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It is no wonder that in today's fast-paced, changing work environment, attrition rates are high. Nowhere is that more evident than in a customer contact center. By its very nature, the atmosphere is hectic and intense. Phones ring constantly and emails abound as customers by the hundreds seek answers about the organization's products or services.The environment is usually tightly structured with the focus on quantity and speed. In this highly charged setting, it's not surprising that employee retention is an ongoing challenge. According to GartnerGroup, overall attrition is averaging 15% per month.

With a competitive marketplace making it difficult to find skilled workers, it is important for an organization to hold on to its top performers. The costs of replacement — the actual dollars spent to attract, hire, and train new staff — are well documented. Now consider this: it is becoming increasingly clear that the effects of turnover are far greater than just replacement costs. High turnover begins a downward cycle that leads to:

• Reduced intellectual capital
• Decreased productivity
• Lower service levels

These factors, in turn, lead to lost customers, which significantly impacts the organization's bottom line.

Research confirms this pattern. A recent study by Towers Perrin cites a direct link between employee turnover and loss of customers. Companies that kept their turnover rates below 10% enjoyed a greater customer retention rate than companies whose employee turnover was around 15%. Another report on four high-turnover industries by Sibson & Co. found call centers experienced turnover rates of 31%. The same report also showed high turnover reduced call center earnings 43% for an estimated industry wide cost of $5.4 billion.

With a growing understanding of the consequences of these two sides of the service coin — the costs of replacement and the resulting loss of customers — companies continue to invest in reward and recognition programs to try to improve service and motivate employees to stay. It is therefore disheartening for them to continue to see high turnover in their ranks. Why aren't these programs creating the desired effect? The answer may lie in the following five pitfalls.

Next Page: The Five Pitfalls That Prevent Success