if you are looking for a pre-hiring tool, it would be worth it to invest in a predictive instrument to optimize employee lifetime value. Such a tool would predict the best hires based on a comprehensive algorithm and tell you who, based on their past performance, are less likely to quit and who will perform well at your contact center. Feel free to contact us below if you’d like to learn more.

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