Opinion

BPO: Working from home could reduce your attrition by at least 30% – That’s millions of dollars per year

Think about the costs involved in running a contact centre. You have all that physical infrastructure to manage – the building itself, all the technology, even the software licenses. But on top of all that technology and equipment is the most significant cost of all – the people.

It takes time to find the right people, to onboard and train them. They build experience over time that allows them to work faster and more efficiently.  Contact centres are losing almost half their people every year to attrition – in many cases this is even higher. Why is this happening and what can they do?

It’s certainly a problem that is worth addressing. In the US it is estimated that the cost of replacing each employee is from half an annual salary to two times an annual salary. I spoke to Keith O’ Looney, Head of New Business for ThinScale when researching this article. He told me that his numerous C-Level clients suggest that the cost of hiring each agent is around $3,000-5,000. Think about what this means if you are losing 80-90% of your team every year – Your hiring costs are astronomical.

Industry analysts like Peter Ryan have been saying for years that there is a directly measurable cost of attrition and you can’t deal with it just by giving agents a pay rise. People want agency. They want greater control over their working day and environment and facilitating flexible options, such as working from home, are far more likely to result in an immediate reduction in attrition.

In their 2021 Gig CX report, Limitless Technology explores the psychological difference between workers based at home with more control over their working hours than those forced to commute to an office. The report features data from Davies Group and it’s shocking.

Davies Group outlines some of the issues faced by contact centres that do not allow any work-from-home (WFH). In their data, attrition is running at about 50% PER MONTH and staff absence at 6-8% daily. People are doing more than before the pandemic and there is a complete lack of agility in the entire business model.

But why do people leave contact centres so often? There are many individual reasons why people quit their job, but in contact centres there are a few reasons that keep on repeating and they are generally focused on a lack of agency in the role:

  • Lack of engagement with the employee
  • Lack of recognition
  • Inflexible working environment
  • Lack of opportunity for career development
  • Low pay
  • Lack of job satisfaction

Some might argue that all this comes with the territory – contact centre jobs have always been low paid and these employees don’t have any opportunity to change the processes they need to follow – high attrition is to be expected. I believe this is wrong for multiple reasons and I think there is an enormous opportunity for companies managing contact centres to improve their conditions.

First, the contact centre process itself is changing. Self-service is improving. Automation is improving. The end customer has many more options and channels to find help before they need to reach out to a contact centre. This is elevating the role of the agent to that of a problem-solver – a genuine expert. Not just someone taking repetitive requests to change a password. The agents should be more engaged in complex issues that are only reaching the contact centre because the automated systems and self-service could not answer the question. So the agents will naturally be more engaged in more interesting and complex work.

Second, there is a very clear opportunity to offer agents more flexibility in their working environment – specifically to allow them to securely work from home. Working from home was demonstrated to be viable during the Covid-19 pandemic, but it should not be rejected now it is becoming possible to return to the office.

Think about all those reasons why agents quit. Inflexible working environment, lack of job satisfaction, lack of engagement… many of these issues can be directly addressed by offering the agent more flexibility in their working hours and work location. Give them the opportunity to take more control over when and where they work and you can immediately improve engagement and reduce attrition.

This has a twin effect. It can directly improve the end customer experience because the agents are more engaged in their work and this leads to lower agent attrition – so you lose fewer people and the people on the team perform better.

This is not just an opinion or estimate. . Speaking with several industry BPOs, I hear of at least a 25-30% improvement in attrition rates. TTEC has seen a 48-60% improvement at home. LiveOps, one of the longest WFH providers, claim even higher at 60%.

You will never remove attrition completely, but if you can dramatically reduce it, you will save a considerable amount. Reducing attrition by just 30% will save a BPO around $1 million each year for each thousand agents employed, taking just that $3-5k cost per hire. Look at some of the big guys in this industry – they employ hundreds of thousands of people. In many cases this reduction in attrition equates to the entire net-profit of an oraganisation!

Just imagine what this could mean for your bottom line. Not only does it mean an immediate potential saving of millions – for any significant contact centre – but also the improved performance that is possible when the team is happier and more engaged. This one single change can improve customer satisfaction and reduce the budget you normally allocate to constantly replacing people as they quit.

Offer your team more flexibility and they will reward you.

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