The contact centre industry is challenged by high levels of staff turnover. A high employee turnover is costly as new staff need to be recruited and onboarded to replace staff who leave and disruptions to daily operations can impact productivity. So, what can contact centres do to manage the challenge?

In this blog, we explain the causes and impacts of high staff turnover and offer strategies to manage it. In the coming weeks, we’ll continue to explore factors that impact employee turnover including job satisfaction, employee experience (EX) and employee recognition.

Understanding staff turnover

Staff turnover refers to the rate at which employees leave a business – including voluntary and involuntary departures. It’s a metric that helps businesses to understand their recruitment and onboarding costs. It can also be used to flag other issues with job satisfaction and employee engagement.

It’s important to note that while high staff turnover is costly and generally viewed negatively, turnover in general is not always a bad thing. Job mobility is to be expected and turnover can bring fresh talent and new perspectives. In some cases, turnover is required for a business to achieve its goals. Undesirable turnover – when competent and capable employees are leaving at high rates – however, is an issue.

Voluntary staff turnover happens when employees leave by choice. Voluntary turnover typically occurs when people resign or retire. A high voluntary turnover rate can be a sign of organisational issues, such as problems with:

• remuneration – people often leave voluntarily to pursue better pay and if an organisation is not offering competitive salary conditions it will have trouble retaining competent staff
• job satisfaction – employees who are satisfied with their work and workplace are less likely to look for other work
• workplace culture – poor management or a toxic workplace culture will result in people leaving.

While some voluntary turnover is to be expected, high rates of people leaving voluntarily can lead to unpredictability and disruptions. Identifying and addressing the issues causing people to leave can help to prevent voluntary turnover, and helps to maintain stable operations and good employee engagement.

Involuntary turnover

Involuntary staff turnover happens when people leave an organisation due to a decision made by the employer. This typically occurs when roles are made redundant due to organisational restructuring or if employment is terminated due to employee performance issues and/or misconduct.
High involuntary turnover because of frequent restructures can result in organisational instability. High involuntary turnover due to terminations because of poor performance can indicate issues with recruitment, onboarding, understanding job expectations and appropriate training.

Managing high involuntary turnover requires an organisation to examine the underlying causes behind the turnover and to address these causes to create a more stable work environment.

Common causes of high staff turnover

High staff turnover can be the result of a range of factors. Research from the Australian HR Institute (2018) found that the top reasons employees leave organisations are:

• lack of career progression/opportunities – 63.2%
• better pay elsewhere – 48%
• new career opportunities – 44%
• poor relationship with supervisor/manager – 41.1%
• lack of training and development opportunities – 25.3%
• poor work-life balance – 17.2%.

Research published in the European Journal of Business and Management Research (Al-Suraihi et al. 2021) looking at turnover in Malaysian businesses found that the number one cause of employee turnover was training and feedback.

Recent research by Gallup (Tatel and Wigert 2024) on preventing voluntary employee turnover found found that the top three actions employers could have taken to prevent employees from leaving their jobs were:

• providing additional compensation/benefits – 30%
• facilitating more positive interpersonal interactions with the manager – 21%
• addressing organisational issues 13%.

The Gallup research also found that 42% of people who left voluntarily said that their departure could have been prevented and 45% said that ‘little was done by a manager or leader to discuss how their job was going’.

To prevent voluntary turnover, it’s clear that organisations need to address compensation and benefits, offer career growth opportunities and appropriate training, and ensure positive interactions with managers.

Poor compensation

Compensation relates to how people feel valued by their employer. Perceptions that remuneration is not competitive or unfair can quickly lead to job dissatisfaction. Competitive remuneration is a requirement for retaining good employees and people will change jobs to get better benefits and/or more money.

Lack of career development opportunities

Employees are more likely to seek opportunities elsewhere when they feel their career growth is, well … not growing. People want to progress and feel valued and a lack of a plan for advancement can mean that employees won’t feel like they have a future with their employer.

People are more likely to look elsewhere where their future might be brighter.

Lack of effective training

Ineffective onboarding and training in the early stages of a new job can quickly lead to dissatisfaction as employees feel unsupported and unclear about what they need to do. A lack of training and employee development to address capability and performance gaps impacts both businesses and employees.

Lack of regular, positive interactions with managers

Research has shown that improving the frequency and quality of interactions with managers can reduce turnover. People want meaningful time with their managers and infrequent and/or negative interactions can make an employee feel like they’re not valued.

What’s more, conversations with managers are closely related to the other turnover factors – training and development and career development opportunities.

Impacts of high staff turnover

A high staff turnover rate can have a range of negative financial, operational and cultural impacts. It can lead to increased recruitment and onboarding costs, loss of knowledge and skills, and reduced team morale.

Increased recruitment costs

High staff turnover significantly increases recruitment costs. Recruiting a new employee to replace someone who has left can cost about two times the departing employee’s average salary, when you consider advertising, recruitment, onboarding, training and getting new hires up to speed. Frequent hiring gaps create a financial burden and can impact profitability.

Loss of knowledge and skills

High employee turnover often results in the loss of valuable corporate knowledge and skills. When experienced employees leave, they take the expertise, skills and knowledge they’ve built up with them. This can impact customer service and daily operations.

Negative impacts on team morale

The departure of colleagues can lead to a decline in team morale, impacting overall teamwork and collaboration. People may feel overwhelmed and pressured into picking up more work to ensure work gets done, which can lead to lower levels of engagement and job satisfaction. A high voluntary employee turnover can have lasting impacts on workplace culture and morale.

High involuntary turnover causes remaining staff to feel a range of emotions from disengagement, anxiety, insecurity and perhaps even guilt.

Read Why employee retention is an enterprise risk for more on the impacts of employee retention.

What can you do to prevent staff turnover?

Reducing a staff turnover rate requires different approaches depending on the specific issues that are causing people to leave in high numbers. Addressing the most common causes of high voluntary turnover is a critical first step.

Provide competitive salaries

Regularly review and adjust remuneration strategies to ensure your organisation is competitive with others in your industry.

Providing competitive salaries is essential for retaining your top workers, and performance-related bonuses can be used to incentivise high-performing employees and reduce high staff turnover.

Foster career development

Managers and team leaders play a key role in supporting employees’ career progression goals with regular one-on-one meetings and conversations.

Using a tool like YakTrak ensures that team leaders have regular discussions with their people and can facilitate discussions about career next steps.

Invest in training and development

Professional development opportunities are essential for retaining employees. Opportunities to address capability gaps, learn new skills and advance personal and professional career goals can increase job satisfaction and help retain employees.

Read Is a lack of employee development driving high turnover? to explore the impact of training and development opportunities on staff turnover.

Embed regular coaching

People want meaningful time with their managers and managers play a key role in engaging employees, setting up development objectives and plans, closing capability gaps and discussing career progression.

Don’t leave training to formal out-of-the-office opportunities and don’t leave discussions about career development to annual performance reviews. Embedding regular coaching conversations between leaders and employees ensures that development and training are a priority while on the job (where it really counts) and makes it easy for employees to get the feedback and meaningful conversations with their managers that they’re looking for.

Setting up a regular coaching program, or cadence:

• ensures regular, meaningful discussions between employees and managers
• provides opportunities to learn new skills and practise new behaviours where it matters most – on the job
• helps build a proactive, genuine dialogue between managers and their direct reports.

YakTrak helps to create a regular coaching cadence ensuring that leaders check in regularly with their team members. It tracks progress towards goals so development doesn’t get forgotten about and captures the coaching conversations team members and leaders are having to ensure that dialogue is effective. It can make a real difference to your employee turnover rate.

Other factors impacting turnover rates

Low employee engagement, low employee experience and low job satisfaction can be factors involved in high employee turnover rates. Creating a positive culture, prioritising EX, lifting engagement and ensuring work-life balance can make a difference. Look out as we’ll be exploring these factors in the coming weeks.

The role of management in reducing staff turnover

Management plays a key role in reducing staff turnover. The actions and attitudes of managers impact how people feel about their workplace. Supportive leadership, clear communication with managers and professional development opportunities are essential.

Managers can prevent voluntary employee turnover by:

• regularly checking in with direct reports
• addressing the needs or concerns of direct reports
• fostering transparent communication and dialogue.

By developing dialogues with staff, managers can create an environment where employees are more likely to raise concerns and those concerns can then be addressed.

Regular check-ins

Team leaders are responsible for creating a positive work environment and can influence job satisfaction and employee retention through a simple step like incorporating regular check-ins with their team members.

A check-in could be daily or weekly, it could last from a few minutes to 15 minutes. It can help make employees feel valued and connected to their work and foster an environment where dialogue is open.

Regular coaching conversations ensure that goals remain in focus.

Clear communication

Clear communication is vital for addressing and resolving issues. Open lines of communication, including forums for employees to provide feedback, help to create a healthy workplace culture.

Managers should work to build open communication with strategies like regular team meetings and one-on-one check-ins.

Monitoring employee strategies

Monitoring and adjusting staff turnover strategies helps maintain a stable workforce. Evaluation and modification of strategies is essential as employee needs and market conditions change.

Data from exit interviews and regular surveys can provide information to help assess strategies.

Conduct regular employee surveys

You can measure the impact of initiatives by including relevant questions in semi-annual or quarterly employee surveys.
Regular employee surveys capture changing employee sentiments. Pulse surveys provide real-time insights into employee satisfaction – a key indicator of how your employee turnover strategies are going – and highlight immediate areas for improvement.

Track employee turnover metrics

Tracking employee turnover metrics helps HR spot problems. Analysing attrition data, including departmental turnover rates, helps HR understand where there are specific issues.

Regularly monitoring these metrics helps organisations make informed decisions to improve their employee retention strategies and reduce overall turnover rates.

A good employee turnover rate will be dependent on your industry and competitors.

Ready to get on track with the Yak? Get in touch with us today to find out how YakTrak can help make daily coaching a habit in your business.

Main image by Tima Miroshnichenko, other images by Anna Shvets via Pexels

Al-Suraihi WA, Samikon SA, Al-Suraihi AA and Ibrahim I (2021) ‘Employee turnover: causes, importance and retention strategies’, European Journal of Business and Management Research, 6(3):1-10. https://doi.org/10.24018/ejbmr.2021.6.3.893

Australian HR Institute (2018) Turnover and retention research report, Australian HR Institute website, accessed 7 September 2024. https://www.ahri.com.au/wp-content/uploads/turnover-and-retention-report_final.pdf

Tatel C and Wigert B (10 July 2024) ‘42% of employee turnover is preventable but often ignored’, Gallup Workplace, accessed 7 September 2024. https://www.gallup.com/workplace/646538/employee-turnover-preventable-often-ignored.aspx

Frequently asked questions

How do you calculate employee turnover rate?

You’ll need to calculate your staff turnover rate and compare it to others in similar industries to understand if you have a high employee turnover. You can also assess your organisation’s current employee turnover rate against historical turnover rates.

To calculate staff turnover, divide the number of employees who left during a specific period by the average number of employees for that same period and then multiply the result by 100. You don’t generally include people who have moved internally within an organisation (e.g., promotions, internal transfers).

For example, a contact centre wants to look at its employee turnover rate across the year. First, it needs to calculate the average number of employees over the year. At the start of the year, it had 200 employees and 246 employees by the end of it. To calculate the average number of employees it adds the 246 and 200, then divides the total by two:

246 + 200 = 446
446 / 2 = 223

Next, it divides the number of employees who left by the average number of employees and multiplies that answer by 100 to get the annual turnover rate percentage. Sixty-six people left the contact centre in that time, so:

66 / 223 x 100 = 29.6%

How often should you calculate employee turnover?

You can track the turnover rate monthly or annually.

Monitoring monthly turnover rates can help businesses detect fluctuations and respond quickly to issues with preventative measures.

Annual turnover rates can help with long-term planning and strategy development. Monitoring annually can be useful for dealing with persistent issues and can guide strategies to improve retention.

Either way, monitoring rates is essential for helping to reduce turnover costs.