WINDSOR, Conn., Aug, 23, 2010 — Managers for financial services' contact centers used to pick up the phone to place a newspaper ad when they needed new staff. Now, managers rely on employee referrals, Internet job postings and their company Web site as the top places to recruit candidates, according to a new LIMRA study on contact center staffing practices within the financial services industry.
"Not only is the employee referral the number one recruiting method for financial services companies, but our research has found that contact centers that rely on employee referrals and Internet job postings have lower turnover and more successful operations than those that rely on the traditional newspaper ads," said Malcolm McCulloch, Ph.D., senior research and market consultant.
The study, last conducted in 2001, examined current recruiting, assessment, and training practices of 105 financial services contact centers from 65 different companies in the United States and Canada. In this year's study, LIMRA found that 84 percent of financial companies in 2010 rely on employee referrals to find strong contact center candidates as compared to 46 percent in 2001. In addition, the U.S. Bureau of Labor Statistics reports that companies across all industries have raised the education requirements to college-level for their contact centers. This is true for financial services companies as well, which now conduct five times as much college recruiting as they did in 2001.
On average, LIMRA found contact centers surveyed took of 38 days to hire a full-time contact center employee. On the extreme ends of the spectrum, one center hired reps in five days while another required 45 weeks.
LIMRA researchers found that not only has recruiting changed but so has the assessment of potential candidates. The cost of hiring and training a person who is ill-suited for a contact center position has motivated companies to expand the ways they gather information about candidates. One noticeable change is the increased use of phone interviews in 2010 (81 percent) as compared to in 2001 practices (68 percent). This tool allows contact centers to measure a candidate's oral communication and social skills directly-necessary for effective contact center staff.
More than half of contact centers now employ cognitive and other behavioral aptitude tests to determine a candidate's ability to learn; as well as to reveal whether the candidate is suited for service-oriented work. In addition, 10 percent more contact centers are requiring keyboard tests than in 2001.
The study found that financial services companies tend to invest more in training than those in other industries. Thirty-eight percent of participants surveyed said they spend $2000 to $5000 per hire; and 24 percent said they spent $10,000 to $20,000 per hire.
Once hired, employees are usually provided some sort of training. LIMRA found that the predominant training methods continue to be a hands-on coach or a classroom approach. One in four contact centers are also using virtual training and more than a third use self-directed training, such as PC tutorials and self-paced book training. More than 60 percent of financial services contact centers reported their training lasts between two and three months and encompasses a variety of topics that include product knowledge, compliance and regulatory information, service skills and cross-selling techniques, as well as basic PC and Internet systems. This is more than four times the length of the average training time for other industries.
"As with all aspects of business, every dollar needs to count," noted McCulloch. "Overall, we learned that top-performing centers are using more tools to assess their candidates before hiring."
LIMRA is a worldwide research, consulting and professional development organization that helps more than 850 insurance and financial services companies in 73 countries increase their marketing and distribution effectiveness. Visit LIMRA at www.limra.com.