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Attacking Attrition at Convergys

February 28, 2005
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Related Topics: Financial Impact, Retention, Featured Article, HR & Business Administration
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Convergys Corp. helps companies in 40 countries manage their billing, payrolls, benefits and pensions. Ironically, while the company became a global leader in providing "employee care" for other companies, its own workers felt slighted. Rampant attrition was dragging down profits and hampering growth.

    Convergys’ solution was to apply a sophisticated analytical technique, often used in consumer marketing, to determine what programs would keep employees happy and make them stick around. As a result, the company estimates, attrition was reduced by 57,813 jobs over four years, avoiding at least $57 million in recruiting and training costs.

    The attrition problem began in 1999, following Convergys’ successful initial public offering. In that first year, sales from its software and services grew 70 percent, to $1.8 billion, while its workforce almost doubled, to 35,000 employees. Turnover became so significant that in 1999 Convergys had to recruit 50,000 employees just to maintain that staffing level.

    Convergys tried to correct the problem through "silver bullet" approaches--such as across-the-board slight bumps in pay--based on employee opinion surveys. That didn’t have much of an effect. Those surveys suggested many possible reasons for employee departures, but they didn’t help identify and prioritize things that would make workers stay.

    "The information wasn’t actionable," says Rob Enos, Convergys’ senior vice president, human resources and administration. "We needed to take it to the next level and find out what would affect employee behavior."

    This is where Convergys borrowed a technique from consumer marketing: "conjoint analysis." The company quizzed employees through such means as surveys and focus groups. It analyzed data to determine what types of rewards would have the biggest impact on attrition.

    Convergys was then able to predict how many more employees would stay if, say, they were guaranteed that 75 percent of their requests for specific paid days off would be granted as opposed to just 50 percent of those requests. With such precise information, Convergys could weigh the value of its retention initiatives.

    The rewards that generated the greatest retention improvement were not always the ones that required the greatest investment. Instead of receiving raises once a year, for example, employees wanted half of their money every six months--and would stay longer as a result.

    "Because of our high turnover, people couldn’t think about something that would happen a year from now," Enos says. And the timing change cost virtually nothing.

    Convergys discovered that attrition couldn’t be fixed by a one-size-fits-all approach, but required a complex blend of initiatives, including scheduling, tuition aid and recognition. Employee Engagement Teams were established in each of its 57 customer contact centers to customize the initiatives for the local needs.

    "A conjoint analysis program like this is very complex and requires a lot of time, effort and investment," says Rich Utecht, the company’s director of human resources. "To use it, you need a situation that promises a big payoff."

    And $57 million--and climbing--certainly qualifies.

    For its success at retaining employees and slashing costs, Convergys is the 2005 winner of the Optimas Award for Financial Impact.

Workforce Management, March 2005, pp. 46-47 -- Subscribe Now!

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