Bridging the Employee Gap

By Dennis Buchanan

June/July 2006

Do you ever feel that keeping your call center fully staffed is an elusive goal?  Just when that last vacant position has been filled, another agent walks in to give notice.  Indeed, finding qualified candidates for new and replacement positions is an ever-present challenge for medical call centers.

Time is money and unfilled positions translate into lost revenue.  The cost of agent turnover can add up quickly: There is lost time for vacant positions, overtime paid to workers who have to pick up the slack, and time spent to train new hires.  To complicate matters when an employee leaves, candidate screening and interviewing may fall to a manager who already is juggling multiple responsibilities.  As a result, he or she is hard-pressed to devote the time necessary to find the right replacement. 

Like thousands of other companies across the country, some call centers are finding that Professional Employer Organizations (PEOs) provide numerous useful services, including help in the hiring process.  PEOs serve as human resource (HR) departments for small and medium-sized call centers, providing instant HR infrastructure. 

When it comes to hiring, full-service PEOs provide applicant review and interviewing, pre-employment background checks and testing, and post-offer drug testing.  In addition, many PEOs offer numerous services to aid in employee retention, including training and development. 

Call centers that sign on with PEOs enter into a co-employment relationship with the PEO.  Essentially, the PEO takes over the employee administration and the HR functions of the call center while the owner retains managerial control.  PEOs also handle payroll processing and employment-related tax filings, employee benefits management, and regulatory compliance with federal and state employer-related laws. 

Turnover: A Costly Drain: Conquering employee turnover means time and money saved in the long term.  Like an iceberg that lurks beneath the surface, the majority of turnover costs are hidden.  Multiple studies by the Rutgers University Graduate School of Management show that turnover expenses average 2.5 times the annual salary of the departing employee.  Some of those expenses are obvious, including advertising, recruitment, relocation, orientation, and training. 

However, other costs do not appear on a balance sheet, such as the loss of overall productivity before and after an employee leaves.  In many cases, the workloads of remaining employees increase to offset the vacant position.  According to one of the Rutgers studies, positions remain vacant an average of 13 weeks, and about 50 percent of the efficiency for that job is sacrificed during that time. 

Vacancies are just one factor in the loss of productivity when an employee leaves.  When positions are filled, it takes time for a new employee to become comfortable in a new environment and reach full productivity. 

The Rutgers study showed that a new employee can take as long as one year to achieve 100 percent efficiency.  Hiring a new employee also affects the productivity of supervisors and peers who must spend time helping their new team member adjust.

Turnover doesn't just affect a call center's remaining employees.  Customer retention also can be affected.  The expenses of losing and replacing employees also may include the costs of losing existing clients or not winning new ones.

Sorting Through a Mountain of Resumes: PEOs can help call centers fight employee turnover on two fronts: first, finding qualified candidates who are the right fit for the job; and second, helping the center keep employees once they are hired and trained.  For example, a PEO can help recruit employees by placing classified ads, screening applicant calls, reviewing applications, performing background checks, and recommending qualified candidates to interview. 

Chicago-based American Mediconnect handles several million calls a year from medical patients.  Because of the center's high-volume call load, filling vacancies as quickly as possible with qualified employees is critical.  Operations Vice President Amy Kritzman has come to rely heavily on her company's PEO to help her hire the right people. 

Recruiting is "a time-consuming process and can often be hit-or-miss," she said.  "However, since I've come to rely on my PEO recruiting specialist to sort through our mountain of resumes and screen out unqualified candidates, the resumes that land on my desk are those of solid, qualified candidates.  It makes the process go much more smoothly, and it's a huge time-saver for me."

Through a PEO, American Mediconnect has access to a team of specialists that provide administrative relief and sound HR advice, as well as recruiting and retention services.  "All of those services help make sure we are staffed with the right mix of people," Kritzman said.  "I appreciate having customized recruiting and retention tools that deal with our unique medical-related call center industry."

In addition, by working with a full-service PEO, a call center can provide programs to help motivate employees to stay.  An effective training and development program, for example, helps attract talented workers and equips them to advance in their jobs.  Training programs help improve productivity by enhancing employees' skills and helping them to feel valued and appreciated.  Tuition reimbursement and management training courses are examples of these programs.

Any call center interested in a PEO should research its options thoroughly.  A good resource is the website of the PEO industry's governing body, the National Association of Professional Employer Organizations (NAPEO).  Before contacting a PEO, check references, inquire about all services offered and the fee structures, and confirm that the company is a member of NAPEO.  In addition, leading PEOs are accredited by the Employer Services Assurance Corporation (ESAC).  Through its independent application and monitoring process, ESAC evaluates PEOs' compliance with important ethical, financial, and operational requirements. 

Dennis Buchanan is a regional manager for Administaff, the nation's leading Professional Employer Organization.  He may be reached at Dennis_Buchanan@administaff.com.  For more information about Administaff, call 800-465-3800 .

Why Companies Outsource

Here are the top 10 reasons companies outsource, according to the Outsourcing Institute's Annual Survey of Executives:

1.  Reduce and control operating costs

2.  Improve company focus

3.  Gain access to world-class capabilities

4.  Free internal resources for various purposes

5.  Resources are not available internally

6.  Accelerate reengineering benefits

7.  Function difficult to manage/out of control

8.  Make capital funds available

9.  Share risks

10.  Cash infusion