Why U.S. Call Centers Need To Invest In Early-Stage Retention

Nearly 3 million dedicated customer service representatives are located in the U.S., according to 2020 data from the Bureau of Labor & Statistics (BLS). Their median pay is just $19.08 per hour, and most of them have high school diplomas followed by short-term, on-the-job training.

Pathstream has unearthed intriguing insights into the challenge of early attrition for call center employees, a segment of customer service representatives. Leveraging external research from COPC, we discovered that a staggering 70% of all first-year call center attrition occurs during the first 90 days of employment – a period critical to both the employee and the organization. This insight is crucial for business leaders, as the financial impact of this early call center turnover can be considerable, potentially translating to losses of up to $1.7 million for a division with 1,000 team members.

Understanding these dynamics is key to fostering more resilient and effective call center teams, which will ultimately enhance employee satisfaction and organizational success.

Exploring The Roots Of Early Attrition In Contact Centers

The landscape for call center representatives in the U.S. is one of abundant opportunity, with a steady stream of job postings on LinkedIn and company boards enticing prospective team members with the promise of better prospects.

A seemingly minor upgrade – in terms of salary adjustment for inflation, the flexibility of a fully remote role, or enhanced career advancement opportunities – can be a pivotal factor for individuals whose earnings are generally under the $40,000 mark annually, influencing their decisions to stay or move on.

According to our market survey taken by Fortune 500 frontline business unit leaders, the average turnover rate for a frontline division in 2023 was approximately 19%. And 24% for call centers and customer service divisions. Leaders hope to get these numbers down to 13% and 15%, respectively, in 2024.

Despite high recorded attrition, most organizations don’t account for the attrition that happens before 90 days, since these employees haven’t fully been onboarded and trained yet. As a result, the recorded attrition is likely largely underestimated.

Much Of The Early Turnover Is Due To Ineffective Call Center Onboarding Processes

Many contact center leaders have attempted to solve turnover without successfully preventing early attrition within the first 90 days. Often, they overlook these early turnover figures, rationalizing them as an inevitable part of the process to eliminate unsuitable candidates. However, it's crucial that call center representatives are thoroughly and thoughtfully prepared for their roles rather than just going through routine procedural exercises and compliance training. 

A New Strategy To Reduce Early Attrition At Call Centers: Building Hope And Clear Career Pathways To Reduce Costs

Traditional strategies for combatting retention aren’t as effective at reducing early turnover, because they don’t actually relate to the problems experienced in the first 90 days, such as ineffective onboarding and mismatches between job descriptions and roles. Given the abundance of similar roles that exist elsewhere, if employees are allowed to be discouraged during their early days on the job, they will simply go somewhere else before they get too deep into the position.

In our extensive work with frontline employees at Pathstream, we’ve seen that the most effective strategy to reduce early-stage churn is to give your people hope in their future with you.

Organizations can give that hope by creating clearly defined, realistic career pathways. This empowers employees to envision a long-term future with the company and equips them with the knowledge of how to get there. 

Three Steps To Reduce Early Turnover Through Career Pathways:

• Ensure job descriptions accurately reflect the role responsibilities of your frontline teams
• Map out the internal growth opportunities that exist for level 1 and 2 employees and what new skills are required to get there
• Have frontline management communicate these career pathways with their employees during the onboarding process

Applying these strategies, especially in high-turnover environments like call centers, can lead to substantial savings. Our analysis has shown that the combined costs of hiring, training, and compensation during the initial 90 days amount to approximately $18,000 per frontline employee. So even if you’re only able to retain 5% more call center representatives by introducing attainable career pathways, in a division of 1,000 employees that’s nearly $1 million in cost savings!

Addressing Early Attrition At Call Centers Is A Strategic Investment

The phenomenon of high turnover within U.S. call centers should start being addressed within the initial 90 days of employment. But addressing early attrition requires more than conventional retention strategies. Early call center attrition demands innovative approaches that ignite hope and engagement among employees.

It's crucial for call center and business unit leaders to understand that fostering immediate, tangible career progression opportunities isn't just a morale booster – it's a strategic investment. At Pathstream, we've witnessed firsthand the transformative impact of integrating concise, early-stage retention strategies alongside more traditional approaches. The outcome? More vibrant, committed teams and significant financial returns.

Begin the shift towards a more sustainable, engaged, and cost-efficient workforce today. For a deeper dive into how these strategies can be tailored to your organization's unique needs, engage with our team of learning experts at Pathstream.