When we talk about call center attrition, we usually mean it in the broadest sense, essentially to talk about the rate at which you lose employees. Sometimes, however, we also use the words turnover or churn.
Strictly speaking, there are differences between those three terms. It’s useful to understand them as the type of attrition or turnover your call center is experiencing will tell you how big your problems potentially are.
Attrition
This usually refers to staff who leave a job voluntarily and the company takes the decision not to replace them. Attrition often happens when people retire, move to a different town, make a career change, return to study, or start a family. The reasons for them leaving are not the fault of the company. This is sometimes called voluntary attrition to differentiate it from involuntary attrition. The latter can arise when a company manufactures attrition by eliminating jobs or laying workers off to control costs. Whether voluntary or not, in all cases the people who leave the company are not replaced.
Attrition Calculation: (Employees at end of period ÷ Employees at start of period) x 100
Example: (90 ÷ 100) x 100 = 90% retention rate
To get the attrition rate just subtract the retention rate from 100:
Example: 100% – 90% = 10% attrition rate
This calculation tells you your workforce is 10% smaller than it was at the start of the period. Companies that are growing will have a negative attrition rate, as no matter how many people leave the business, more than enough will be recruited to replace them.
Turnover
Whether the employee leaves voluntarily or not isn’t the issue here. For it to be counted as turnover the company has to take the decision to hire someone to replace them. Turnover can happen when employees leave voluntarily for the reasons listed above. More often, however, they leave for reasons to do with the job or the company. These can include a toxic culture, poor fit for the job, overwork or underwork, lack of promotion prospects, or termination.
Turnover Calculation: (Employees who left during a given period ÷ Average number of employees during the same period) x 100
Example: (15 ÷ 95) x 100 = 10.5% turnover rate
Turnover tells you have many people you had to replace in a given period. For example, a company started the year with 100 staff and ended it with 110 has a negative attrition rate due to its growth. However, let’s say that during the year 15 of the people it hired left the job. Despite growing overall employee numbers it still has a turnover rate of just over 14%, assuming the average number of employees for the period was 105 (half-way between the start and end of period employee numbers).
Churn
This is a measure of how many people leave your organization during a given period. It’s expressed as a percentage of the size of your workforce at the end of the same period. It therefore accounts for both attrition (team size at end versus the start of a period) and turnover (how many people got replaced).
Churn Calculation: (Employees who left during a given period ÷ Employees left at end of same period) x 100
Example: (10 ÷ 90) x 100 = 11.1% churn rate
Churn tells you how many people you have gone through, as a percentage of your remaining employees. If a company grows from 100 to 110 employees in a given period, but 15 people left during the same period that is a churn rate of 13.6%, even though the attrition rate would be minus 10%.
Note that if a company is growing, its churn rate will always be lower than its turnover rate, and its attrition will be negative. If a company is shrinking its attrition rate will be above zero and its turnover rate higher than its churn rate.
Research by ContactBabel indicates that turnover rates for call centers have been on the rise since 2013. The year 2020 incidentally saw a reduction, as companies were hiring fewer employees due to the pandemic and employees were reluctant to leave during uncertain times. Since then, however, churn rates have steadily begun to rise once again.
All three types of attrition are important to understand. Unless your business is actively trying to reduce headcount or sunset a team or function, lower attrition rates generally save the company money and usually result in better customer outcomes.
For more information on how Time Doctor can help you improve your attrition rates, click here.
Liam Martin is a serial entrepreneur, co-founder of Time Doctor, Staff.com, and the Running Remote Conference, and author of the Wall Street Journal bestseller, “Running Remote.” He advocates for remote work and helps businesses optimize their remote teams.