The Shocking Link Between Bad Customer Service and High Employee Turnover

high employee turnover

If you’re like most businesses, you lose between 10-25% of your customers every single year. There are many reasons a customer might leave your business, but one of the biggest culprits is an age-old foe: poor customer service.

What you might not realize is that your high employee turnover is intricately connected to bad customer service.

Sure, you could say that high employee turnover means that customers have to deal with inexperienced staff, but the problem is much deeper than that. It’s about your company culture and the way you run your business.

Understanding Employee Turnover

The U.S. is facing an employee turnover pandemic. Turnover hit an all-time high this year, coming in at 19.7% turnover–a full percentage point higher than 2017.

For call centers, a highly customer-centric work environment, the numbers are worse, ringing in at an astonishing 45% turnover.

National surveys by the Bureau of Labor Statistics (BLS) indicate that young workers aged 20 to 24 stay with organizations for only 1.1 years on average. Workers aged 24 to 34 stay for 2.7 years. Call center workers fall squarely in the middle (20-34) and they’re only staying in their jobs for a year.

Voluntary vs. Involuntary Turnover

To understand the problem, you first need to understand the nature of employee turnover.

There are two forms of employee turnover:

  1. Voluntary turnover
  2. Involuntary turnover

Voluntary turnover is when employees leave an organization by their own choice, whether that’s due to retirement, relocation, a more enticing turnover, personal reasons, or inter-office problems.

Involuntary turnover is when an employee is let go from an organization, despite the fact that they would choose to stay if they could. This can be due to poor performance, layoffs, absenteeism, or similar issues.

Not even the best organization in the world has a 0% turnover rate. In fact, some turnover is healthy. For example, if a talented employee who has been with the company for many years chooses to retire, they make space for new talent to take their place.

How Customer Service Fits Into the Picture

But when high employee turnover goes hand-in-hand with poor customer service, you’re dealing with a serious case of unhealthy turnover.

Of course, if you’re like many companies, you wouldn’t think to associate high turnover with poor service. They look like independent problems at first blush.

They’re not. Many companies spend so much time focusing on customer satisfaction that they forget to tend to employee satisfaction. And the truth is, employee satisfaction feeds directly into customer satisfaction.

Low Employee Morale Shines Through

A Bain analysis of more than 200,000 employees worldwide found that employee engagement levels drop significantly as soon as you leave the C-suite. They continue to drop as you progress downward through levels of management.

By the time you reach front-line employees, employee engagement is exponentially lower. Unfortunately, customers don’t interact with C-suite executives–they interact with front-line employees.

There are many causes of low employee morale, from closed communication to poor training to misunderstood expectations to shifting goals to lackluster compensation. Most of them can be boiled down to the same thing: employees feel unheard, unappreciated, and underpaid.

Dissatisfaction + Poor Morale = High Employee Turnover

One of the biggest causes of high employee turnover is workplace dissatisfaction.

Workers know when their managers trust and support them. They can also recognize when a manager is challenging them sufficiently. If their manager trusts their skills enough to offer new challenges and opportunities for growth, an employee is more likely to stick around.

If employees don’t feel valued or positively challenged by their work, this creates low morale. Most employees won’t stay in a work environment where they’re dissatisfied.

If several of your employees are unsatisfied and disengaged, they’ll leave. This is how your company gets high employee turnover.

Employee Satisfaction Translates to Customer Satisfaction

But before dissatisfied employees leave, they create problems with customer satisfaction.

When employees feel valued by an organization, they’re more likely to rise above the call of duty. This makes all the difference between a superstar employee and an employee who’s there to collect a paycheck and a passable reference.

Lack of personal and professional satisfaction results in a lack of incentive to help the company in the best possible way.

Your unhappy employees aren’t deliberately trying to ruin your customer experience. It’s just that they aren’t willing to go the extra mile.

Here’s the problem: when an angry customer calls, they’re not going to stick around unless they receive outstanding customer service. An unhappy employee will get the job done, but customers know when an employee is just doing the minimum.

At this point, employee dissatisfaction and customer dissatisfaction turns into an echo chamber. Front-line customer service employees are most likely to be yelled at when a coupon doesn’t process or something is out of stock. This reinforces their dissatisfaction with their job and sets them up for a repeat performance.

Eventually, unhappy employees leave. Unhappy customers are right behind them.

How to Fix High Employee Turnover

To fix high employee turnover (and fix your customer service) you need to be strategic.

Start by addressing your onboarding process. Are you training your employees for success, or sending them off to sink or swim? Do you have outstanding training staff, or are they, too, just collecting a paycheck?

You also need to look at your hiring process. Make sure you’re hiring employees who fit your culture, not just employees who fit the job on paper. In order to attract the right people, you need to build competitive compensation packages and review them annually.

Finally, keep in mind that the single greatest influencer of employee satisfaction is an employee’s direct supervisor. Your upper management must have the interpersonal skills necessary to make employees feel heard and valued.

Let’s Build a Better Customer Experience

This might sound like a hefty undertaking but remember: your employee satisfaction is directly tied to customer satisfaction. If you want to fix your customer service problem, you need to fix your high employee turnover.

That’s where we can help.

We know what it takes to build great relationships for employees and customers alike. That’s why we offer a suite of tools to ensure you provide the best possible experience for everyone involved.

Let us help you put your organization on the right path. Start the conversation today.