How big are the benefits?

The Challenge

As a major multinational professional services company with BPO operations in multiple countries, increasing the retention and performance of the new hires in the Philippines centers was particularly challenging, due in large part to the staggering total annualized attrition rate of 48% at this branch location (with monthly attrition rates ranging from 3-6% over the last two years).

Moreover, we realized that the major challenge was represented by the 90 to 180 days bucket, in which the monthly attrition rates had peaks of 11%.To improve these aspects, our Client had already decided that they wanted to do direct hire instead of relying mostly on staffing agencies, as they could have more control over the process and levers.

Attrition Formula: (Total Attrites for the Month) / Average Headcount (Beginning HC and Ending HC of the month)

The Solution

After conducting initial meetings to understand their hiring processes and breaking down the historical data, our client insisted on leveraging Contack’s Machine Learning solution in order to predict the attrition results for the cohort of applicants with satisfactory confidence. In order to adapt our solution specifically to the criteria required from our client, we took into consideration multiple variables, ranging from Attrition prediction to Performance optimization.The Operations and Talent Acquisition department had no difficulties in providing the data collected in the hiring processes to feed our solution, making for a seamless configuration process and allowing our client to take the first critical step towards material improvements across the board.

The Results

Lower Attrition

Our Client compared their turnover both before and after incorporating Contack screening and recruiting tools into their hiring process. In the 26 weeks before testing, when they were using a mixed model of internal hiring and staffing agencies to fill their positions, they had to deal with a 52% attrition rate.In the 24 weeks after signing on and partnering with Contack, our Client had had a drastic reduction in turnover rate, dropping to 34%, while maintaining a comparable number of new hires. Before and after implementing our solution, our Client’s turnover rate experienced an impressive decrease of 18 percentage points or a percentage reduction of 35%

Lower Hiring costs

At the same time, the hiring costs were reduced drastically. The hiring budget per hire was slightly above $1,000 before the solution was implemented on an aggregate level. Implementing Contack also lowered the costs of applicant screening, applicant interviewing, and the process of offers to applicants, resulting in a total reduction of 14% in costs. This cost decrease subsequently allowed for an increase in the financing of referrals and other bonuses that would continue to produce benefits around the quality of hires and the attrition rates.These are extremely conservative estimates of the results. We did not include the training costs – calculated yearly and approximately equal to 20% of annual salary – and the hiring administrative costs  – comparable to the hiring budget per employee.

Better Quality of Hire and higher performances

Contack’s solution also helped to tangibly raise the bar for our Client’s quality of hire. After conducting the A/B testing over the hired pool before and after using our solution, we were happy to report that Contack had enabled our Client to achieve an average improvement of 16% in performance rates. Team Leaders and supervisors across the entire organization noticed the difference, and so did the customers who interacted with the agents!

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