It raises some troubling issues about the Outsourcing Industry and hiring in particular, and brings out a few questions about the industry and indirectly some of the same issues for other industries, assuming that the article accurately reflected his presentation.
He addresses the need to focus on retention initiatives while continuing to grow! Very commendable.
It is still surprising that he reports that retention rates range from 40-80 percent after at least 6-8 years of high growth in the Business Process Outsourcing (BPO) industry in the Philippines. This means that attrition/turnover is the reciprocal, amounting to: 20-60%. The period of time covered was not reported. But, in the past, about 3 years ago, BPA/P ( The Philippine association for BPO's) had reported turnover from 20-100 percent per year, and that many times half of these numbers were due to people leaving and the other half, people being "asked to leave." Therefore, there has been some improvement (dropping the 100% turnover down to 80%), but not great.
Mr. Rizzo mentions the reasons for the present turnover is due to several reasons:
1) Overnight hours which people are not used to working,
2) Stress caused by customers who may be too challenging to handle because they are angry,
3) Employees find the work too technical,
and
4) the Company is unable to meet the employee's expectations.
This is amazing given today's technology and methods for Pre-hiring:
Issue #1) Overnight hours which people are not used to working: there are video introductions that can help to address this issue and can be used as "knockouts" to prevent further interviewing and hiring these kinds of people. Granted, recent graduates and some people may not know if they handle the hours, but it is likely that most know their limitations or the candidates can talk with someone they know in the industry. Also hiring people who have already worked in the industry, these people will know if they can handle the hours.
Issue #2) Stress caused by the customers: many companies use videos to simulate real-life situations and also tests, both verbal reply and written, to find out how a candidate will handle this kind of angry customer. Again these are "knockout" issues before going any further in the pre-hire process and give the candidate a good view about what the position will entail, as well as, if the candidate will like or want to work there.
Issue #3) Employees find the work too technical: there are many skill tests to find out what the candidate may know or at the very least by using assessments, if they have technical capabilities and interests.
Issue #4) The Company is unable to meet the employee's expectations: It would be helpful to better understand exactly what kind of expectations are not being met, since this article is not specific. Once the expectations are known(as they probably vary by company), these can be covered up-front in the Pre-Hire process.
Most of these issues can be uncovered or addressed through good programs of: application and ATS(Applicant Tracking Systems), assessment and skill testing, Behavioral and Critical Incident Interviewing and good benchmarking around each job, based on top performers. These steps will help to "weed out" those that will not make it longer term, all of which should significantly help in reducing turnover, especially in the ranges mentioned as being 20-60 percent.
In past years, the BPO industry identified that one of the major problems they had was not identifying leadership in their pre-hiring process, as there was a gap between hiring good agents and their being able to handle the front-line position. Now, many times companies try to identify 10% of their incoming candidates who also have a good job fit with the front-line manager benchmark also. This process allows them to develop succession planning and training for the next level potential managers early on in the employees' career and development. [Benchmarking around top and bottom performers, can be done and takes a matter of minutes, with the right tool.]
Obviously, good "on-boarding programs" can also help to address these issues by providing a good introduction to the company and the specific requirements of the job, so that new hirees can "opt out" on their own early, saving the company training costs and more investments that will happen in the ensuing months.
Lastly, Mr. Rizzo made the statement: “We are not going to let price pressures get in the way of investing in our people. After all, happy employees translate to happy customers”. This is true to a point, especially in growing "employee engagement." But the reality also arises, in that incurring too many costs CAN affect your competitiveness globally! Hiring Right is probably be the best solution, while providing facilities and benefits, are more like the icing on the cake.
It is hoped that the industry can really address these unsupportable turnover/attrition rates, because these rates lead to extremely high costs. When you consider the rule of thumb that turnover costs run from 3 months to 2.5 years worth of a person's salary, is the company sustainable long-term?
Only time will tell!
Contact center firms urged to invest more
By Louella D. Desiderio (The Philippine Star) Updated March 17, 2012
MANILA, Philippines - Contact centers in the country will have to invest more in programs focused on their employees to encourage them to stay in the company and provide better service to customers, a top executive of a contact center service provider said.
Speaking at the Asia CEO Forum held on Thursday, David Rizzo, president for Asia Pacific of Teleperformance said that investing in retention activities need to be done by contact center firms that intend to continue to grow their business given the number of employees choosing to leave the industry and the high competition among firms in finding workers.
“It is very critical to focus on retention initiatives to ensure not having to replace the employment pool while growing at the same time,” he said.
He said that employees in contact centers leave for reasons often related to the job.
He cited that some employees opt to leave the business due to the overnight work hours which they may not be used to or the stress caused by customers who may be challenging to handle.
He said that customers who receive an incorrect bill, for instance, may be hard to deal with particularly when they start complaining and taking their anger on the call center agent.
Some employees, he also said, leave the job because they find the work too technical or unable to meet their expectations.
He noted that in the industry, the employee retention rate ranges from 40 to 80 percent.
Given the limited supply of talent available in the market and the high competition among contact center firms for supply of workers, he said, investing in programs that keep employees satisfied with their job becomes even more important.
He said that contact center firms can for instance, provide spaces for recreation in the workplace such as gym, sports facilities and karaoke rooms, which their employees can use.
Contact center firms, he also said, can offer employees who cannot work overnight a daytime shift.
Career management programs, he said, may also be developed by contact centers for their employees.
He said that while investing more in employee-engagement programs may mean additional costs for the company, it is expected to yield results favorable to the company since its workforce is its main asset.
“We are not going to let price pressures get in the way of investing in our people. After all, happy employees translate to happy customers,” he said.
Contact Center Firms Urged to Invest More - by Louella Desiderio
Speaking at the Asia CEO Forum held on Thursday, David Rizzo, president for Asia Pacific of Teleperformance said that investing in retention activities need to be done by contact center firms that intend to continue to grow their business given the number of employees choosing to leave the industry and the high competition among firms in finding workers.
“It is very critical to focus on retention initiatives to ensure not having to replace the employment pool while growing at the same time,” he said.
He said that employees in contact centers leave for reasons often related to the job.
He cited that some employees opt to leave the business due to the overnight work hours which they may not be used to or the stress caused by customers who may be challenging to handle.
He said that customers who receive an incorrect bill, for instance, may be hard to deal with particularly when they start complaining and taking their anger on the call center agent.
Some employees, he also said, leave the job because they find the work too technical or unable to meet their expectations.
He noted that in the industry, the employee retention rate ranges from 40 to 80 percent.
Given the limited supply of talent available in the market and the high competition among contact center firms for supply of workers, he said, investing in programs that keep employees satisfied with their job becomes even more important.
He said that contact center firms can for instance, provide spaces for recreation in the workplace such as gym, sports facilities and karaoke rooms, which their employees can use.
Contact center firms, he also said, can offer employees who cannot work overnight a daytime shift.
Career management programs, he said, may also be developed by contact centers for their employees.
He said that while investing more in employee-engagement programs may mean additional costs for the company, it is expected to yield results favorable to the company since its workforce is its main asset.
“We are not going to let price pressures get in the way of investing in our people. After all, happy employees translate to happy customers,” he said.
Contact Center Firms Urged to Invest More - by Louella Desiderio
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