While doing some online research recently, I came across a list of 5 key metrics for business success within an industry that we tend to work with quite a bit here at Snowfly, namely contact centers. While I don’t disagree with any of the 5 key metrics (Quality Scores, First Call Resolution, Average Handling Time, Customer Satisfaction, Net Promoter) or even the intent of the list, I personally believe that success in ANY business, regardless of industry, can be boiled down to one overall key metric. In our experience with contact centers, and every other business type we work with, we consistently see one metric that stands head and shoulders above all others when it comes to indicating current levels of success within a company as well as predicting both short-term and long-term future success.
What is that ONE indicator of success you ask? Simple: Employee Turnover.
Why is employee turnover such an accurate measurement of business health and success for a company? Because engaged employees don’t leave their jobs. Engaged employees don’t get fired. Engaged employees are more productive and therefore generate higher revenues and profits for their employers. Engaged employees are less likely to be “downsized” or laid-off. Note the opening paragraph of a white paper entitled: “What Drives Employee Engagement and Why it Matters“ published by Dale Carnegie Training:
“What makes one company more successful than another? Better products, services, strategies, technologies or, perhaps, a better cost structure? Certainly, all of these contribute to superior performance, but all of them can be copied over time. The one thing that creates sustainable competitive advantage – and therefore ROI, company value and long-term strength – is the workforce, the people who are the company. And when it comes to people, research has shown, time and again, that employees who are engaged significantly outperform work groups that are not engaged. In the fight for competitive advantage where employees are the differentiator, engaged employees are the ultimate goal.” (emphasis added)
What does that mean financially to our economy? According to an infographic created by the Dale Carnegie Training company which cites the Bureau of National Affairs, it is estimated that $11 Billion is lost annually by U.S. companies because of employee turnover. So, what can be done to improve engagement with employees in the hopes of reducing turnover costs? The previously cited white paper from Dale Carnegie Training offers the following three key drivers for reducing employee turnover:
- Relationship with immediate supervisor
- Belief in Senior Leadership
- Pride in working for the company
Of these three key drivers, surveys conducted with over 1500 employees point to the relationship one has with his/her direct supervisor to being the most important. Think about that for a minute. We have all heard some form of the clichéd statement at one time or another that “People don’t leave jobs, they leave bosses” and the research backs it up. Costs associated with turnover rates are driven by a lack of meaningful relationships between a supervisor and his/her direct reports more than by any other factor. According to Dale Carnegie Training, 80% of employees who are dissatisfied with their direct managers are disengaged at work leading to lower productivity, lower job satisfaction, and ultimately higher turnover rates. Snowfly has known this and has been helping our clients combat this for years!
While having conversations with prospective new clients who are interested in learning more about the services we offer, we sometimes hear that these companies have annual turnover rates as high as 200-300%! According to statistics published by Zen Workplace, the cost to replace an entry-level employee is 30-50% of their annual salary (150% for mid-level managers and 400% for senior-level personnel). For a contact center with 100 seats and an average salary of $30,000 per agent, a 200% turnover rate is costing that business about $2 Million annually! Is it any wonder then that one of the first things our new clients ask us to help them target for immediate improvement is their turnover rate? For that same 100 seat contact center, a reduction of even just 10% in their turnover rate (down to 190%) could save them $90,000 in annual recruiting, hiring & training costs…money that can go directly back into efforts for improved retention, morale, employee engagement, and corporate culture improvements.
At Snowfly, our ultimate goal is to help every one of our clients implement a meaningful employee incentive rewards program that is self-sufficient by helping drive improvement of key employee performance metrics. Significantly reducing employee turnover rates is often one of the first targeted metrics to show improvement because our software is based upon behavioral psychology techniques and is specifically designed to increase employee engagement through repeated periodic interactions with their direct managers/supervisors, thereby inproving employee retention through increased job satisfaction. Snowfly’s gamification employee engagement and recognition software creates a sense of direct participation in the overall success of the company for each individual employee. Our clients report again and again to us that their employees are happier, more responsive, feel more connected to and appreciated by the company, and most of all, are receiving the approval and feedback they so desperately crave from their managers for the work they perform.
So, it’s time to ask yourself the following questions:
- What could your company do with all the money saved by reducing your annual turnover rates by 10%? How about 20%
- How much would an increase of 5%-10% in total company-wide productivity mean to your bottom-line?
- If you could change your internal corporate culture to one of employee empowerment and self-regulation, public recognition & praise, consistent celebration for a job well-done, and managers who spent a significant majority of their time on positive reinforcement and training instead of disciplinary issues and negative correction, what would your work environment feel like? What would your employees have to say about their jobs?
- If you knew that spending $100/month on incentives would increase the productivity output of an employee by $200/month while also saving over $500/month in average turnover costs, would you do it? Would you spend $100 to achieve a potential ROI of 700%?
Do you want to find out the answers to any of those quesitons above? If you are serious about changing the future success of your company by better leveraging your most important assets, your people, fill out our contact form today. Let us get to work building your customized employee engagement & incentive program using our innovatiive gamification recognition software today. It could be the best investment you make all year into the future success of your company!