Sunday, July 13, 2008
Calculating Annualized Turnover
While turnover is a fact of life in any organization, turnover rates differ greatly from one organization to the next. For example, some call centers operate with annual rates of less than 5%, while others see rates of well over 50% percent. (According to ICMI research, many call centers are in the 15% to 30% range.) An important first step in managing turnover is to calculate your annualized turnover accurately, so that you have a consistent basis for comparison and trending.
There are two figures you'll need in order to calculate annualized turnover - the number of agents exiting during each month, and the average number of staff during those months. (The average number of agents on staff during the month is often calculated by taking an average of the counts at the end of each week of the month; alternatively, you can take an average of the trained staff count at the beginning and end of the month.)
The formula ICMI recommends for calculating turnover is as follows:
Turnover = (number of agents exiting the job average number of agents during the period) x (12 number of months in the period)
For example, let's say your data is as in the following chart:
Using the formula, your annualized turnover rate comes out to just under 29%:
(20 104) x (12 8) = 28.8%
While knowing your overall turnover rate is valuable, we recommend breaking it down further, into internal/external and voluntary/involuntary categories. Internal turnover refers to employees that leave the call center but stay within the organization; external turnover refers to employees that leave the organization entirely. Voluntary turnover is when employees decide to leave, while involuntary separation occurs when management makes the decision to end employment (e.g., through layoffs or firing).
In the example we just used, the 29% annualized turnover rate might be categorized as follows:
TURNOVER COSTS AND BENEFITS
Turnover can bring both costs and benefits to the call center. Costs are often broadly categorized as follows:
• Recruiting and hiring costs, which may include the cost of advertising for new positions, the cost and time involved in interviews and background checks, any costs associated with search firms or placement agencies, and, potentially, relocation costs.
• Training and orientation costs, which include the direct cost of training, the cost of overall lower productivity from newer employees, and the cost of overtime if current employees must help cover hours.
• In commercial organizations the most severe costs can be those associated with poor customer service - lost sales, reduced loyalty and outright defections to competitors.
Turnover can also yield benefits. For example, if employees leave for other positions within the organization, the call center gains experienced advocates in other departments. Turnover may also reduce structural costs (assuming new employees are brought in at lower pay scales) and create the means for the call center to bring in new employees with needed skills and fresh insights.
The causes and costs/benefits will vary by type of turnover. For example, voluntary external turnover is more of a detriment to the organization than planned internal turnover. Do enough analysis to be able to estimate the relative impact of each type of turnover.
IDENTIFYING THE CAUSES OF TURNOVER
To manage turnover, you must understand what causes it. Common ways to identify causes include:
• Conduct a job and salary analysis vis--vis market conditions.
• Conduct group meetings with agents to discuss environmental factors, such as stress, management style, workload, etc.
• Review the orientation program to ensure jobs are being accurately represented to new employees
• Analyze exit interviews.
• Conduct regular employee satisfaction surveys.
Specific causes can vary widely (see the sidebar below), and identifying the top five to seven things driving turnover will be a huge step towards creating an appropriate prevention strategy.
RETENTION STRATEGIES
While there is no single formula for agent retention that is appropriate for all call centers, there are plenty of tried and true strategies that will greatly enhance the chances of retaining your agents and ensuring they perform at their best. Some of the most common areas of focus include:
Improve hiring and job fit. Hiring candidates based on the right job qualifications and behavioral competencies will improve your chances for a better job fit. If turnover rates are high, revisiting the hiring process should be the first step in improving retention.
Improve competitive pay and benefits. Ensure that jobs in the call center are internally and externally equitable. Even if you're budgets are tight, don't count this strategy out - it might be more practical and less expensive than meets the eye if you've really analyzed and identified the true costs of turnover.
Ensure that agents receive timely coaching and feedback. Encouraging the positive aspects of the agent's performance, modeling desired actions/behaviors and working with them to create feasible action plans that will enable them to achieve objectives are essential steps.
Provide opportunities for ongoing skill and career development. Agents who see their position as dynamic and evolving are more likely to remain committed to the call center. Create a skills-based pay program and, if possible, a compelling career path in the call center to encourage agents to continually expand their knowledge and capabilities.
Provide as much flexibility in work schedules as possible. Call center scheduling takes creativity and communication since both workload requirements and agent requirements must be accommodated as much as possible.
Improve supervisor training. It's often said that agents don't leave companies - they leave their supervisors. Taking steps to ensure that your supervisors have the skills and knowledge necessary to be the best managers possible can improve retention dramatically.
Provide recognition. According to much of the research on turnover, just saying thanks for a job well done goes a long way towards job satisfaction. This can be formal, e.g., through newsletters and announcements, and informal through everyday conversations.
These suggestions represent the proverbial tip of the iceberg. Other strategies can range from implementing a telecommuting program, to establishing a mentoring program, designing better incentive plans and improving facilities design.
FINDING THE RIGHT BALANCE
A certain amount of turnover is inevitable and acceptable - your challenge is to determine just what that acceptable level is. To do so, it's important to understand the full cost of turnover and compare it to the costs associated with staff retention programs. The key is to find the right balance: you don't want to spend more money retaining staff than it costs to replace them, but you also don't want to spend more money replacing staff than it costs to keep them.
Among the practical criteria to consider when seeking the right balance are:
• The maximum amount the company is willing to pay for these positions.
• Availability of a skilled labor pool to fill agent vacancies.
• The cost (money and time) of effectively training new-hires.
• The relative costs of lower quality and productivity when turnover increases.
• Organizational values and culture. In sum, there is much that can be done to address turnover and improve retention. Don't leave it to chance.
There are two figures you'll need in order to calculate annualized turnover - the number of agents exiting during each month, and the average number of staff during those months. (The average number of agents on staff during the month is often calculated by taking an average of the counts at the end of each week of the month; alternatively, you can take an average of the trained staff count at the beginning and end of the month.)
The formula ICMI recommends for calculating turnover is as follows:
Turnover = (number of agents exiting the job average number of agents during the period) x (12 number of months in the period)
For example, let's say your data is as in the following chart:
Using the formula, your annualized turnover rate comes out to just under 29%:
(20 104) x (12 8) = 28.8%
While knowing your overall turnover rate is valuable, we recommend breaking it down further, into internal/external and voluntary/involuntary categories. Internal turnover refers to employees that leave the call center but stay within the organization; external turnover refers to employees that leave the organization entirely. Voluntary turnover is when employees decide to leave, while involuntary separation occurs when management makes the decision to end employment (e.g., through layoffs or firing).
In the example we just used, the 29% annualized turnover rate might be categorized as follows:
TURNOVER COSTS AND BENEFITS
Turnover can bring both costs and benefits to the call center. Costs are often broadly categorized as follows:
• Recruiting and hiring costs, which may include the cost of advertising for new positions, the cost and time involved in interviews and background checks, any costs associated with search firms or placement agencies, and, potentially, relocation costs.
• Training and orientation costs, which include the direct cost of training, the cost of overall lower productivity from newer employees, and the cost of overtime if current employees must help cover hours.
• In commercial organizations the most severe costs can be those associated with poor customer service - lost sales, reduced loyalty and outright defections to competitors.
Turnover can also yield benefits. For example, if employees leave for other positions within the organization, the call center gains experienced advocates in other departments. Turnover may also reduce structural costs (assuming new employees are brought in at lower pay scales) and create the means for the call center to bring in new employees with needed skills and fresh insights.
The causes and costs/benefits will vary by type of turnover. For example, voluntary external turnover is more of a detriment to the organization than planned internal turnover. Do enough analysis to be able to estimate the relative impact of each type of turnover.
IDENTIFYING THE CAUSES OF TURNOVER
To manage turnover, you must understand what causes it. Common ways to identify causes include:
• Conduct a job and salary analysis vis--vis market conditions.
• Conduct group meetings with agents to discuss environmental factors, such as stress, management style, workload, etc.
• Review the orientation program to ensure jobs are being accurately represented to new employees
• Analyze exit interviews.
• Conduct regular employee satisfaction surveys.
Specific causes can vary widely (see the sidebar below), and identifying the top five to seven things driving turnover will be a huge step towards creating an appropriate prevention strategy.
RETENTION STRATEGIES
While there is no single formula for agent retention that is appropriate for all call centers, there are plenty of tried and true strategies that will greatly enhance the chances of retaining your agents and ensuring they perform at their best. Some of the most common areas of focus include:
Improve hiring and job fit. Hiring candidates based on the right job qualifications and behavioral competencies will improve your chances for a better job fit. If turnover rates are high, revisiting the hiring process should be the first step in improving retention.
Improve competitive pay and benefits. Ensure that jobs in the call center are internally and externally equitable. Even if you're budgets are tight, don't count this strategy out - it might be more practical and less expensive than meets the eye if you've really analyzed and identified the true costs of turnover.
Ensure that agents receive timely coaching and feedback. Encouraging the positive aspects of the agent's performance, modeling desired actions/behaviors and working with them to create feasible action plans that will enable them to achieve objectives are essential steps.
Provide opportunities for ongoing skill and career development. Agents who see their position as dynamic and evolving are more likely to remain committed to the call center. Create a skills-based pay program and, if possible, a compelling career path in the call center to encourage agents to continually expand their knowledge and capabilities.
Provide as much flexibility in work schedules as possible. Call center scheduling takes creativity and communication since both workload requirements and agent requirements must be accommodated as much as possible.
Improve supervisor training. It's often said that agents don't leave companies - they leave their supervisors. Taking steps to ensure that your supervisors have the skills and knowledge necessary to be the best managers possible can improve retention dramatically.
Provide recognition. According to much of the research on turnover, just saying thanks for a job well done goes a long way towards job satisfaction. This can be formal, e.g., through newsletters and announcements, and informal through everyday conversations.
These suggestions represent the proverbial tip of the iceberg. Other strategies can range from implementing a telecommuting program, to establishing a mentoring program, designing better incentive plans and improving facilities design.
FINDING THE RIGHT BALANCE
A certain amount of turnover is inevitable and acceptable - your challenge is to determine just what that acceptable level is. To do so, it's important to understand the full cost of turnover and compare it to the costs associated with staff retention programs. The key is to find the right balance: you don't want to spend more money retaining staff than it costs to replace them, but you also don't want to spend more money replacing staff than it costs to keep them.
Among the practical criteria to consider when seeking the right balance are:
• The maximum amount the company is willing to pay for these positions.
• Availability of a skilled labor pool to fill agent vacancies.
• The cost (money and time) of effectively training new-hires.
• The relative costs of lower quality and productivity when turnover increases.
• Organizational values and culture. In sum, there is much that can be done to address turnover and improve retention. Don't leave it to chance.
Friday, July 11, 2008
Why HR Professionals leave the organization?
We don’t get the talent in market easily. You have to search it. The same is with HR talent. The role of HR is critical in every organization. Service and retail industry is growing and also the employment in various sectors and positions. The HR has become a key to control the total Human Capital.
Hence the market demand for HR professionals is also high. The job hopping is increasing across the positions in all sectors. I have seen senior level professionals leaving the organizations due to some reasons within 6 months or one year. I tried to find the reasons from one survey.
This survey is not absolute survey and needs to work more. The sample size for the survey was 150 HR professionals from various Industries and having the experience of 2-10 years.
Why HR professionals leave the organization? What are the key reasons for leaving?
Following are top 7 reasons.
1) Compensation and benefits: 49 percent HR professionals leave the organization for increased compensation. This reason is more dominant over any other reason.
2) Challenging job Profile and Learning new HR concepts: around 40% HR professionals responded that they see challenges in new profile and also the new learning in HR.
3) Freedom to take decisions: 34% Professionals leave the organization because they were not authorized to take the decisions. The decision was dominated by the superior. They feel that they were playing the role of just co-ordinator. These people may be ambitious people.
4) Politics in the organization: 32 % professional were fade up with the politics played in the organization. The definition of politics is person specific but still important to decide the career move.
5) Lack of HR vision: Professionals are not aware about the HR vision of the organizations. 29% professionals say that they leave the organization due to lack of clarity about HR vision of the organization.
6) Good employer brand: Around 25% professionals think that Employer Brand is also important factor while deciding the career move from one organization to other organization.
7) Relations with superior: Employees leave their superior and not the organization. This is true here. 21% professionals think this.
Hence the market demand for HR professionals is also high. The job hopping is increasing across the positions in all sectors. I have seen senior level professionals leaving the organizations due to some reasons within 6 months or one year. I tried to find the reasons from one survey.
This survey is not absolute survey and needs to work more. The sample size for the survey was 150 HR professionals from various Industries and having the experience of 2-10 years.
Why HR professionals leave the organization? What are the key reasons for leaving?
Following are top 7 reasons.
1) Compensation and benefits: 49 percent HR professionals leave the organization for increased compensation. This reason is more dominant over any other reason.
2) Challenging job Profile and Learning new HR concepts: around 40% HR professionals responded that they see challenges in new profile and also the new learning in HR.
3) Freedom to take decisions: 34% Professionals leave the organization because they were not authorized to take the decisions. The decision was dominated by the superior. They feel that they were playing the role of just co-ordinator. These people may be ambitious people.
4) Politics in the organization: 32 % professional were fade up with the politics played in the organization. The definition of politics is person specific but still important to decide the career move.
5) Lack of HR vision: Professionals are not aware about the HR vision of the organizations. 29% professionals say that they leave the organization due to lack of clarity about HR vision of the organization.
6) Good employer brand: Around 25% professionals think that Employer Brand is also important factor while deciding the career move from one organization to other organization.
7) Relations with superior: Employees leave their superior and not the organization. This is true here. 21% professionals think this.
Subscribe to Posts [Atom]
