Ng: Employee turnover-A A +A
Thursday, September 5, 2013
DURING the last International Contact Center Conference and Expo held at the Mactan’s Shangri-la Resort and Spa and Radisson Blu Hotel, there was a panel and the topic was about the challenges of the call centers, among which is the high employee turnover in the industry.
The moderator was egging the participants, many of them top executives, to declare their labor turnover and the panelists just smiled and responded with not very straightforward numbers like “lower than industry average”. Later on, some numbers were revealed, which means that some of the companies were experiencing high losses of talent.
This is important because a high labor turnover increases the cost of doing business significantly. In the 1970s and 1980s, rapidly growing economies like Japan, South Korea, Taiwan, Hong Kong and Singapore grew with very stable workforces. Now, China, and the newer emerging economies like India and the Philippines seems like it has to grow in the context of much higher turnover.
High labor turnover is something you don’t see on the income statement. It also does not show on the balance sheet. But there are some hard things that happen when you lose many people, especially the skilled ones.
You have costs like lower productivity. After all, the person who left was probably doing something, and unless somebody can do it well or better, then there is something lost there. And for sure, there is also employee satisfaction. When somebody leaves, some people might be left with having to do more work. If you stretch the people too thin, their quality of work and motivation can also go. It is no accident that when there are lots of resignations, the people left may also resign if they feel the pressure of having to cope with additional work.
Then of course, there is lost knowledge. Sometimes, we deal with customers, and we have grown used to working with our account representative. When he moved on, the new account person did not know what to do. There are also instances with our customers where they lost some files or could reconfigure their systems when their tech guys left.
We have even dealt with companies whose programmers left and then they encounter a problem with their software. Because only the programmer knew how to fix it, they have to replace their whole system.
Of course, we all have documentation so that any knowledge acquired will not leave the company once an employee decides to move on. However, if a person has been with a company for a long period of time, it is hard to remember or have somebody acquire all the knowledge that the person has learned over time.
There are also training costs, as you try to get the new replacement up for speed. If the person leaving has to train the new person for two months, you are essentially paying two months’ salary for two workers. So while the training is going on, you have almost zero productivity, or you have only one person doing the job, but you are paying two.
And then there is the cost of recruiting, adveritsing, and interviewing. Many large call centers have several people on the staff doing nothing but interviewing, visiting schools, and looking for qualified candidates.
Turnover is expensive. It can also ruin the company if the replacement is not up to the job. So, it is the persistent problem of a rapidly growing economy where many businesses are trying to poach from each other. That is why industry has to come in not to make the problem worse.
Published in the Sun.Star Cebu newspaper on September 06, 2013.