How to define, measure and calculate contact center attrition

In the contact center industry, employee turnover (also known as attrition) is a fact of life. Many contact center jobs are entry-level, so it’s understandable that many agents are still exploring alternative career options. In particular, Millennials are known for having shorter tenure at more numerous employers than any other generation.

There are two types of attrition – voluntary (think the career-hopping/soul searching of a young college graduate looking for the right career path), and involuntary, where the employer decides to dismiss an agent for performance or other issues.

Like the saying goes, “everything in moderation.” When voluntary or involuntary attrition levels (or both, in many instances) get too high, the impacts on customer experience and overall performance can be significant, so it’s understandable that pundits and experts of all stripes are in the business of offering advice on how to slow the revolving door of contact center agents.

Defining, discussing and calculating contact center attrition – with Everest Group

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Lots of advice on reducing attrition

To be sure, there is loads of advice out there for how to reduce attrition in the contact center. A simple Google search on “contact center attrition and turnover” turns up checklists, 10-step plans, and all manner of tips and suggestions for “reducing,” “managing,” “controlling,” “decreasing” and “improving” contact center attrition.

But how is anyone going to achieve the spectacular results promised in all of these plans and checklists without a consistent framework for defining attrition and measuring the resulting cost and revenue impacts?

Defining and discussing contact center attrition

Everest Group, COPC, and TELUS International use the following formula in tracking attrition rates in the general business process outsourcing (BPO) space:

[Voluntary resigns of full-time employees in a calendar year / (Opening Headcount at the beginning of year + Closing headcount at the end of the year/2)]*100

This definition looks at attrition on an annual basis and does not include involuntary resigns and only employees that have full-time permanent status. Employees in the training phase are not included.

With the definition above serving as a common point of reference, the clients of contact center outsourcing services can better normalize information provided by their partners in the market. To learn more about how we arrived at this definition and formula, download our first attrition study:  Defining, Discussing & Calculating Attrition – with Everest Group.

Measuring the business impacts of contact center attrition

After gathering information from our own contact center outsourcing programs and sharing insights with analyst firm Everest Group, we’ve put together a solid analysis on the business impacts of attrition. Not surprising, attrition costs money – and potentially a lot of money.

From our analysis, did you know?

  • A typical U.S.-based 500-person contact center could spend roughly US$0.5–1.3 million a year on attrition related costs, while experiencing revenue leakage of US$0.4–0.6 million in a year.
  • Put together, this results in a potential loss of US$1–2 million in business value over a period of one year directly attributable to attrition.

High attrition causes a one-two punch to the bottom line by driving up key operational costs (hiring, training, etc.), while depriving the business of additional revenue opportunities, whereas highly tenured agents tend to delight customers, increasing their lifetime value.

It’s clear that the impact of attrition rates on business outcomes is a growing priority for business leaders looking to utilize the contact center to drive new business growth.

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