A use case without introducing data from a real customer along with a smiley face of a well motivated manager? Unthinkable? Possible! Let me demonstrate how our software solution helps customers in reducing their costs through decreasing agent attrition. At AgentBalance we have decided to take the route less traveled by creating a use case generally applicable for everyone. All we need is for you to read this article, discuss it with us, share some basic numbers and see how much of an added value we can deliver.
While there are lots of great articles describing agent attrition and how to avoid it, they rarely speak about the real numbers, or rather, how the presented solutions can help you save money. We have worked out this sample calculation to provide you with a complete idea of how we are able to bring significant savings on reducing your agents’ turnover. Of course, lowering agent attrition is only one of the positive synergy effects achieved by using AgentBalance. Other areas such as sales and collections growth and customer churn reduction will be the topic of other articles. But just the sole fact of reducing agent attrition in a completely new way is amazing. Let’s have a look.
The estimated average of agent attrition costs correlates within the 40-200% of an agent’s yearly salary. (S4) In the table above we calculated with 28.06% only.
So, we have presented a lot of numbers. We could have made it easy on ourselves and say: “Let’s calculate agent attrition costs the good old way.” Meaning: multiply the agent’s monthly salary by three and be happy. But we did not – these numbers above are built on a solid foundation of long term research and statistical figures. And the best thing about it? It can be adjusted to the needs of any contact center. We will be more than happy to discuss this topic with you.
For the Math enthusiasts – Some more numbers and details
Let’s have a look at the explanation of the figures presented in the table above.
Training new agents – calculated by multiplying the agent’s hourly rate by the number of hours to train. The average number of training hours is 270 (S1).
Trainer costs – calculated by multiplying the trainer’s hourly rate by the number of hours to train. Preparation time not included in the calculation. The calculation accounts with 5 agents per trainer.
Interview costs – calculated as the hourly wage of the interviewer multiplied by the number of hours interviewing candidates. Average of 14 (S1) candidates, 2 interview rounds each to hire one new agent.
Recruiting costs – The costs associated with recruiting new agents. Including the cost of advertising. Also included are the costs associated with screening (third party screening tools, etc.).
Opportunity Cost – calculated by multiplying the bill rate by the number of lost productivity hours caused by empty seats from attrition. Not included in the calculation.
Engagement – management is forced to ask the remaining agents to do more with less resources. This leads to decreased moral, effort, and performance and increases in absenteeism and turnover. Let’s assume there are 10 agents per team, 1 agent leaving influences team productivity by -1% for the period of 2 months, which means they get 1% of their salary for not performing accordingly for two months.
Performance – losing a veteran agent and replacing with a newbie agent can have a significant impact on performance. An agent fresh out of training is simply not going to be as proficient as a veteran one. The new agent’s proficiency is lower by -30% for the period of 4 months, which means they are 30% more expensive than their predecessor for 4 months. And we are being very generous to the new agent here.
Service levels – AHT, FRC, on hold time improvement. Not included in the calculation but very easy to add based on hard data.
Oh, and have you noticed the * and **? Good.
* Average over 8 500 USD (S3, S6)
** Average of 27% (S5)
S1 Cummins, D and Santomero, A (1999). Changes in the Life Insurance Industry: Efficiency, Technology and Risk Management.
S2 Stuller, J (1999). Making call-center voices smile: a business case for better training.
S4 Trostle and Associates (2012). MANAGING HIDDEN COSTS OF CONTACT CENTER TEAMS IN THE NEW ECONOMY.
S5 US Contact Center Decision-Makers’ Guide. (2014 – 7 th edition)
Přemek Piska, CCO AgentBalance