The Shocking Truth about Cost of Contact Center Attrition - TELUS International Europe

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  • The Shocking Truth about Cost of Contact Center Attrition

    cost of contact center attrition

    February 26, 2014

    Understanding how attrition impacts both costs and revenue is a solid step towards better managing contact center business outcomes. Check out our article What are the Business Impacts of Contact Center Attrition to find out the cost components of contact center attrition.

    A different methodology assessing attrition

    Everest Group conducted a study with the purpose of assessing the business impacts of contact center attrition by using a methodology which breaks down the impact of attrition to the level of the individual contact center customer service representative, showing how the departure of a given individual generates a series of cost and revenue associated outcomes. Check out the study here.

    A cost-breakdown of a customer service representative

    Based on the research, Everest found that of the total operational costs associated with an individual customer service representative, about 6 to 9% come from attrition-related costs. The remaining costs are salary/benefits, infrastructure, and other miscellaneous costs.

    If we take the case of an onshore/U.S.-based center in a tier-1 location and a customer service representative whose total cost is roughly US$68,000 – 70,000, on an annual basis, the contact center attrition costs for that individual will be about US$3,800 – 6,200.

    Of that 6 to 9%, recruitment and onboarding costs are the biggest components while other elements (governance, fill-in/overtime, and productivity lag) contribute the remaining overall attrition cost.

    By making a cost-breakdown for each individual, recruitment and onboarding costs are the biggest pieces, accounting for 62 to 70% of overall attrition cost, while other elements (governance, fill-in/overtime, and productivity lag) contribute the remaining 30 to 38% of the overall attrition cost.

    Is there a “good” contact center attrition rate?

    It is important to note that too low a rate of attrition could also lead to potential cost (e.g., cost of retaining poor performers). Thus, a threshold rate of attrition is desirable to retain efficiency in the delivery system. While it is hard to estimate a “good” attrition rate as it varies by type and nature (e.g. transactional, complex) of services delivered, estimates suggest 15 to 20% of the total cost of attrition corresponds to desirable attrition, thereby reducing the net cost impact.

    Keep an eye on other team metrics

    Increases in cost and decrease in revenue due to contact center attrition together could potentially lead to a significant loss in value-add to a business. However, it is important to note that apart from attrition, there are additional “team metrics” (e.g., employee engagement, absenteeism, and adherence to schedule) that impact customer experience and, therefore, business outcomes.

    For more insights on the topic you can download the research below!

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