Factor Affecting Staff Turnover in HSBC Call Centre - Essay Example

Introduction Background The development of call centers across nations has changed the nature of work for many people. People spend their workdays handling telephone calls and are governed by a new discipline (Bibby, 2000). Call centers are used for variety of services – from customer support to marketing. The banking and financial sector has particularly been benefited by the call centre concept. The UK financial services industry has experienced series of changes since 1980s (Doukakis, 2002). Competition drove the banks to become more customer-focused and introduce innovation products. To improve the competitive position, banks used cost-cutting weapons. They streamlined their processes, shifted back-office operations, boosted workforce productivity and tried to use as much as information technology as possible. Banks rate managing customer experience as the most important factor of success (Wisskirchen et al., 2006). Call centers are expected to give them this competitive edge. Call centers are the perfect embodiment of the ‘new’ service oriented economy (Moriset, 2004). Call centers use the latest technology and thus enable a day’s work to be done in an hour. These employees are often compared to the workers on the shop floor of a manufacturing unit. Call centers in any nation follow the same technique and have the same attributes. They usually have very flat management structures which provide very little scope for career advancement. Job satisfaction is call centers is very low which accounts for attrition and high turnover in the industry. There is a strong relationship between job satisfaction and staff turnover. If employees are satisfied and their needs are met, it can limit staff turnover. Factors affecting Call centers Job satisfaction, motivation, staff turnover Job satisfaction has been defined as an attitudinal state which reflects all the affective feelings that a person has about the job, cite Biggs and Swailes (2006). This includes growth, pay, co-workers and supervisors that contribute towards satisfaction in varying degrees. The level of satisfaction differs across permanent workers and the agency workers. Many call centers appoint agency workers so that the parent employer does not have the responsibility of the staff. Permanent employees become de-motivated when their organization uses agency staff but agency workers are used to prevent layoffs and their commitment to organization is much lower than the permanent employees. Maslow’s Hierarchy of Needs suggests that the basic physiological needs have to be met first before a person can look ahead. Only when the basic needs are satisfied he clamors for safety needs, need for love, self-esteem or self-actualization. As one need is somewhat fulfilled, the other needs become important and this motivates or influences his behavior (Accel-Team, 2006). This corroborates with Herzberg who proposed that an employee’s motivation is understood when his attitude is understood (Tietjen & Myers, 1998). Herzberg determined that happy feelings or a positive attitude was always task-related while the bad attitude or unpleasant feelings depend upon the surroundings. These are the motivators and include recognition, achievement, career advancement and the work itself. These motivators cause positive job attitudes because they satisfy the need for self-actualization, which is the last in the hierarchy of needs of Maslow. Most call centers under perform and high turnover and absenteeism are the major causes. Various reasons can be attributed to low productivity in call centers. Stress and boredom are believed to be the main reasons for high turnover of staff in UK call centers, which stands at about 35% currently (Kirby, 2006). This leads to increased risk in mental health problems and consequently escalates cost to National Health Service. In addition, the organization spends repeatedly on recruitment and training. Physical health, stress, lack of motivation, leisure time and relaxation, hours or work including shift timings, and poor compensation packages are some of the other causes associated with poor productivity. The call center staff is even scolded for building relationship with the customers (Kirby). Sitting motionless on the chair for most of the day and answering routine questions, the human mind and the body become tired (Contact, 2003). This leads to poor circulation. Those employees who indulge in workout and have healthy lifestyle habits feel less stressed. A lot of money is being spent on the process automation at call centers but the health of well being of the operators is not paid attention to, which defeats the very purpose of the call centers. Even the money spent is not justified. Good staff morale is the key to a healthy call centre and thereby customer satisfaction. Recruitment and training There is a mismatch between the skills and attributes required of the people and the opportunities. Besides, once employed, it is difficult to utilize these characteristics and behavior. Stress is laid on the quantity of calls answered rather than the quality of calls. Even though managers insist that customer satisfaction if the prime consideration but the number of calls answered and the speed at which they are handled are the measure of performance (Callaghan, n.d.). This leads to frustration because people feel they were employed for their skills which are underutilized. Improving recruitment process may be the answer. If the banking process is automated and further training provided, the HSBC staff performance could be improved. Globalization and Management Managers too have a critical role to play in the success of a call center. Apart from the judicial capital investment in advanced technology, they are responsible for the large number of staff working across different shifts and the customer satisfaction. Robinson and Morley (2006) quote that call center management measures what is easy to measure than what is important to measure. There exists a dichotomy between the qualitative and quantitative service to be delivered which leaves the staff stressed. Target setting remains institutionalized in the call centers. It is felt that management sacrifices the enthusiasm and the motivation of call center agents. Lack of involvement and understanding by the top management also contributes to low motivation amongst the staff. Globalization and corporate restructuring has brought in customers from different market place with diverse cultures. According to Rajan, the UK labor market is dominated by members of the minority groups and/or women (Powell, 2006). This workforce diversity ensures a widespread talent famine. This diversity demands a better recruitment process and poses a bigger challenge for larger organizations as far as motivation and job satisfaction is concerned. HSBC Overview HSBC Holdings plc is one of the largest banking groups in the world, ranked the fifth-largest company and third-largest banking company in the world in Forbes Global 2000. According to BBC report in 2005, the worlds second-largest bank already has 13,000 workers in call centers around world and their plan to reach the mark of 25,000 people in next three years. Within UK, HSBC has four call centers located at Hemel Hempstead, Leeds, Swansea and Edinburgh. These serve as the point of first contact for the customers. HSBC outsourced 3000 jobs in 2002 elsewhere within UK while creating only 300 overseas jobs. In 2004, 3000 job losses were reported while 550 jobs created overseas (Centrepois & Jefferys, 2004). In Fall 2003, HSBC, a world leading business bank, revealed a program of 4,000 job cuts in back-office centers in the U.K., and of new call center openings in India and China (Moriset). Call centers were set up by HSBC to provide improved customer service and retention of the existing ones. At HSBC call centers are recognized as an integral part of the company. The bank recognized different delivery channels for enhanced customer experience and satisfaction. Rationale for the Study Job satisfaction, motivation and staff turnover are all interlinked. Like individuals, organizations too change continuously in response to the ever-changing market conditions and globalization. Previous research indicates call centers seem to have high turnover of staff. Work pressure seems to be high and recruitment most often does not match the requirements. While some causes are common to all call centers, certain reasons are specific to particular call centers. In other words, differences and similarities have both been found in the study of call centers in general. The purpose of this study is to determine the link between job satisfaction, motivation and staff turnover primarily in the call centers and more specifically in the call centers of retail bank, namely HSBC. Meaningful insights and comparisons can be drawn from previous research available and from the company’s own stand on the issue of high staff turnover. The objective of the study is to identify and understand the nature of the work in call centers, the employment and labor relationships, which are primarily responsible for motivation and thereby turnover, and the impact that managers can have on motivating the staff. Objectives of the study This study will determine the motivators as specified by Herzberg that can help the individual satisfy the need for self-actualization as suggested by Maslow. Taking all the above factors into consideration, this paper will determine the causes underlying the high staff turnover in HSBC call centers and measure the level of satisfaction of employees at these call centers. It will also ascertain the reasons why HSBC is off shoring jobs rather than relocating elsewhere within UK. The employees’ perception of the pay structure, other benefits, the work environment, and the supervision would be analyzed in relation to the high rate of attrition since all of these contribute to the satisfaction level in employees. The paper will also reflect upon the impact of high staff turnover on HSBC. Finally, recommendations for improvement in providing job satisfaction would be made. References: Accel-Team (2006), Employee Motivation, the Organizational Environment and Productivity, 26 Oct 2006 Bibby, A (2000), Organizing in financial call centers, Report for UNI. Discussion Paper Biggs, D & Swailes, S (2006), Relations, commitment and satisfaction in agency workers and permanent workers, Employee Relations, Vol. 28 No. 2, 2006pp. 130-143 Callaghan, G. Dr. (n.d.), High staff turnover spells problems for call center operations, ESRC, 24 Oct 2006 Centrepois, S & Jefferys, S (2004), Globalization, relocation and the challenge to bank trade unions in France and Britain. Contact (2003), Health and well being in the call centre: ‘A healthy camper is a happy camper.’ 24 Oct 2006 Kirby, A (2006), The ethical call center where people clamor to work, HUMAN RESOURCE MANAGEMENT INTERNATIONAL DIGEST VOL. 14 NO. 5 2006, pp. 34-37 Moriset, B (2004), The Rise of the Call Center Industry, Centennial Meeting of the Association of American Geographers. Papasolomou-Doukakis, I (2002), The role of employee development in customer relations - the case of UK retail banks, Corporate Communications, Vol. 7 No. 1 pp. 62-76 Powell, S (2006), Amin Rajan in conversation with Sarah Powell, Management Decision Vol. 43 No. 5, 2005pp. 734-739 Richardson, R & Gillespie, A (2003), The Call of the Wild -call centers and economic development in rural areas, Growth and Change, Vol. 34 No. 1 pp. 87-108 Robinson, G & Morley, C (2006), Call centre management: responsibilities and performance, International Journal of Service Industry Management Vol. 17 No. 3, 2006 pp. 284-300 Tietjen, M A & Myers, R M (1998), Motivation and job satisfaction, Management Decision 36/4 [1998] 226–231 Unison (2003), Call Centre Pay - Briefing No 71, UNISON Scotlands public service union, 24 Oct 2006 Wisskirchen, C et al., (2006), The customer-led bank: converting customers from defectors into fans, Strategy & Leadership, Vol. 34 No. 2 pp. 10-20 Read More