Attrition Rate Formula in BPO & Call centers | How to Calculate

This article provides a step-by-step guide for calculating attrition rate, a key metric for measuring the success of a business. Check attrition rate formula, its types and factors responsible for attrition in BPO.

July 30, 2023

  •  

8 Minutes

  •  
Saumya Singh

Saumya Singh

Attrition Rate Formula in BPO & Call centers | How to Calculate

contents

Attrition rate in BPO refers to employees leaving an organization in a specific period of time. It is often measured as a percentage of the total workforce. It impacts the stability, productivity, and overall performance of a BPO.  The attrition rate is important for businesses, specifically in Business Process Outsourcing, where employee turnover can significantly affect operational efficiency and costs. Understanding the causes, outcomes, and methods to mitigate attrition is important for creating a positive work environment. It will also cover the difference between shrinkage and attrition in Business Process outsourcing, controlling, and How to reduce it in BPO.

Attrition in BPO & Call centers refers to the natural decrease in the workforce of an organization over time through retirement, resignation, relocation, or even changing career paths. Attrition rates within the BPO & call centers can impact productivity and quality of service. When high-performing employees depart the organization, it is positive which can often lead to:

  • Increased recruitment 
  • High Training expenses 
  • And the loss of experienced employees
  • More pressure on team leaders of BPO
Calculate the attrition rate formula with best tools and technology

BPOs that aim to reduce employee attrition generally use strategies such as:

  • Improving work-life balance
  • Offering competitive compensation
  • Career development opportunities
  • Reward programs, etc.
  • Giving titles like best customer care executive award of the month.

The Power of Sales Outsourcing: Meaning and Benefits

What is the Attrition Rate Formula in BPO & Call Centers? 

The attrition rate formula in BPO & Call Center involves calculating it as a percentage.

The formula is as follows:

Attrition Rate = (Number of Employees who left during a specific period/Average number of employees in a certain period) multiplied by 100

Attrition Formula in BPO & Call Center
Image - Attrition Formula in BPO & Call Center

How to Calculate Attrition Rate in BPO & Call Center

BPOs and Call centers consists of both voice and non voice processes. Here’s how you can calculate the Attrition Rate step by step:

  1. Determine the period for which you want to calculate the attrition rate (e.g., monthly, quarterly, or annually).
  2. Count the number of employees who left the company during that specific period. Let's call this number "Number of Employees Who Left = N."
  3. Estimate the average number of employees during the same period. 
  4. To find the average, add the total number of employees at the beginning and end of the period, and then divide by 2. Let's call this number "Average Number of Employees = A."
  5. Put the values into the above attrition rate formula and calculate.

For example, if ten employees left, and the average employee count is 200, then the attrition rate would be: 

Thus N=10, A= 100

Attrition Rate Formula= A/N x 100

Attrition Rate = (10/200) x 100= 5%

Finally, Attrition Rate is 5% 

Factors Responsible for Attrition Rates 

Employee attrition is an important concern for organizations as it impacts productivity, company culture, and overall business success. Understanding the factors contributing to increased rates is crucial for designing effective strategies to retain valuable talent and create a positive work environment. Attrition rates in the BPO & Call Center can depend on several factors, such as workload and stress. Other factors responsible for attrition rates in BPO are:

  • Job satisfaction
  • Management and Leadership
  • Company size
  • Employee location
  • Industry standards 
  • Employee tenure
  • Employee company fit

To address these factors, BPOs usually implement retention strategies such as offering competitive incentives, improving work-life balance, and conducting regular feedback sessions. BPO attrition rate tends to be higher than in other industries. It can range from 20% - 40% depending on many factors, such as:

Controlling Attrition in BPO & Call Centers

Employee attrition can be challenging in Business Process Outsourcing. High attrition rates can lead to increased recruitment costs, reduced productivity, and a negative impact on customer service. It is essential to implement effective strategies to control it to maintain a competitive edge. Controlling Attrition within BPO & Call Center requires:

  • Handling the root causes 
  • Building an interesting work environment that ensures Employee Retention and Satisfaction.

Here are some effective ways to control and reduce attrition in BPO & Call Centers:

  • Improve recruitment and selection
  • Enhance the onboarding and training process
  • Foster a positive work culture
  • Provide competitive compensation and benefits
  • Career development opportunities
  • Address job stress and well being
  • Employee retention programs
  • Exit interviews and analysis

Types of Attrition in BPO & Call Centers

Let us explore the various types of attrition in BPO and call centers and the possible reasons behind them.

Voluntary attrition : It occurs when employees leave the organization for various reasons:

  • Better career opportunities 
  • Work environment
  • Insufficient opportunity for further development 

Involuntary attrition: It occurs when employees leave due to external forces outside their control, such as:

  • Underperformance
  • Disciplinary action 
  • Restructuring an organization

Functional attrition : It occurs when employees leave the organization for natural reasons such as:

  • Retirement
  • Disability
  • or any other natural circumstances

Shrinkage VS Attrition in BPOs & Call Centers

Here’s a table summarizing the differences between Shrinkage and Attrition in BPO & Call Center. Shrinkage is primarily about optimizing workforce availability, while attrition focuses on retaining employees and reducing organizational turnover rates. Both factors require attention and effective strategies to ensure smooth operations and maintain a satisfied BPO & Call Center workforce.

Shrinkage vs Attrition in BPO
Image - Shrinkage vs Attrition in BPO

Now you know how to control and reduce Attrition in BPO & Call Center. Don’t let it hinder your success.

Request a demo with SquadStack now!

Reduce attrition by Squadstack

SquadStack - Revolutionize Your Outsourcing Today!

FAQ's

What is Attrition in BPO?

arrow-down

Attrition refers to the rate at which individuals willingly quit their roles within a BPO Industry.

What are the common causes of Attrition in BPO?

arrow-down

Common causes of Attrition in BPO includes - job stress , limited career opportunities, work-life balance issues , and compensation concerns.

What are the consequences of high attrition in BPO?

arrow-down

High attrition rates in BPO can lead to increased recruitment, training costs, loss of experienced employees.

How can BPO organizations measure attrition rates?

arrow-down

BPO organizations can track employee attrition by calculating the percentage of employees who quit during a specific timeframe and average numbers over that same timeframe.

What role does employee management play in reducing attrition in BPO?

arrow-down

Employee management reduces attrition in BPO by creating a positive work environment, recognizing and rewarding employee contributions, and providing career opportunities.

The search for a telecalling solution ends here

Join the community of leading companies
star

Related Posts

View All
×