The Cost of High Staff Turnover in BPO Companies

On September 10, 2012, in Outsourcing, by Business Development Group
The labor market in the Philippine outsourcing industry is pretty tight, what with companies offering all sorts of rewards and different financial remuneration packages. Many BPO companies often find themselves poaching employees from each other as people jump from job to job among different outsourcing service providers.

The labor market in the Philippine outsourcing industry is pretty tight, what with companies offering all sorts of rewards and different financial remuneration packages. Many BPO companies often find themselves poaching employees from each other as people jump from job to job among different outsourcing service providers.

Employee turnover rate is a major concern for business process outsourcing (BPO) companies in the Philippines. In addition to the costs of recruitment and training, staff turnover can have a significant impact on the quality of outsourcing services a BPO company offers its clients.

The labor market in the Philippine outsourcing industry is pretty tight, what with companies offering all sorts of rewards and different financial remuneration packages. Many BPO companies often find themselves poaching employees from each other as people jump from job to job among different outsourcing service providers.

In their article “High staff retention drives quality performance”, leading analyst authority for the global services industry, Horses for Sources (HfS), pointed out that aside from the direct costs associated with recruiting and training new staff, the indirect costs associated with high staff turnover can also be substantial.

Based on a survey by Mercer Human Resource Consulting , HfS indicated the following costs of high staff turnover:

  • The costs of decreased productivity
  • Lost investment in training and development
  • Loss of revenue for key sales
  • Recruitment costs
  • The new employee’s induction into the business culture
  • Management downtime in interviewing new candidates
  • Legal fees and payout commitments

Related Article: High staff retention drives quality performance

There are many factors that affect staff turnover, not the least of which is financial remuneration. Other factors include the working environment or company culture, leadership style of managers and leaders, motivation and opportunities for growth. These factors can be controlled by companies and those that aim to retain the best employees and performers must look to ways in leveraging these factors to encourage employee loyalty and build a competitive staff that deliver high quality results.

Related Article: The Key to Quality Outsourcing Services: Happy and Healthy Employees

 

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