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The High Cost of Employee Dis-engagement

Agent Satisfaction Performance

If you care about sales or customer service levels – and I think we all do – then you should care about how your agents feel about their job. For this reason, many call centers are turning their attention to employee engagement. In our most recent study of nearly 120 call center and BPO firms, we found that 76% of call centers conduct an employee survey to measure and improve engagement1. Unfortunately, most managers then focus on the wrong group of employees for action. The tendency is to try to maximize the number of highly-engaged in a call center. But managing employees out of disengagement can be just as important to a company’s performance – sometimes even more so.

The business case for employee engagement is often couched in terms of effort and performance. Highly engaged employees are willing to invest more of themselves in their jobs, give more discretionary effort, and go that extra mile when needed. In 2004, a study by the Corporate Leadership Council of over 9,000 hourly employees in 36 companies showed that highly engaged employees gave 59% more effort and performed 18 percentiles better than their disengaged colleagues2. So managers often focus on getting their teams into that “highly engaged” group.

If you imagine a distribution of employees by their engagement levels, you’d see a bell curve in almost every call center. There are few highly engaged (around 15%), a few highly disengaged (also about 15%), and a whole lot more or less in the middle. Most managers spend their time maintaining the percentage of highly engaged, and trying to migrate the middle (those “on the fence” about committing to the company) into that engaged category. They overlook the disengaged...and at their peril, because there is a real and heavy cost associated with this group.

The costs associated with disengagement stem from two factors: turnover, and lost productivity. The disengaged are between 3-5 times more likely to leave the company than your average employee. The Corporate Leadership Council found that disengaged employees have a 23% probability of turnover within 12 months, compared to less than a 1% probability among highly engaged employees. Think about what that means in the context of a 1,000-seat call center. Assuming an average 15% population of disengaged employees, 35 are likely to leave in the next year simply as a factor of disengagement. That amounts to roughly $158,000 in turnover costs alone.

But much more disturbing are the costs associated with disengaged employees that stay with our companies. Their effect on lost productivity can be a silent killer. Intuitively, we might feel that disengaged employees just aren’t as productive: less innovation, less follow-up, higher absenteeism, etc. However, the data is clear. Disengaged employees cost their employers on average 46% of their salaries in lost productivity.

That’s a big number so you might want to know how we get there. In a recent study, Gallup found that 15% of US workers were disengaged and estimated that the lower productivity of disengaged workers cost the US economy approximately $328 billion.3 If you divide the lost productivity ($328 billion) by the number of disengaged employees (20.6 million), you get a per employee cost of $16,000. That dollar figure is an average of all positions and levels, so convert it into a salary percentage by dividing it by the average median salary that same year according to the BLS (16,000/34,892 = 46%).

Let’s go back to that 1,000-seat call center. Assuming the same 15% disengaged population and an average annual agent salary of $30k, disengagement costs that same call center $2.07 million on lost productivity in just one year.

The total costs of disengagement for that call center – including turnover and lost productivity – amount to $2.23 million. You can see why we want to pay attention to the disengaged.

So, given the high cost of disengagement, what can we do about it? Here are 5 Tips for eliminating disengagement in your call center:
  1. Create a Connection Between Work & Company Success
    Employees’ commitment and effort increases when they feel their work is a part of something bigger than themselves. Show agents how their daily work contributes to the vision and financial success of your company. Case Study: Stryker Corporation uses business metrics as a vehicle to show the importance of employees’ jobs. Team leaders explain business metrics, show employees hands-on how their work affects those metrics, and hold team meetings to discuss metrics and how they can be improved. Employees own a monthly presentation to executives where they are responsible for reviewing metric performance. As a result, Stryker consistently measured in the top percentiles on Gallup’s Q12 engagement questions.4
  2. Show a Commitment to Employee Development
    Engagement is a two-way street. If you want employees to commit to the organization, show that the organization is committed to its employees through a visible (and actionable) career development program. The Corporate Leadership Council found that effective career advisors increased engagement levels by over 35%. Case Study: First USA created a culture of development by increasing the awareness of potential career opportunities, facilitating new roles, and balancing development with business needs. Call centers held career development workshops each month to identify capability gaps and begin development planning. Employees had to meet eligibility criteria to participate, and sessions were scheduled around times with low call volumes. Each call center also facilitated onsite developmental rotations, and built a “Career Resource Center” on the floor that was always open with resources, tools, and space for workshops. As a result, employee satisfaction scores increased 25% and staff retention increased by 39% (leading to replacement cost savings of $1.5 million).
  3. Ask for Employee Feedback and Ideas
    Call center teams want to do more than work, they want to contribute. Employees have intimate knowledge about the business – especially about sales pipelines, customers, and internal processes. Their honest feedback can revolutionize performance and lead to innovation. You just have to ask. Go beyond the “comment box” and have a genuine and honest conversation with your team. You both deserve that level of respect.
  4. Set Expectations about Performance
    Employee engagement increases substantially when employees have a clear understanding of their job and how they will be measured. Clearly define job expectations, establish clear and measurable performance criteria, break down any projects into manageable components, and ensure employees understand the purpose of their work. Teams just want to know the rules of the game and have clarity about how to succeed. If you provide that, their commitment will rise (by over 36%!).
  5. Establish a Clear Value Proposition
    Employee engagement is built on a level of respect between the employee and employer. Without that respect, the employee can never fully commit to the company. Build a foundation of respect by establishing a clear value proposition that details the job environment that you will and won’t provide as an employer. Case Study: Wendy’s uses employee feedback to create a series of guidelines (employment “promises”) that engages and retains both frontline employees and managers. Wendy’s conducted focus groups with employees and managers to identify factors affecting job satisfaction (quality of interview, quality of onboarding, quality of scheduling, etc.). They consolidated the feedback into a series of “employment promises” to its hourly employees, and provide managers with training and support to ensure these promises are delivered every day. As a result, hourly employee turnover decreased by 25% and manager turnover decreased by 45%.
CallMe! provides expert support to call centers at every stage of the talent lifecycle. Learn more about how CallMe! helps call centers lower the cost of disengagement here, or contact us at info@callme.io to discuss how your business can improve the returns on its human capital investments.

About the Author:
RJ Milnor RJ Milnor is a Managing Partner at Call Me! He will be presenting at the Contact Center Conference Fall 2011 in Phoenix, Arizona, October 3-6. Learn more about his session: 702: The 5 Human Capital Metrics that Every Call Center Needs

1 CallMe! 2011 State of Call Center Human Capital Survey.
2 Corporate Leadership Council, Engaging the Hourly Workforce, Washington: Corporate Executive Board (2004).
3 Gallup Management Journal, “Engaged Employees Inspire Company Innovation” (12 October 2006).
4 Corporate Leadership Council, The Hourly Employee, Washington: Corporate Executive Board (2002).



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