Employee Engagement in the Contact Center: Metrics and Drivers

Spotlight on Culture and Metrics: Join Jeff at ICMI Contact Center Connections from October 28-30 in Chicago. He'll be speaking on a number of topics related to culture and metrics.

There is no universal definition of employee engagement, yet everyone seems to know what it means. How can this be? Although the term has not been rigorously defined, there seems to be universal agreement that employee engagement and employee job satisfaction are highly correlated. In fact, many who write on the topic of employee engagement simply conflate the two terms, and treat employee engagement and employee job satisfaction as one and the same thing. But they are not the same thing. Employee engagement is a complex set of behaviors driven by numerous contact center practices that can be hard to quantify. These include employee recognition, wellness, personal growth, team huddles, and relationships with peers. Employee job satisfaction, by contrast, is a metric that by definition, is quantifiable.

Assuming that conventional wisdom is correct, and that agent job satisfaction is a strong proxy for employee engagement, I will focus in this article on the metric of agent job satisfaction and the underlying drivers of job satisfaction.

Agent Job Satisfaction Defined

Agent Job Satisfaction is the percentage of agents in the contact center that are either satisfied or very satisfied with their job. It is typically measured annually or semi-annually using an agent satisfaction survey ( sample here ). Unfortunately, fewer than 30% of all contact centers track agent job satisfaction. When I ask clients why they don’t track this metric, the answer is usually the same: it’s too difficult to measure, or the metric just isn’t that important. On both counts, they are wrong. Here’s why.

Why It’s Important

Agent Job Satisfaction is a bellwether metric that impacts many other metrics in the contact center. It is positively correlated with customer satisfaction and negatively associated with absenteeism and turnover, meaning that absenteeism and turnover go down as agent job satisfaction goes up. It turns out that the adage “happy agent equals happy customer” is not just a cliché; it can be demonstrated empirically! Figures 1, 2, and 3 below show these correlations using data from MetricNet’s contact center benchmarking database.

Figure 1: Agent Job Satisfaction vs. Customer Satisfaction

Figure 2: Agent Job Satisfaction vs. Annual Agent Turnover

Figure 3: Agent Job Satisfaction vs. Daily Agent Absenteeism

So, why do we care about these correlations? First, they are not just spurious correlations; they are cause-and-effect relationships. Agent job satisfaction (along with first contact resolution rate) drives customer satisfaction; it drives agent turnover, and it drives agent absenteeism. More importantly, if we can control agent job satisfaction (which we can), we can drive real improvements in customer satisfaction, turnover, and absenteeism.

The second reason is that high agent job satisfaction has positive economic benefits. It’s no secret that the contact center industry experiences extremely high turnover. The average agent turnover in contact centers worldwide last year was greater than 40%! Since improvements in agent job satisfaction can reduce agent turnover and absenteeism, it can also reduce the costs associated with turnover and absenteeism. In North America, the direct cost of replacing a contact center agent, including the cost of screening, recruiting, interviewing, and training an agent is more than $12,000. And this does not even take into account the value of the knowledge and expertise that is lost when an agent leaves the contact center. Turnover is indeed costly!

According to research conducted by McKinsey & Company, engaged and satisfied contact center employees are 8.5X more likely to stay than leave within a year, 4X more likely to stay than dissatisfied colleagues, 16X more likely to refer friends to their company, and 3.3X more likely to feel extremely empowered to resolve customer issues.

Key Drivers of Agent Job Satisfaction

I mentioned above that agent job satisfaction can be controlled. But how? Many contact centers struggle with low morale among their agents, and appear unable, despite their best efforts, to maintain a high level of agent morale in the contact center. Can we do something proactive to manage and improve agent job satisfaction? The answer is yes, and the solution is surprisingly straightforward.

It turns out that the most reliable drivers of agent job satisfaction are training hours, coaching hours, and the existence of a formal career path. Once again, we can turn to our benchmarking data to make this point. Figures 4 and 5 below show how training and career pathing impact agent job satisfaction.

Figure 4: Annual Training Hours vs. Agent Job Satisfaction

Figure 5: Career Pathing and Agent Job Satisfaction

Other Factors Impacting Job Satisfaction

One factor, frequently overlooked, that has huge implications for agent job satisfaction is the effectiveness of recruiting. Oftentimes a contact center agent with low job satisfaction is simply a poor fit for the job. They may have interviewed well, tested well, and passed their initial training courses with flying colors. But if they are unable to withstand the day-to-day rigors of a fast- paced contact center environment, they may collapse under the pressure and become unhappy over time. Is there any way to foresee and prevent this phenomenon? The answer is yes, and an increasing number of contact centers are doing so by including psychometric testing in their recruiting process.

Psychometric testing is a standard, scientific method used to measure a candidate’s aptitude and behavioral style. It is designed to determine a candidates' suitability for a particular role based on the required personality characteristics and cognitive abilities of the job. Employers use the results of psychometric testing to identify behavioral “matches” to the position that are otherwise difficult to determine from face-to-face interviews or other types of testing.

Clear and quantifiable agent performance standards also have a positive impact on job satisfaction. In one recent project I managed for a health care company, agent scorecards were implemented in an effort to drive accountability, transparency, and visibility into individual agent performance. The scorecard, shown below, contained just three metrics: customer satisfaction (a quality metric), contacts handled per month (a productivity metric), and first contact resolution rate (an effectiveness metric). These three metrics drive the right behavior in agents and enable supervisors to provide more effective feedback (sample below).

Depending upon the metrics you track in your contact center, you may choose more metrics or a different mix of metrics for your agent scorecard. Once you select the metrics for the agent scorecard, you establish a weighting for each metric based upon its relative importance. Step 3 is to show a reasonable range of performance – worst case to best case – for each metric. Normally these performance ranges are adjusted monthly, based on the worst and best agent performance in the contact center. In step 4, the agent’s actual performance for each metric is inserted into the third column from the right. A score for each metric is then calculated based on the interpolation formula in step 5. And finally, a balanced score for each metric is determined by multiplying the metric weighting by the metric score. When the balanced scores for each metric are summed up, you have the total balanced score for the agent!

In this example, the agent’s balanced score is 70.8%. Every agent’s balanced score will always range from 0% (if they have the worst possible performance for every metric in the scorecard) to 100% (if they have the best possible performance for every metric in the scorecard). It turns out that the agent in our example has scored well. When we run hundreds of contact center agents through this algorithm, we get a normal distribution centered right at 50%. Those who score above 60% are typically in the top quartile; those who score between 50% and 60% are in the second quartile; those between 40% and 50% are in the third quartile, and those below 40% are generally in the bottom quartile for overall service desk performance.

Using the scorecard, supervisors can coach their agents each month and show them, based on their monthly metric scores, where they need to focus their time and attention. A low score on a particular metric shows an area that needs improvement, while a high score on a particular metric highlights an area of strength. In our sample scorecard above, the agent’s first contact resolution was outstanding at 100%, while their tickets per month score was quite low at 0%. The quick diagnosis for this agent’s performance is that they are delivering outstanding quality, but they are doing so at the expense of productivity and need to improve productivity by handling a larger volume of tickets each month.

Let me also point out that a persistent myth in the industry – that agents don’t want to be measured or held accountable for their performance – is a fallacy. Nothing could be further from the truth. In fact, the best performing contact center agents want transparency, visibility, and accountability because they have nothing to fear, and these workplace attributes give them the insight they need to improve their performance. In most cases, contact centers that implement the agent balanced scorecard will also post the agent ratings on a monthly basis, as shown below. The intent here is to help each agent see how they are performing relative to their peers, and provide an incentive for every agent to improve their performance over time. Why does all this matter? Because it can be shown empirically that contact centers that have implemented agent performance targets, and particularly those who have agent scorecards, enjoy significantly higher job satisfaction scores than those contact centers that don’t have quantifiable agent performance targets or scorecards.

Finally, there is the intangible factor of management effectiveness, which cannot be overstated. I have seen contact centers transform, almost overnight, from poor performers to top quartile performers simply by replacing the manager of the center. These high-performance managers tend to exhibit several common behaviors. These include, but are not limited to:

• Accessibility – an agent can reach the manager whenever they need to for open and honest communication
• Team Huddles – the manager values and encourages frequent team huddles
• Strong Mission – the manager communicates the importance of the enterprise’s mission
• Socializing – effective managers make time for socializing both at work and outside of work

The Elephant in the Room

So far, I have said nothing about compensation as a driver of agent job satisfaction. But compensation does matter…a lot! The reason compensation is a taboo subject in the industry is because most managers have little if any control over what agents are paid. This is unfortunate for two reasons. First, even minor increases in compensation can have a very positive impact on agent satisfaction, morale, and performance. Secondly, and more importantly, increases in compensation have a significant impact on the economics of a contact center. There is a phenomenon known as the wage rate paradox whereby increases in agent compensation, up until a certain point, actually produce an economic benefit for a contact center that is far more than the cost of higher salaries. The best way to illustrate this is by example.

Imagine staffing a contact center with the lowest cost resources you can find. On the one hand, you may have minimized your payroll. But on the other hand you have likely staffed your contact center with relatively inexperienced agents. No amount of training is going to turn those agents into high performers. The sacrifices in quality, service levels, customer loyalty, and revenue that result from hiring the lowest cost agents you can find are far greater than any amount saved in payroll. By contrast, it has been shown that offering 20% higher compensation than the market minimum will attract significantly more qualified agents, thereby producing better results – higher first contact resolution rates, higher customer satisfaction, greater customer loyalty, higher revenue production, and yes, higher job satisfaction.

Benchmarking Ranges for Agent Job Satisfaction

MetricNet’s benchmarking database shows that the average agent job satisfaction for contact centers worldwide is about 77%. That is, 77% of contact center agents are either satisfied or very satisfied with their jobs. This number varies from a low of 44% to a high of 97%.

As mentioned above, agent job satisfaction is usually measured through annual or semi-annual satisfaction surveys. These surveys typically contain five or fewer questions and can be automated using simple online tools such as Survey Monkey. MetricNet recommends a five-point scale, where a score of 5 represents Very Satisfied, and a score of 1 represents Very Dissatisfied. Given the impact of training, coaching, and career pathing on agent job satisfaction, the survey should include a question about each of those. For example, “How would you rank the quality of training you receive in your contact center?” The final, and most important question of the survey should always be some variation of “How would you rate your overall job satisfaction in the contact center?”

Maximizing Agent Engagement and Job Satisfaction

As a 30 year veteran of this industry, I have seen contact centers struggle more often than not with poor morale and low job satisfaction. The good news is that both of these factors are controllable. Moreover, there is strong evidence that agent job satisfaction and engagement are highly correlated. By managing agent job satisfaction, you are simultaneously driving higher levels of agent engagement. Some of the primary levers you have for driving job satisfaction, and hence agent engagement, include training, coaching, and career pathing. Additionally, psychometric testing and agent scorecards are two underutilized tools that can have a significant positive impact on agent engagement in the workplace. Finally, compensation levels that are well above the market minimum not only produce higher levels of job satisfaction, but they also create economic benefits for the contact center that far outweigh the cost of higher salaries.