Employee Retention and Well Being Issue A

Volume 15 Issue 2 June 2017

Money Cash Flow Inc.: HR Analytics Applied to Employee Retention and Well-Being Issues – Part A Case 1, 2 prepared by Michel COSSETTE3 and Gabrielle REYBURN4

Company management committee Date: December 9, 2015 Attending: George Douglas, CEO, and Tony Martel, Head of Operations for the Call Centres Division – Client Contact Centre – of Money Cash Flow (CCC-MCF) Mr. Douglas: Hello, Tony, how are things? Tony: Pretty crazy these days, but I’m coping. And you? Mr. Douglas: Yes, same here. In fact, I need your help with something fairly important. Tony: Sure, what can I do for you? Mr. Douglas: You know as well as I do that the way our company is managed has a direct impact on our reputation. To meet the objectives of our strategic plan, we need to take some steps to retain our standing as one of the best employers in North America. We have a problem, though. HR just gave me a report showing that our internal and external turnover rate has been rising over the past two years, especially in the Call Centres Division.

1

Translation from the French by Terry Knowles of case #9 30 2017 001A “Le cas Money Cash Flow Inc. : L’analytique RH appliquée aux enjeux de rétention et de bien-être au travail – Partie A.”

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Fictional case inspired by real situations. Some aspects have been modified to preserve the anonymity and confidenti ality of the organizations on which the case is based.

3

Michel Cossette is an associate professor in the Department of Human Resources Management at HEC Montréal.

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Gabrielle Reyburn is an MSc student in Management at HEC Montréal.

© HEC Montréal 2017 All rights reserved reserved for all all countries. countries. Any translation translation or alteration in any form form whatsoever whatsoever is prohibited. prohibited. The International Journal of Case Studies in Management is published on-line (http://www.hec.ca/en/case_centre/ijcsm/) (http://www.hec.ca/en/case_centre/ijcsm/) , , ISS ISSN N 19111911-25 2599 99.. This case is intended to be used as the framework for an educational discussion and does not imply any judgement on the administrative situation presented. Deposited under number 9 30 2017 001AT with the HEC Montréal Case Centre, 3000 chemin de la Côte-Sainte-Catherine, Montreal, Quebec H3T 2A7 Canada.

Money Cash Flow Inc.: HR Analytics Applied to Employee Retention and Well-Being Issues – Part A

Table 1: Internal and external turnover rates at CCC-MCF

2015 st

1 quarter 2nd quarter 3rd quarter 4th quarter

Internal 4.2% 4.5% 5.3% 6.5% 20.5%

2014 External 7.1% 8.3% 9.2% 10.3% 34.9%

Internal 4.1% 5.1% 5.5% 4.4% 19.0%

External 6.8% 5.9% 8.2% 7.1% 28.0%

Tony: Wow! I see what you mean. Between 2014 and 2015, the external turnover rate rose by 7%, and rates were up every quarter in 2015. Hmph! That’s a bad sign. Mr. Douglas: Solving this problem has to be a priority. This constant loss of employees is affecting customer service. This year’s turnover rate is already at 55.4%. If the trend continues, next year we’ll be over 60%! That’s way too much – it’s costing us a fortune in terms of recruitment, training, intake, etc. We must bring the rate down. What’s more, in the next few months there’ll be a huge demand for customer service, given that we recently announced upgrades to our group insurance plans. We need to come up with a plan to retain employees and motivate them.

Tony, do you think you can help me with this? Tony: It’s certainly a huge challenge, but I’m ready to work with you and do everything I can to share my knowledge here. I think we need to start by consulting the Human Resources Department to find out whether they have any more details on these employee departures. Perhaps we should be looking more closely at why they left. Mr. Douglas: Makes sense. I’ll leave that with you. Could you give me a quick progress report at our next meeting? Tony: I’ll get to work on that today. Mr. Douglas: Thanks, Tony!

HR Management Committee Date: December 10, 2015 Attending: Tony Martel and Marianne Lee, Human Resources Advisor Marianne: Hi Tony, how did the management meeting go? Tony: Not bad, but we have a lot on our plate. Senior management saw your report on employee turnover rates. We need to work on this problem, and come up with solutions.

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Marianne: We definitely need to find solutions! Money Cash Flow Inc. invests nearly $9 million a year in training. And the data shows that new employees stay for just three or four months on average. Yet the company had invested in bringing all those people on board – I imagine management is mainly concerned about the enormous cost this represents in terms of replacing them, customer service and so on, but there are certainly other issues that need to be examined more closely. Tony: Yes, exactly. Marianne: Good. First of all, we have to find out why employees are leaving. In fact, I have a report listing the different reasons employees gave over the past year. Table 2: CCC-MCF employees’ reasons for leaving, compiled by HR Reasons for leaving

Relocating

Lack of creativity

Replacement hire completed

Retirement

Illness or accident

Death

Return to school

Layoff

Too much work

Did not meet requirements

Too much supervision

Dismissed

Unrealistic objectives

Administrative closure

Found a better job

Administrative dismissal

Commute time

Failed probation period

Lack of autonomy

Contract ended

Tony: Hmm... OK. But Mr. Douglas is expecting us to put together a dashboard with indicators illustrating the turnover problem, and wants us to link them to performance indicators.

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Company description Money Cash Flow Inc. (MCF) is a leading Canadian financial services company offering a wide range of services and products in the fields of life, health, home and retirement savings insurance in Montreal, Toronto, Ottawa, Calgary, Vancouver and other major Canadian cities. The company offers individuals, groups and companies access to its services and products through its sales offices located across the country. MCF has been operating in Canada since the early 1900s. Its corporate culture is built on service quality. The company, which has a broad distribution network, has forged solid relationships with some of the largest employers and associations in Canada. It is a market leader, with millions of clients across the country. MCF’s top priority is maintaining customer service quality and ensuring lasting relationships with its clients. The company is committed to offering the best customer experience through all its points of communication, in every market where it operates. MCF wants its clients to enjoy peace of mind with the knowledge that their financial security is protected throughout their lives. Exceptional customer service is crucial to the company’s objectives. After all these years, the company’s long-term commitment to its clients remains unshakeable. Indeed, its ability to maintain lasting relationships with clients has made the company a leader in the Canadian financial services market, and explains why it now serves millions of Canadians. Mission, vision and values

MCF wants to help create a world where people enjoy excellent physical and mental health, live in happy communities, and look forward to a guaranteed future. To make this vision a reality, the company strongly believes that it has the responsibility to act in such a way as to make a constructive contribution to society. This philosophy is the driving force behind the products and services it chooses to offer. The company’s mission is to protect its clients’ financial security, at every stage in their lives. In concrete terms, this means improving people’s lives. Its day-to-day operations are founded on certain values, which are fostered by its managers and executives: 1. Ethical conduct: set high standards for ethical behaviour and governance. 2. Engagement: appreciate employees’ diversity and talent, encourage, support and reward them and help them reach their full potential. 3. Client focus: offer clients suitably tailored financial solutions and always work in the client’s interest. 4. Excellence: excel in everything it does, through motivated employees and quality products and services. 5. Value creation: create value for clients and shareholders, and for communities. The company has grown in recent years. Its experience, financial stability and knowledge of Canada are a winning combination in all its markets. And this in turn allows it to offer its clients the products they need.

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Its business

MCF counts on an extensive network of seasoned employees, with 4,075 professional advisors across Canada and 7,065 representatives and brokers. In recent years, the company has been growing nationwide. MCF is highly respected in the financial service sector. It has diversified its products and markets, and is seeking to balance its short-, medium- and long-term performance. The company wants to be a lasting presence in its clients’ lives. It also receives excellent grades from rating agencies. This is reassuring for its clients when they are making business and risk management decisions. Achievements

The company is very proud of its achievements and its employees across the country. Ranked among the top 20 employers in Canada, since 2000, MCF has been recognized as one of the country’s leading companies in terms of human resources management and financial management. This recognition is a tribute to its constant commitment to its employees and its social responsibility. In 2013, MCF was also chosen by consumers as the best life insurance company, in a survey conducted by a consumer protection organization. Business strategy

The company’s business strategy emphasizes activities that generate growth and higher returns for the company, while ensuring financial stability. Its growth strategy has the following objectives: • •

Be the most efficient and effective life insurer in Canada; Grow its business in the United States so that it contributes more to the company’s bottom line.

The Call Centre Division at Money Cash Flow Inc. Most contact with MCF clients happens over the telephone, i.e., through a call centre. More specifically, a call centre is defined as a multipurpose virtual or physical centre for creating privileged remote links with current or potential clients through the use of systematic, planned and controlled use of the telephone and other communication systems and/or information management interfaces. 1 Some positions are assigned to taking client calls (inbound ), while others are devoted to promoting the company’s programs and packages to clients (outbound ). The call centres operated by MCF are divided into these two service types: one specializing in customer service, and the other in marketing sales. 1

Translation of the definition in Martin LaFerrière-Simard, Les enjeux et les pratiques de la gestion de ressources humaines dans quinze centre d’appels performants , MSc thesis, HEC Montréal, 2000.

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About 70% of MCF employees work at these centres. This means that the centres are important business units and play a major role in the company’s operations. This approach to work organization is strategic, allowing the company to establish relationships with current or potential clients. MCF call centres serve to build bridges between the company and its clients. One major characteristic of its call centres is their use of sophisticated technological tools: an automatic call distribution system, a pre-routing or pre-processing system for calls, voice messaging for providing information, a synchronized transfer system for calls and screens, an automatic dialing system, etc. In other words, its call centres operate in a highly technological environment. This heavy reliance on information technologies (computers running complex software, telephone systems, etc.) means that it needs to hire employees with strong skills in this area. Human resources strategy Staffing

Call centre agents are recruited by three main means: newspaper ads, posts on the company website, and internal referrals (see exhibit for the skill set required for call centre agents). Employees are then selected through a structured interview and an integrity test. New recruits are integrated fairly quickly. On the first day, they visit their workplace and meet colleagues and their immediate supervisor. The supervisor then explains job expectations, and familiarizes them with the tools at their disposal. Lastly, they attend a presentation on the company’s policies and procedures. On the second day, they start their training. Initial training comprises a number of modules (described below) and is supposed to last three weeks. However, because of a lack of time and co-operation on the part of operational managers, it is not always easy for agents to fit in all this training. They are, therefore, quickly put to the test in their new functions. Three hundred and ten agents currently work at the Montreal call centre: almost as many men as women, with students looking to get a foot in the door and move to a different position within the company and people interested in stable employment. MCF encourages job creation for young people and organizes attractive internships. Agents can work different shifts, but they may have to do some overtime during busy periods. Training

The company recognizes that its human capital – a strategic advantage in the industry – is the main source of its value added. Exceptional customer service is at the heart of its business objectives. To reach this strategic objective, the company supports its agents in their professional development. For instance, all new employees must undergo 20 hours of training on client relations. They must assimilate and apply the strictest standards in terms of professional ethics and integrity in all their duties and all their dealings with clients. They also receive training specific to their positions. The goal is to have all agents acquire specialized skills and thorough expertise allowing them to perfectly meet clients’ needs.

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The training program includes: •

two modules (35 hours each) on the company’s products and services

•

one module on client relations (21 hours)

•

one module on managing difficult calls (7 hours)

•

one module devoted to observing experienced agents (7 hours)

From Montreal to Vancouver, call centre agents are the heart of MCF and its chief asset. The company wants its advisors to have the knowledge, skills and abilities they need to help clients prepare financial plans. In working to establish lasting relationships with clients based on trust, the advisors must acquire an in-depth understanding of their clients’ goals and personal lives. Ergonomics and work organization

MCF also offers a comfortable, ergonomic work environment. In fact, the company has invested close to $2 million in furniture and equipment. The workplace design is intended to optimize the work ambience, since research has shown the physical health risks for workers who remain seated all day. The call centres are light-filled, open-plan spaces, with break rooms where agents can relax or decompress, in particular after especially difficult calls. The company also offers great flexibility in work schedules to help agents balance their home and work lives. Agents can choose different shifts during the day. Compensation

MCF is committed to rewarding employees fairly for their contribution to their team and to the company. For instance, the company offers pension and savings plans, an annual bonus plan and flexible work schedules for many positions. Its compensation is market co mpetitive. According to the company, the agents, advisors and professionals who make up the overall Canadian team share their concern for clients and their commitment to providing exceptional service quality, and have access to cutting-edge solutions. Everything seems to be in place to attract and retain top talent in the financial services industry. Now let’s look more closely at the context for call centre positions.

The problem The company has been through some difficult times in the past two years. In terms of human resources management, some managers report seeing changes in employee attitudes and behaviour. They say that new recruits are not interested in their jobs or in clients, but only in getting promoted quickly. This has a considerable impact on agents and the company. For example, at the Montreal call centre, over 50% of agents quit in the past year because they were dissatisfied. In addition, a recent investigation by the Human Resources Department found that 36% of agents are dealing with stress-related issues. The managers disagree with the study, however, claiming that agents exaggerated their symptoms and that the HR people chose individuals susceptible to stress.

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Along with these observations and the HR data, the number of customer complaints, saying that agents are impatient and often irritable on the telephone, have skyrocketed over the past year. As a result, the customer satisfaction rate seems to have declined in the past few months. At the same time, agents are less inclined to answer clients quickly and provide correct information, and this lack of motivation appears to be interfering with the company’s efficiency and effectiveness. In the past year, the HR professionals have found it more and more difficult to attract and retain workers at most of the company’s call centres, especially the Montreal centre. The desired employee profile may be part of the problem (see exhibit), since overall it is fairly general. The goal, then, is to reduce employee turnover and improve employee satisfaction and well-being, thus maximizing organizational performance. Labour costs account for 55% of the company budget. Given the costs related to absenteeism and turnover, this issue has become critical not only for the Human Resources Department, but also for senior management at MCF. To rectify the problem, Tony Martel, Head of Operations for the Call Centres Division, has asked for reliable indicators to be able to monitor the situation and develop appropriate action plans.

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Exhibit Requirements and Skills for Call Centre Positions •

•

• • • •

At least two years’ experience in a customer service position with varied duties, i.e., experience in front-line customer service and with investment funds and other investments. Post-secondary diploma in a field related to business and courses in a field related to securities or financial services. Familiarity with computers, in particular email and MS Word and Excel. Excellent aptitudes in the areas of interpersonal relations and customer service. Good aptitudes for research and decision-making. Proven fluency in written and spoken French and English.

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Employee Retention and Well Being Issue A

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