Call Center Outsourcer Cuts Turnover and Saves Over $3 Million

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1 Call Center Outsourcer Cuts Turnover and Saves Over $3 Million

2 Call Center Outsourcer Cuts Turnover and Saves Over $3 Million 2011 BY THE DEGARMO GROUP, INC. All rights reserved. No part of the publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the publisher, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. For permission requests, write to The DeGarmo Group, 101 N. Main Street, Bloomington, IL Ordering Information: Tests published by The DeGarmo Group can be ordered by calling (866) Fit Index System is a registered trademark of The DeGarmo Group, Inc.

3 CASE STUDY The Company 3 The company is one of the largest providers of call center management and collection agency services in the United States. The Challenge The project was organized to study the effectiveness of DeGarmo Group s assessment solutions across locations and lines of business at the client organization. The company suffered from higher than acceptable rates of voluntary employee turnover. The project was complicated by the variety of different accounts managed by the company, and the varying demands that Customer Service and Collection agents would face depending on the specific accounts they were assigned to serve. Assessment Strategy DeGarmo Group implemented the Customer Service Fit Index (CSFI) and Collections Fit Index (CFI) assessments to identify and screen out turnover prone job applicants during the talent acquisition process. That is, candidates completed either the CSFI or CFI as part of their application for employment, but not both. The company opted for a single phase assessment strategy to help significantly reduce the high volume of candidates considered for interviews. Those candidates who were rated as Lower Turnover Risk or Marginal Turnover Risk on the assessment participated in an interview designed by the company, while those who were rated as Higher Turnover Risk were excused from the remainder of the process. The Customer Service Fit Index is part of the Fit Index System, which is a collection of occupationspecific assessments for primarily front line, customer facing positions, and designed to reduce employee turnover by measuring an applicant s tolerance for various job demands. Study Design For both Collections and Customer Service jobs, a group of applicants was hired without completing the appropriate Fit Index assessment. Separately, a group of applicants was hired after completing the appropriate Fit Index assessment, but the test results were not made available, and thus did not influence the hiring decision.

4 Assessment Impact 4 For the Customer Service Fit Index (CSFI), results indicate that applicants with a passing outcome have a 26% greater success rate than failing applicants. Two thirds (66%) of all control group applicants (i.e., who did not participate in the assessment process) terminated employment. The success rate for applicants who passed the Customer Service Fit Index was 26% greater than for applicants who were not tested. For Collections positions, results indicate that applicants with a passing outcome have a 17% greater success rate than failing applicants. That is, turnover was 17% lower among those who passed the CFI than for those who were in the control group. Return on Investment To estimate the gross return for the organization based on the implementation of DeGarmo Group s assessment solutions, we determined the reduction in new hires as well as the associated cost per person. Client leadership estimated that the average cost per hire for entry level call center employees is $800 per person. This estimated figure is far below the industry average for similar positions. Training for new hires is very minimal, which also may impact turnover rates. Since the system was implemented in 2007, this client organization assessed a total of 55,764 people with the Fit Index System. At a selection ratio of 3:1 during that time, savings is estimated to be $3,297,600 and at 2:1 savings equals $5,516,400.

5 Contact Information 5 Contact DeGarmo Group for more information on this case study or for information on the Fit Index or Fit Interview Systems using the information provided below. The DeGarmo Group, Inc. 101 N. Main Street Bloomington, IL (866) sales@degarmogroup.com