The Human Capital Management Conundrum

I was chatting with a longtime friend of mine last week and the subject turned to human resources, or human capital management, in the contact center.  Kevin Hegebarth is the vice president of marketing at GMT Corporation in Atlanta and has spent most of his career in the contact center business.  So I often get into business-related topics with Kevin even when we chat informally.

Kevin’s position is that the proper selection and hiring of employees in the contact center is a key, and often overlooked, aspect of a successful workforce optimization strategy.  He argues that unless a contact center ensures that the right people are coming through the door, and provides those people with an ongoing workforce development program designed to keep those key people in the organization, other workforce improvement or optimization strategies will suffer.  Sound logic.  I can’t argue with it.

Recruitment, selection and hiring in the contact center has always been, in my mind, something of a conundrum.  Agent turnover has always been the bane of the industry, yet the industry at large seems unwilling to address the problem.  A few years ago a company that was highly successful in helping companies in other industries with recruiting and hiring strategies started a division that focused on the contact center.  I worked with this company for a year trying to get the attention of contact center human resources professionals.  This company had excellent software that had been tested, honed, refined and used successfully in other industries for years.  It was a proven product based upon sound human resources and psychological principles. 

Within a year the company was out of the contact center business.  In fact, the two principals of the division threw up their hands in frustration and, I kid you not, moved to the Turks and Caicos Islands never to see the contact center industry again.  The industry simply would not buy into the need to carefully screen potential employees to ensure a proper fit in the organization.  Instead the overriding strategy seems to be to keep a steady stream of warm bodies coming through the door so there is an ample stockpile of available agents to replace the average 40 percent of the workforce that turns over each year.

I think Kevin’s heart is in the right place and I like GMT’s position on the importance of human capital management.  I wonder, though, if their efforts to spotlight recruitment and selection in the contact center will fall on deaf ears as other efforts have in the past, or if in the evolution of the customer service industry the contact center is finally ready to address the issue of agent turnover and embrace a solution.

I’m still at a loss to understand how the industry in general has become so complacent when it comes to personnel turnover rates.  Is high turnover so deeply ingrained in the contact center industry that it is considered unavoidable?  Is it a unique aspect of the customer service industry that considered a necessary cost of doing business?  Is it a simple fact of business life that is too much trouble to try to change?

We welcome your comments on the issue of human resources practices and agent turnover rates in the contact center industry.  Just click the link below and tell us what you think. 

Comments

[David Filwood]

Top 5 Reasons Why Call Centers Aren’t More Selective When Hiring

My name is David Filwood, and I am the Principal Consultant with TeleSoft Systems, and a NACC Advisory Board Member. We also are the publishers of SPAS – Service Personnel Appraisal Software – a suite of Call Center Agent Pre-Employment Screening Instruments http://www.telesoftsystems.ca/64201.html.

Over the years, I’ve worked with many Contact Centers - in a Variety of Industries - and I’ve learned that despite the proven Return on Investment of Call Center Agent Pre-Employment Screening, many Contact Centers still choose not to adopt this technology.

Why?

There are a number of reasons I consistently hear. Here are the Top 5 Reasons – and why I believe they are generally incorrect.

[1] “There Aren’t Enough People Applying to Fill the Open Positions We Have Now - and Testing Will Only Make The Problem Worse.”

This can be True – to a Point.

Your Initial use of a Call Center Agent Pre-Employment Screening Instrument will tend to increase your Recruiting Needs – especially if you’re currently hiring just about everyone who shows up for an interview. So initially you will have to increase in your Candidate Pipeline - as deploying Call Center Agent Pre-Employment Screening is going to make you become more selective in who you offer a job to. But by using a Validated Call Center Agent Pre-Employment Screening Instrument, you will wind up hiring better, more qualified Call Center Agents - which will quickly reduce your overall turnover, increase Agent productivity and enhance overall Call Center performance.

[2] “Poor Agent Retention is Just Part of The Business – We Can’t Really Change It.”

This is a Very Common Belief.

Yet hiring the wrong Call Center Agent is clearly a significant drain on the Bottom Line, on Productivity, on Customer Satisfaction, and on overall Agent Team Morale. I’ve encountered many Call Centers with Low Turnover and they have a number of things in common. One of these is the belief in the importance of weeding out Job Candidates who will burn out fast because they aren't suited for the work, and only hiring the people with the Personality/Job Fit, Skills, Motivation, and Work Ethic to be Top Call Center Agents. Top performing Call Centers drive their Revenue and Performance through superior hiring tactics. By deploying Call Center Agent Pre-Employment Screening, your individual Agent Productivity will go up - and your turnover costs will go down.

[3] “We’re Afraid that Testing Will Turn Off Our Candidates.”

Industrial Psychologists have conducted substantial research on this issue and found that Job Candidates for Call Center Positions are generally more favorable towards Companies that test than those that don’t test.

Why?

Because it sets the stage for what’s to come – it depicts you as a Company that wants to Hire the Best – and suggests that the Candidates you do Hire are Above Average. By deploying Call Center Agent Pre-Employment Screening, you will be viewed as an Employer who makes the investment in selecting New Call Center Agents who fit your employment needs better, and who therefore stay on the job longer. You will be an Employer with a winning Agent Workgroup – an Employer with a Call Center Agent Team that has more experience and is more productive.

[4] “We Don’t See a Strong Relationship between Pre-Employment Screening and Bottom Line Job Performance.”

Traditional Interviewing (over the phone & face-to-face) continues to be the most commonly used Selection Technique in Call Centers today, despite their Subjectivity, Inaccuracy and Time-Consuming nature.

Yet in study after study on the Comparative Validities of a variety of Predictors for Hourly-Wage Jobs, it is consistently demonstrated that Personality/Job-Fit Assessment is far more effective than traditional interviewing techniques. Validity refers to the ability of each predictor to correctly forecast subsequent success on the job. Our SPAS Call Center Agent Pre-Employment Screening Software is a Proven Technology - specifically designed and used for over 15 years to make accurate hiring decisions for tens of thousands of Potential New Hires. Its reliability over time and Predictive Validity has been demonstrated in Studies for numerous industries. The development of SPAS was based on the fact that Personality/Job-Fit Factors are most important to success in a telephone-based job. In other words, a Job Candidate may have the Skills & Product Knowledge but not the Personality/Temperament/Job-Fit to perform long-term in your Call Center. SPAS Call Center Agent Pre-Employment Screening Software gives you the ability to distinguish between Job Candidates who will be High and Low Call Center Agent Performers.

[5] “The Cost of the Selection Tests Seems Too High and/or Our Call Center Is Too Small.”

You may have felt that the Cost of Selection Tests seemed Too High, or that your Call Center was Too Small.

It’s a relatively simple process to conduct a Cost Benefit Analysis for implementing a Pre-Employment Screening Solution when the Costs of Recruiting, Hiring and Training is known or can be estimated. A review of Call Center Industry Literature suggests that the Cost of Turnover is generally about 1.5 times the Monthly Salary of the departing Employee - but this figure can vary widely based on the nature of the job and the organization. Call Center Agent Pre-Employment Screening Software is a very Cost-Effective Solution to help your Company avoid these Turnover Costs.

A Single SPAS License costs $995. - and only need to buy a SPAS License once – it is for Unlimited Usage - there are No “per Test” Fees – “Annual Renewal” Fees or any other Usage Fees whatsoever. Assuming the "1.5 times the Monthly Salary of the Departing Employee" Rule applies for your Call Center - and that the Average Monthly Salary for one of your Call Center Agents is only $10/Hour ($1,600/Month) - then avoiding even a Single “Quick Quit/Fast Fire”, or Bad Hire, will save your Company at least $2,400 in Annual Turnover Costs. By avoiding even a single “Quick Quit/Fast Fire”, or Bad Hire, it becomes very easy to cost-justify a One-Time Investment of $995.in Call Center Agent Pre-Employment Screening - and that’s without factoring in any of the gains associated with Increased Agent Productivity, Higher Levels of Customer Satisfaction and enhanced overall Call Center Agent Team Performance.

So those are the Top 5 Reasons I’ve Found for why Companies choose not to adopt Call Center Agent Pre-Employment Screening Technology.

I would be Happy to Prove to any reader – in Advance and at No Charge – that our SPAS Call Center Agent Pre-Employment Screening Software Will Work for their Contact Center Environment s well.

Just eMail me with your request for a Free Trial of SPAS. You can also find out more about SPAS on the NACC Supplier Page http://www.nationalcallcenters.org/supplier-hiring-assessment.html.

Regards.

David Filwood
Principal
TeleSoft Systems
604-986-4116
david_filwood@telesoftsystems.ca
www.telesoftsystems.ca

[Rick]

Like any resource management effort, I believe the success lies in how we manage the entire lifecycle of the resource. In this case we are talking about human resources in an environment where a vast majority of the resources are transient by nature. Most folks don't hire on in a contact center as a career or profession (although I've awarded 10 and 15 year tenure awards to agents in my career). Given the average tenure is between 1 and 3 years (my own experience), the question becomes how do we spend enough to make them effective and efficiently productive but not so much that we spend too much that we don't get the return on investment given the 1 - 3 year tenure.

I am clearly in the camp of "hire right" and recently viewed firsthand how the process brings in a higher caliber agent leading to higher productivity, lower churn, an overall increase in the morale of the organization as a whole and imporved operating results. We did this by gathering our best and brightest agents to identify and document charactaristics that made them successful. Integrating these findings into the recruiting and hiring process had an instant impact on the agents we were hiring. On top of changing the recruiting and hiring process, creating a career ladder that makes sense to the whole origanization and leveraging a training strategy to complement the career ladder further enable successful stability and results within the centers.

It seems so straightforward yet not so commonplace. In my opinion, the challenge is in our collective ability to quantify the benefits of training. This is not a unique issue as training and development ROI has eluded a good many companies large and small. I believe the answer lies in the community at large developing the models that show benefit to the business and the individuals independent of trying to sell more hardware, software, middleware or anything else that makes the conversation self serving versus benefiting the wider business (I am certainly not knocking those who sell the above -wares, just advocating a broader dsicussion and solution).

I've seen this work well. Quantifying the possibilities will make it work on a scale that is meaningful to the contact center industry overall.