Keeing a lid on attrition - 5 Steps to manage attrtion in Shared Services


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Attrition is a common problem, not just offshore, but also onshore, as we see increased interest in keeping centers near the customer base. We’ve got some tips on managing turnover.

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Keeing a lid on attrition - 5 Steps to manage attrtion in Shared Services

  1. 1. HOW DO YOU CONTROL STAFF ATTRITION IN A SHARED SERVICES ENVIRONMENT? A tip to get you there…keeping a lid on attrition The recruitment, development and retention of employees are core competencies in Shared Services and Business Process Outsourcing; but employees do move on, sometimes to other organizations (external attrition), but often also internally, as open positions within other functions attract them. This internal attrition is just as important as external attrition. So, given the transactional nature of much of the work, and given the risk of knowledge loss when staff leave, how do you control attrition? Staff turnover is a common, unavoidable, daily challenge. Though it carries costs with it if the turnover rate is too high, attrition can also be healthy as a means of refreshing a team, getting new ideas, and providing trained and experienced staff for deployment elsewhere within a company. The challenge, however, is to control it. Within Shared Services, attrition is largely driven by the profile of recruits (graduates, multi-lingual, young, mobile, career-oriented), the nature of the work (transactional), lack of career progression, competition from other SSCs in the area, an unengaging work culture, and last but not least, insufficient leadership. © Chazey Partners 2013 er v rn Tu
  2. 2. Productivity / Service Levels EMPLOYEE LIFECYCLE Service Levels Employee Leaves Productivity Employee Starts Time Managing the impact of staff turnover on service is a critical aspect of running effective business services. The crucial determinant of this impact is the level of standardization. SSOs with highly standardized processes can support staff interoperability and movement; meaning, higher levels of standardization can withstand higher levels of turnover. In contrast, the impact is amplified in environments with low process standardization, where high turnover leads to constant service disruption - as vital, specific experience and knowledge are lost, the learning curve has to be constantly repeated. A further risk of low standardization is that loss of employees creates additional work for the remaining team. When coupled with complaints about service deterioration, this creates stress levels, which can lead to further resignations. A viscous circle ensues … ver rno f tu to $ Cos Your Goal : sustainable attrition Not all turnover is bad, of course. Many shared services leaders will speak of a 10% attrition rate as highly “acceptable”, even “desirable” to avoid operations getting stale. Beyond that, though, things get tricky. So what’s a sustainable turnover level? Where low standardization exists, a rate between 10%-15% is manageable. Where high standardization exists, rates can rise to 15%-25%. In highly rules-based environments (e.g. some call center operations), the rate can be even higher without negatively impacting service delivery. 2 | Chazey’s Toolkit – Keeping A Lid On Attrition – October 2013
  3. 3. 5 STEPS TO CONTROLLING ATTRITION If you want to gain control over staff turnover, here are a few tips: first, you need to identify your core needs; second, you need to be aware of external market conditions that impact your employees’ desire to stay put; third, you should be doing all you can to make a career in your team a popular choice; fourth, put in place a structured framework for onboarding, that supports positive engagement; and fifth, if all else fails … offer employees a position within the wider business. Let’s look at these one by one. 1 Identify and align/define core operational needs The first step is to focus on core operational needs and align these with role profiles. Start with a simple matrix of role requirements and relevant skills and experience as depicted below. Profile / Skill Domain Experience Customer Facing Language Fluency Transactional Processing LOW LOW LOW Exception Handling HIGH MED MED Customer Interaction MED HIGH HIGH Continuous Improvement HIGH LOW LOW Technical HIGH MED LOW Know what you are up against 2 Make sure you are aware of the external labor market conditions and any competitive businesses in your area, especially as new ones move in, or as existing centers expand. Pay attention to what impacts employment. 3 What career options are you offering? Find out what employees find attractive about your work environment – employee surveys are useful. Run focus groups to find out what works well and what doesn’t. Leverage that feedback. Also, track your employment metrics: How long does a typical employee stay with you? Is that an acceptable timeframe? Work around it. And track why staff leave. The exit interview is an invaluable source of information, too often neglected. Find out what you can control. Money is not always the reason staff leave. 3 | Chazey’s Toolkit – Keeping A Lid On Attrition – October 2013
  4. 4. “Exit interviews are an invaluable source of information, too often neglected” 4 Build a framework to manage attrition You can counter high attrition by helping incoming staff find their feet faster, and encouraging engagement; engaged staff are less likely to leave. Make sure you have a robust induction process that facilitates an employee being productive from the start. Offer staff opportunities to develop their skills through courses, whether internally or externally. Many companies actively promote external learning, and offer promotions upon completion. And don’t overlook the “soft skills”: while functional expertise is important, it’s the management and negotiation skills that will get results. Make career training compulsory, and don’t overlook mentoring and “buddy” systems. On the other hand, you can protect yourself against “loss of knowledge” by taking a structured approach to job-rotation, thus building up backup expertise. And you can capture knowledge that is specific to customers or processes through Apps like Yammer, which collect know-how in a central, easy to access and update, repository. 5 If you can’t stop them, at least keep them for the wider business If someone really does want to move on, offer them a career within the wider organization, where their collective knowhow will benefit the business. Open a dialogue with employees to understand their requirements and plans, and actively collaborate with HR to position the shared services center as a global talent pool. “Actively collaborate with HR to position the shared services center as a global talent pool” 4 | Chazey’s Toolkit – Keeping A Lid On Attrition – October 2013
  5. 5. EXAMPLE Accounts Payable is often a typical entry-level job in an SSO/BPO – and usually carries a high turnover risk. Get the upper hand over attrition by following these steps: • Each team should be managed by a Team Lead with a minimum of 2 years’ experience – must have technical and leadership capability • Team should maintain a minimum standard of aggregate number of years’ experience – don’t allow this to be diluted by leavers or joiners • Team members must complete a minimum period within the team (12 months) before rotating elsewhere • Arrange the team around Clusters where the team leads sit within the team • Document all processes / capture local knowledge in templates and keep them up to date • Make sure new recruits receive intensive induction • Introduce structured on-the-job work shadowing with buddy / mentor – use a ‘scoring’ system to define readiness • Offer structured training and development – a minimum of 60 hours per annum • Implement a structured introduction to team members and others who staff will interact with • Track and display team and individual productivity and quality KPIs, for motivation and accountability 5 | Chazey’s Toolkit – Keeping A Lid On Attrition – October 2013
  6. 6. For more articles on Chazey’s Toolkit, please ABOUT CHAZEY PARTNERS Chazey Partners is a professional management advisory business that is committed to adding significant value to our clients through a partnership approach. We bring together a unique wealth of expertise and real life experience in Business Transformation, Shared Services & Outsourcing and Technology Enablement. We pride ourselves in having built, operated and turned around some of the world's most highly commended and ground-breaking Shared Services Organisations, and for implementing many highly successful multi-sourced (shared services and outsourced) delivery solutions. Over the last 20 years, we have delivered numerous programmes globally, in the US, Canada, UK, Continental Europe, Ireland, India, Eastern Europe, South America, Singapore, Australia, China, Middle-East and Africa. Our experience covers both Private and Public Sectors, providing expertise in a wide spectrum of business functions, including Finance, HR, IT and Procurement. Learn more about us at Phil Searle CEO & Founder Chazey Partners +1 408 402 3008 David O’Sullivan Co-Founder & Partner Chazey Partners +353 (0) 86 384 8573 Grant Farrell Phil Searle CEO & Founder Managing Director United States Chazey Partners +1 408 767 1285 +1 408 402 3008 Chas Moore Managing Director, Canada Chazey Partners +1 855 692 6229 Ext 201 Robert Towle Director East Coast, USA Chazey Partners +1 862 812 7851 Anirvan Sen Managing Director, Asia, Middle East and Africa Chazey Partners +31 649 133 170 Esteban Carril Managing Director, Latin America Chazey Partners +54 (911) 3085 5140 Janey Jux Head of Public Sector Practice EMEA Chazey Partners + 44 (0) 800 644 0649 Emer O’Kelly Regional Director, Europe Chazey Partners +44 (0) 7703 647360 Christina Exarchou Head of HR Practice EMEA Chazey Partners +30 6944 525622 6 | Chazey’s Toolkit – Keeping A Lid On Attrition – October 2013