Why is Attrition Important to Customer Service Roles?
It’s expensive to find, hire, and train new employees. It’s more cost-effective to retain the people that you have. Attrition is even more important to the customer service roles as they work directly with your paying customers on the frontlines.
When a customer reaches out to a company for help, they expect to reach a friendly and knowledgeable customer service agent who will answer their questions and quickly satisfy their needs. If your company has a high turnover, you may always be running on the hamster wheel to find, hire and train new customer service agents to keep up with the demands.
Attrition puts a strain on management, reduces production, and puts a damper on the morale in the office. The good news is, there are ways to reduce attrition and retain more of your best assets – your customer service agents. Let’s dive in.
What are the Types of attrition?
There are different kinds of employee attrition. Some types of attrition are desirable to a business, like letting go of a toxic employee. Some types of attrition are undesirable, like when a top producer quits.
Here are the main types of attrition:
- Involuntary attrition – This type of attrition is when an employee is laid off or fired for whatever reason.
- Voluntary attrition – This type of attrition is when an employee chooses to leave the company or quit.
- Internal employee attrition – This type of attrition is when an employee transfers to another department or position within the same organization.
- Demographic attrition – This type of attrition is when an employee transfers to another location within the same organization.
How does Customer Service Attrition Impact Your Business?
Customer service attrition is a real problem and can be costly and even detrimental to a business. Without a doubt, the longevity of a business relies on satisfied customers.
Consumers today expect friendly service fast. Attrition in customer service roles means longer wait times for customers and increased workload on the shoulders of existing staff. Overwhelmed and stressed customer service agents are not likely to use the best practices when handling your customers.
Unhappy customers typically tell their friends and family about their poor experience with a company. Many will go one step further and write negative reviews online about your business.
If a business has high turnover, it’ll constantly need to hire and train new customer service agents. And they will end up forking out a ton of dough to do so with the high expenses of hiring, training, and onboarding a new employee. Let alone the cost of production loss.
Not only did attrition cost your business’s image. It also costs a ton of time, money, and production loss. You also have the loss of business you would have received if your brand’s image was positive. So there are many hidden costs behind attrition, especially in the customer service roles.
How to Calculate Employee Attrition Rate?
Employee attrition or churn rate is when a person leaves their position, and the business does not seek to fill it. Unlike employee turnover, an attrition rate focuses on the permanent or semi-permanent loss of employees and positions over time.
Attrition rates, in general, can have both positive and negative effects on a company. When an employee leaves and the company eliminates the position, it reduces overhead costs.
However, it typically leaves the responsibilities of that position to other team members, increasing their workload. Most businesses use software to calculate their attrition rate.
But understanding the formula is a good idea to help you understand the numbers. The attrition rate is typically determined on a monthly, quarter, or yearly basis.
Follow these steps to calculate your employee attrition rate:
- Start by adding the number of employees your business had at the beginning of the time you’re calculating.
- Add the number of employees your business had at the end of the period.
- Divide that number by two to get your average number of employees.
- Figure out how many employees left during that time.
- Take your employee average and divide it by the number of employees who left.
- Multiply that sum by 100 to get your attrition percentage rate.
What is the Importance of the Customer Service Role?
Some business owners see the customer service role as a cost that doesn’t directly bring in revenue. But that’s not entirely true. The truth is, the customer service agent may possibly bring in the most revenue.
Many times a customer service agent is the only human contact your customers will have with your brand. A customer service agent who provides excellent care can turn a first-time customer into a loyal one that returns to buy again and again. Possibly even a brand advocate that will do quite a bit of marketing for your business – free of charge.
If you want to scale your business and build a large following of loyal customers, you must invest in your customer service. Remember, it costs more to acquire a new customer than it does to retain an existing one.
Repeat customers spend more than first-time ones too. So, your customers should be put on a pedestal and treated with the utmost care—every time.
Exceptional customer service will:
- Increase customer retention
- Increase revenue
- Add to a positive brand reputation
- Increase the customer lifetime value
- Help build business longevity
Customer service roles are known for having high turnover since they’re typically entry-level with lower pay and deal directly with customers who are sometimes mean, upset, or difficult.
A happy customer service agent that enjoys their job is properly trained, and provides excellent customer service is extremely valuable to a business. To retain these valuable assets, you must put in the proper time, effort and resources. Get the gist?
How to Prevent Attrition in Your Customer Service Roles?
OK, we went over the importance of the customer service role and how costly it is to replace them. Don’t let customer service attrition win. Take the steps needed to reduce attrition. So how do you retain more of your customer service agents?
Hire the Right Fit
You know that old saying, you’re only as good as the company you keep? We'll keep that in mind while choosing who you hire. It’s crucial you hire the right individual from the start.
Yes, there are benefits of an individual with the right skill and experience. You may decide to hire a highly experienced customer service agent or one with no experience at all.
Either way, the person should be a good fit for your organization, its culture, values, and attitudes that a lot of times prove to be more beneficial than experience.
Remember, you could train an individual on your products and services and how to service your customers, but it doesn’t matter if they don’t have the right attitude. They will eventually leave, either voluntarily or involuntarily.
Effective Onboarding and Training
When you hire a new customer service agent, what you do next is critical to retaining the employee. The truth is, many companies fail at the onboarding process. It’s necessary to teach your new hires about the company culture, policies, values, attitudes and make them feel involved and part of the team – quickly.
Training is another vital part of onboarding a new hire if you want to retain them. It’s critical to give your new employees the proper time and attention to learn everything they need to be a top producer. It builds their confidence and closeness with the organization, which also helps your customers get the service they want and need
So it is not only for the success of your business, but also the employees' success and job satisfaction which reduces turnover.
Excellent Management Practices
A manager has the most significant influence and impact on a customer service agent’s performance. Poor management is one of the top reasons given when an employee quits. So it all starts from the top.
Just as an employee must show respect to their manager, the manager must also show respect to their employees to build a great working relationship. Managers should take the time to evaluate their management skills and style and curb any destructive behaviors.
A manager should:
- Give clear direction
- Communicate effectively, including listening
- Set fair and attainable expectations
- Be honest and fair
- Maintain a high level of professionalism
- Maintain a positive attitude
- Follow set policies and procedures
- Represent the organization and its culture in a respectful manner
- Be friendly and approachable
Give Recognition and Rewards
Burnout happens, especially in the customer service role. To lessen burnout, you need to take the time out to pump your employees up. Recognition and rewards go a long way for a worker.
Recognition could be a simple “awesome job on handling that cycle” in passing or in email. Or even better, an acknowledgment at a staff meeting in front of their peers.
Rewards are always a fun way to thank your employees for a job well done. And it’s an excellent way to motivate your team to work hard to reach a goal.
A reward system to recognize your employees’ excellence doesn’t have to be costly, but it has to be something they want. It could be their own special parking spot, a day at the spa, additional time off, free lunch or coffee, or a gift card. Of course, pay raises are always welcomed and loved as well.
These small acts of appreciation will show your employees you appreciate and value them and their hard work. Not to mention it will also motivate them to continue to do their best.
Provide a Positive Environment
It’s no secret; some people spend more of their awake hours at work than at home. It can be exhausting, frustrating, and downright draining to spend most of your time in a negative, stressful and boring environment.
Your employees will dread coming to work every day, and that’s what you don’t want behind your customer service roles.
With a light and fun environment, your employees will probably look forward to coming to work every day. OK, maybe not look forward to it, but don't dread it.
Employees that are happy, engaged, and satisfied are more likely to do their best work and motivate others to do the same. Creating a positive environment for your team will for sure reduce attrition and increase productivity.
Of course, work is not all fun and games, and sometimes you need to get serious to get the job done. But it doesn’t always have to be so serious to be effective and productive. Create fun games for your team to play on downtime to keep the vibe chill, and relationships close.
Gain Employee Feedback
How do you know if your employees are happy and satisfied if you don’t ask? If you want to reduce attrition, you need to know how your employees feel about their job.
Remember, your employees have options where to work. Ensuring they have job satisfaction, feel valued and appreciated will help them not be enticed by competitive offerings.
A standard employee feedback box is always a great start. But, if you really want to reduce attrition, you will want to dig deeper. You could send company-wide surveys asking for feedback at least quarterly.
Your managers should always get feedback from their team regularly. And they should be approachable, so their juniors feel comfortable coming to them when something is upsetting them about their job.
When gaining feedback, it’s important to ask questions such as:
- Are you happy with your job?
- Do you feel valued and appreciated?
- Do you think any of our processes seem inefficient? Which ones? How do you think we could fix them?
- What do you think should be changed?
- Are there things in your work world that cause frustration or delays?
- What would you like to see more of at work?
- What inspires or motivates you to do your best each day?
What you do with the feedback is most important. Tackle problems head-on and quickly. It will show to your employees you care and value their opinion and that they can count on you to fix issues to improve their job satisfaction.
Maintain Up-to-Date Technology
There’s nothing more frustrating in a customer service role than the lack of technology needed for them to do the job their best. Technology in the customer service world has grown tremendously from just the old-school typewriter and telephone.
Nowadays, to stay competitive to keep your customers and employees happy, you need to keep up-to-date with the latest technology. Customers expect service via multiple channels, including phone, email, live chat, SMS, and social media. Your customer service agents will need a fast and efficient CRM to service your customers and reach key metrics quickly.
If your employees feel they’re not paid a fair wage or find they could make more money with another company, they’re likely to leave for the higher pay. Understandably, you cannot afford to pay high salaries for every role within your organization. But with the high costs to find, hire and train new employees, it looks a lot more doable.
The customer service role is commonly considered an entry-level and lower-level pay position. But paying competitive and fair pay is critical if you want happy, satisfied customer service agents that deliver excellent service to your customers. And that doesn't run to the first competitive offing they come across.
Keep in mind; money doesn’t always have to be cash. You could offer additional benefits like healthcare, paid time off, or free meals. In the eyes of your employees, benefits are benefits. Whatever you can do to show your employees you value them, do it. It will pay off in the long run.
Attrition in customer service roles means longer waits for your customers only to receive mediocre service by an overworked and stressed employee. It can be detrimental to a business with the loss of top-producing employees and valuable customers.
Having an experienced customer service team to provide fast, friendly, and efficient service is a huge asset to a business. The customer service agent may be the only human contact your customer has with your brand – so make it exceptional.
Putting the proper attention and effort on employee satisfaction is crucial to retain customers. Implementing the best management practices that make your customer service team feel appreciated and engaged in a positive supporting environment will increase employee happiness and reduce attrition.
Are you ready to hire an awesome customer service team to take your business to the next level? If so, contact Awesome CX today.
Average Cost-per-Hire for Companies Is $4,129 | SHRM