Attrition in BPO: A Deep Dive into Employee Turnover

Attrition is common among frontline employees – especially in the BPO. But why is attrition in the BPO so high, and what can leaders do to curb it? In this article, we’ll cover the types and causes of attrition in a BPO, how to calculate it, the impact of attrition, and strategies to retain employees.   

Types and Causes of Attraction in the BPO 

There are different types of attrition in the BPO. Below are a few types and the reasons behind them: 

Voluntary attrition is when employees separate from the company on their own accord and can be attributed to any number of personal and/or professional factors.
Involuntary attrition applies to situations such as terminations and layoffs and is typically related to performance, misconduct, workforce optimization, or economic factors.
Early attrition occurs when employees leave the BPO soon after their hire date, or don’t show up for their first day (also known as first-day ghosting).  
Late attrition occurs when employees leave the company after an extended period, typically after several years. 
Demographic attrition can reveal if a specific demographic or group (e.g. newly hired agents in a specific age group or role) leaves at a higher-than-average rate.
Skill-based attrition happens when employees leave due to a desire to acquire new skills or because they believe their current skills are not adequately utilized or developed within their current BPO. 

There are multiple reasons for overall voluntary attrition in a BPO. First-day ghosters might decide to accept another offer with better compensation, scheduling, or commuting time. Job shock (where the role didn’t align with the description), a lack of feedback, and a bad onboarding experience also contribute to early attrition in a BPO.  

Other top reasons for overall attrition in a BPO include poor training and coaching, a bad culture, micromanagement, a lack of a career path, burnout, and disengagement from the company, their work, their team, and/or their manager. Additionally, agents may opt for a career change and leave the industry entirely.  

Calculating the Attrition rate in a BPO 

Calculating the attrition rate in a BPO involves a little research and plugging stats into the following formula: 

Attrition Rate = (Number of Employees Who Left During a Specific Period / Total Number of Employees at the Beginning of the Period) x 100 

Here’s how to calculate the attrition rate step by step: 

1. Decide on the specific time frame for which you want to calculate the attrition rate, e.g., monthly, quarterly, or annually. 
2. Count the number of employees who left the BPO organization during that period, including resignations, terminations, and other departures. 
3. Determine the total number of employees within the organization at the beginning of the chosen period, such as full-time, part-time, and temporary staff. 
4. Calculate the attrition rate with the above formula, then multiply the result by 100 to express it as a percentage. 

Let’s say you had 30 employees leave your BPO during the last quarter, and you had 1,000 employees at the beginning of that quarter. The formula would read: 

Attrition Rate = (30 / 1,000) x 100 = 3% 

So, the attrition rate for that specific quarter is 3%. 

What Is the Average Employee Attrition in BPO Rate in the Contact Center Industry 

The average employee attrition rate in BPOs can vary; overall, BPOs tend to experience higher attrition rates compared to many other industries. This is largely because the work can be demanding and high stress. However, according to McKinsey, annual contact center attrition is up to 60%. 

Consequences of Attrition in BPO
Consequences around attrition in the BPO include: 

More recruitment costs
Depending on factors such as time at the BPO, role, and geography, McKinsey estimates that it can cost between $10K and 20K to replace each agent.  

A knowledge and skill gap
Any departing employee (especially veteran employees) takes their knowledge about the products, services, systems, processes, customer preferences, and other experience and skillsets with them.  

Increased training time 
With turnover comes the need to train and coach new agents. While this is critical, constantly training and coaching new agents can impact other employees and business priorities, especially in smaller BPOs and those with tight resources.  

Decline in service
While BPOs race to fill seats and new agents work to become proficient, there will be a gap in consistency and overall quality of service. This includes errors, extended hold times, ineffective issue resolution, etc. 

Damaged relationships and reputation
The consequences of high attrition rates in a BPO will culminate in a poor customer experience, potentially resulting in lost business and brand damage.  

Client Churn
All of the above can lead to clients leaving the BPO and taking their business to a competitor. 

How to Deal with Attrition: 5 Strategies to Reduce Attrition in BPO 

There are many causes for attrition in a BPO, but there are just as many ways to prevent it. A few examples: 

Align the role with its description 
To avoid job shock (a major reason for attrition), ensure that the job description is crystal clear and aligns with the role and the expectations around it.  

Make preboarding connected and personal
The time between the offer and the first day is an attrition “danger zone.” Connect new hires with the team and company before they start with introductions, engaging microlearning modules, and branded swag, such as tee shirts, water bottles, etc. 

Invest in training
Good training helps retention. Consider implementing targeted AI microlearning as part of a robust training program. Microlearning delivers “snackable” learning modules within the flow of work, helping to reinforce knowledge and fight the forgetting curve. Incorporating AI helps to easily target learning and performance gaps, thus triggering relevant training materials. 

Create a culture of learning
In addition to a thorough training program, we recommend encouraging social learning opportunities, such as employee contributions. This not only helps bring new hires to proficiency faster but creates a sense of community and cultural inclusion. 

Help the coaches coach
High attrition in a BPO can add to a supervisor’s workload. Implement solutions that make their day easier by streamlining coaching session-related admin work, and providing customized insights that help managers prioritize who to coach and recognize.   

Give agents and supervisors transparency and insights
Agents may leave because they’re not receiving feedback. Providing real-time performance insights helps agents and their supervisors identify any gaps and determine the next best steps, including targeted learning and coaching. 

Provide clear learning and career paths
Modern frontline employees are looking for more than a paycheck – they want professional growth and to meaningfully contribute and feel valued. Mapping out personalized learning and career paths will go a long way to retaining employees.  

Gamify the experience 
Gamification is the application of game mechanics (such as leaderboards, badges, points, etc.) to a non-game context, such as a BPO workflow. When tied to goals such as KPIs, sales, and other key metrics, gamification helps keep employees motivated and engaged, leading to better performance and lower attrition.  

Focus on the human aspect
Customer expectations are rising, and so is burnout. A human-centric, empathetic approach can lead to stronger agent-supervisor relationships and happier, productive, and retained employees. (Tip: Happy agents = happy customers, which = happy clients!) 

Meet Centrical — #1 Performance Management Gamification Platform 

Centrical’s Employee Performance eXPerience Platform provides a robust solution that helps mitigate the risk of contact center attrition across the employee lifecycle. Our platform includes real-time performance insights, AI-powered microlearning and training content creation, augmented coaching, and employee wellness. This is all tied together with advanced gamification to keep employees connected, engaged, performing, and retained.  

Ready to level up your BPO’s retention rates? Watch our platform in action. 

Summary and Takeaways 

We’ve just covered a few basics around attrition in the BPO, including root causes, consequences, and how to boost employee retention. A few key takeaways: 

• Attrition is costly, and rates are high in the BPO industry. But attrition is also preventable.  
• Types of attrition in the BPO include involuntary, voluntary, early, late, demographic, and skill-related attrition. 
• Top reasons for attrition in a BPO are poor pre-boarding and onboarding experiences, micromanagement, a lack of a career path, and burnout. 
• Consequences of attrition in a BPO include high costs, decreased service levels, knowledge and skill gaps, brand damage, and high customer churn.  
• BPOs can curb attrition rates with various strategies, such as gamification, optimizing the pre-boarding and onboarding experience, strong training, and mapping out career paths for agents.  

For over a decade, Centrical has helped organizations across the globe, including BPOs, boost employee engagement, performance, and retention rates. To learn more about how we can help your BPO, watch a quick preview of our platform in action or request your personalized overview today.