Quote:
Originally posted by santunes
. You may want to consider what adding a dollar an hour to the CSRs salary would do to your turnover. It may reduce your turnover enough to compensate for your high recruitment and training costs. Or, you may consider offering an increase after 6 months or a year. This will usually encourage people to stay much longer if they have a goal i.e. salary increases after 6 months and again after 1 year, or they get bonuses after 1 year of employment.
Just some thoughts!
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Indeed - sometimes it is less costly in the long run to pay a little bit more. You can get better quality people who will be less likely to need as much oversight and "babysitting" and have less turnover. Of course, trying to convince upper management of this can be a challenge in many organizations.
My suggestion, however, would be
not to just give the extra pay increase across the board and hope it will somehow fix your attrition problem. Unless you are underpaying your people in comparison to other employment options in your market - or unless the extra pay will suddenly make them significantly better paid than any other employment options they might have in the market - chances are the impact on attrition will be temporary and minimal. The reason is because it does not take very long at all for an employee to become "comfortable" with a $1 per hour raise. Most people will simply increase their spending accordingly and have very little to show for it at the end of the day. Those that live paycheck to paycheck will most likely continue to do so. After a few weeks, the "good
PR" you received from the pay raise will be old news - and the very same factors that are currently driving your attrition will come back into play.
What I suggest instead is to channel the extra pay
only to those employees who stick around in the form of retention bonuses. For example, instead of a $1 per hour pay raise, you could give a $500 retention bonus to each employee after 6 months and on every subsequent half year anniversary and a $1,000 retention bonus after 1 year with the company and on each subsequent full year anniversary. $500 and $1,000 is a pretty significant windfall for most call center employees - and since most call center workers are not skillful at saving money, it is more than many would be likely to accumulate if it were instead paid out in small increments. Plus your bottom line rate per hour will be much lower than $1 - yet it will have more effect.
For example, a $500 six month bonus will cost you 48 cents per hour per full time employee. The $1,000 one year bonus will raise that cost to 96 cents per hour during the second six months of each year. However, averaged over the entire year, the cost is 72 cents per hour. And keep in mind that since
no extra money is given to those employees who do not stick around, the bottom line average rate per hour for the increase is actually even lower. Essentially, what you are doing is rewarding your stable employees by passing on to them some of the savings you realize by not having to constantly replace them. And, as an added bonus, receiving and seeing others receive nice periodic windfalls is good for morale - and that, in turn, will have an impact on attrition.
Now, one thing you will have to be prepared for is that, after people qualify for and receive their bonuses, you will see a small spike in attrition. But these are people who would have left anyway and probably ended up sticking around a few months longer than they otherwise would have in order to get the bonus. Furthermore, you will know ahead of time exactly how many people are due to bonus in any given month and, once you have a track record of how much of a spike it will be, you will be able to anticipate and prepare for this type of attrition well in advance.
One cannot emphasize enough how an extra $1,000 handed over in a lump sum makes a person earning a modest wage "feel richer" than if that same $1,000 were doled out in 48 cent per hour increments over the course of a year. My experience is paying the money out in a higher wage per hour has its biggest impact on the recruiting side. On the retention side, it is more effective to pay it out in lump sum windfalls.