In this White Paper, we will provide two examples illustrating the link between poor employee performance and high attrition. We will then suggest some strategies and tactics to improve your ability to select candidates that will be high performing employees with longer retention.

1. WHITE PAPER
Reducing Your
New Hire Turnover
Understand the Link Between
Poor Performance and
Higher Attrition
888 626 3412 Toll Free info@furstperson.com furstperson.com © 2011 FurstPerson. All Rights Reserved.

2.
Introduction
Many high-performing organizations have established key objectives for their frontline
employee hiring processes. With the growth of “big data,” application of technology, and
closed-loop analytical models, the tools and methods are in place to consistently achieve
these objectives.
In many cases, these objectives can be summarized in three categories:
1. Contribute towards improving Quality of Hire. Quality of hire is defined as selecting an
employee who has a greater probability of meeting or exceeding the organization’s
production goals. For contact centers, examples include:
a. Call control measured via Average Handle Time (AHT)
b. Customer experience measured via issue resolution or customer satisfaction
(CSAT)
c. Sales measured via revenue per call
d. Retention measured via save rate
2. Reduce attrition and maintain retention improvements
3. Create a financially advantageous partnership between recruiting/human resources and
business units
a. Meet recruiting needs to avoid lost opportunities with open production positions
b. Drive towards a lower cost per hire while improving quality of hire
c. Focus on improving the ROI to the business year over year
In this discussion, we will focus on the intersection of quality of hire and attrition. Attrition
is a major operating cost for hourly employers. For example, in the contact center industry,
FurstPerson’s research shows that the average per agent cost of attrition is $4,285. A
major focus of human resource, recruiting, and operational leaders is to reduce attrition
costs. Often, the link between employee performance and attrition is overlooked. However,
poor employee performance is a significant contributor to high attrition.
In this discussion, we will provide two examples illustrating the link between poor employee
performance and high attrition. We will then suggest some strategies and tactics to
improve your ability to select candidates that will be high performing employees with longer
retention.
Performance and Attrition – What is the story?
Typically when attrition is analyzed, a significant focus is placed on behavioral based turnover
that results in voluntary attrition. For example, the classic “no call, no show” or “job
abandonment” are common reason codes on turnover reports. Based on our research and
experience, poor performance is often a significant contributor to attrition – both voluntary
and involuntary. In some cases, poor performers, expecting to be disciplined for their poor
performance, abandon their jobs. In other cases, poor performers are released from their
jobs due to their performance. Hiring organizations have an opportunity to focus on
selecting candidates who have a better probability of higher performance on the job. The
result will be overall lower attrition.
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Before creating a hiring model, hiring organizations should consider investing time to
understand the relationship between performance and attrition in order to embed those
findings in the hiring model. The analysis below provides a framework for influencing future
selection models because we can identify the relationship between performance and attrition.
Going forward, the goal is to create a hiring and selection model that eliminates potential
poor performers from consideration, which will impact the business in two critical ways: (1)
by enhancing the overall performance of retained employees and (2) by reducing the attrition
that can be attributed to poor performance. Two case examples will help illustrate this point.
Example 1 - Technical Support Job Family
In this first example, we consider an inbound technical support role. Over 1,000 agents are
in the sample. The two metrics for review are Average Handle Time (AHT) and Sales
performance. AHT represents a common call control metric used by many contact center
leaders to evaluate production capabilities. Sales revenue represents the growing use of
contact centers as a revenue driver for the business.
In graph 1 below, we examine Average Handle Time (AHT) and Attrition. We see several
trends which need to be addressed in the hiring process. The bottom line – poor performers
have higher attrition.
 Poor performers (AHT > 850 seconds) have a 71% higher term rate at 90 days
 Average AHT for those who leave = 909 seconds
 Average AHT for those who stay = 841 seconds
Graph 1 – Inbound Technical Support: AHT compared to Attrition
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In graph 2, we compare Sales Revenue and Attrition and see a repeat of the AHT issue. Poor
performers in sales revenue have higher attrition rates.
 Poor performers (Sales revenue < $100) have a 233% higher term rate at 90 days
 Average Sales Revenue for those who leave = $87
 Average Sales Revenue for those who stay = $143
Graph 2 – Inbound Technical Support: Sales Revenue compared to Attrition
Key Findings – Technical Support
 Employees with AHT greater than 850 seconds and average sales revenue less than $100
are 277% more likely to term in their first 90 days.
 This analysis demonstrates an opportunity to create a financial gain by:
o Identifying job candidates who can manage their calls better (AHT) while
generating more sales revenue.
o Understanding the behavioral aspects that underlie both attrition and performance
to create a greater opportunity to reduce early stage turnover.
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Example 2 – Customer Care Job Family
In the second example, we consider an inbound customer care role. Over 1,500 agents are in
the sample. As with the Technical Support job family, the two metrics for review are Average
Handle Time and Sales Revenue.
In graph 3, we compare Average Handle Time (AHT) and attrition. Again, we see several
trends which need to be addressed in the hiring process.
 Poor performers (AHT > 600 seconds) have a 108% higher term rate at 90 days
 Average AHT for those who leave = 656 seconds
 Average AHT for those who stay = 591 seconds
Graph 3 – Inbound Customer Care: AHT compared to Attrition
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In graph 4, we compare sales performance and attrition. Again the same trend - poor
performers are more like to leave.
 Poor performers (average sales revenue < $350) have a 245% higher term rate at 90 days
 Average sales revenue for those who leave = $234
 Average sales revenue for those who stay = $450
Graph 4 – Inbound Customer Care: Sales Revenue compared to Attrition
Key Findings – Customer Care
 Employees with AHT greater than 600 seconds and average sales revenue less than $350
are 100% more likely to term in their first 90 days.
 This analysis shows a similar financial gain opportunity as the inbound technical support.
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What can you do to reduce attrition?
The above reviews of performance and attrition highlight a key opportunity: to develop a hiring
model that focuses not only on direct attrition improvements, but also on improvements to
employee performance that will subsequently have an impact on attrition as well.
To get started, we suggest several action steps that will position you and your hiring team for
success.
1. Build the right foundation by understanding the job and details associated with the job. A job
analysis process will help you define the jobs in terms of competencies which can be
measured during the hiring process. We commonly use a four quadrant model to group
competencies:
When the job analysis is complete, you will have a list of important competencies related to
successful job performance:
The job analysis helps us understand that the selection process (i.e. – assessment tools)
should measure:
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 Problem-solving/learning ability
 Communication related skills (including written communication)
 Computer skills
 Customer service orientation and skills
 Personal characteristics related to conscientiousness, composure, and interpersonal style
2. Spend time understanding your relationship between performance and attrition much like the
two examples discussed earlier.
3. Start small – focus on one metric and its relationship to attrition. By isolating one metric, you
can control other factors that may create “noise” in your execution. You can then examine
how you hire new employees into this role. If possible, you should determine what the
relationship is between your existing process and production performance for the selected
metric. For example, if you use an interview, do better scores on the interview translate to
better production performance? If not, you will need to rethink how you evaluate job
candidates during the hiring process. Without being able to predict new hire performance,
your hiring organization will be ineffective at reducing attrition and identifying candidates
that will perform better.
4. Understand how to measure potential job performance by using the right selection tools. The
chart below provides some examples:
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What type of results can you expect?
Earlier we highlighted two examples from an organization. In both the inbound care and inbound
technical support call types, new employees who struggled with AHT and Sales Revenue
performance also had higher 90 day attrition.
The organization used the information from their study of performance and attrition, as well as
job analysis details to implement a different approach to hiring. The organization focused on a
two primary areas to change its hiring model:
1. Revised the selection process to move beyond just interviews and skills testing, like
typing, to include other assessments that measure abilities and behavioral characteristics
for a better job fit.
2. Shifted recruiting efforts away from traditional sources like job fairs to more employee
referrals and internet tactics.
The net results included significant financial gain:
Applying these results to any organization will yield impressive financial gains all associated with
focusing on hiring improvement.
In summary, high new hire attrition can be associated with poor performance. Spending time to
research the link between poor performance and attrition may present opportunities to reduce
overall turnover. Following some basic steps and using the right assessment tools can create
significant financial gain.
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About FurstPerson
FurstPerson provides talent assessment solutions for customer contact
organizations. We enable companies to hire superior talent for service, sales,
and support roles. These roles may be in-person, over the phone, or via
chat/email. Our talent assessment solutions are customized by client, designed
by our expert selection consulting team, and delivered via our web-based talent
assessment platform. Each solution is designed to improve business
performance.
FurstPerson has provided contact center hiring solutions since 1997. Our
solutions are active in over 1,500 locations across North America, Europe, Latin
America, and Asia. Our industry leading solutions cover both brick and mortar
and home agent needs. Our innovative technology includes call center
simulations as well as other industry leading assessment tools.
Our contact center clients have realized results that have improved new hire
retention, job performance, workflow efficiency, and overall profitability.
FurstPerson clients typically realize up to a 70% reduction in 0 to 90 day attrition
and up to a 45% improvement in performance.
Learn more about FurstPerson:
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