Royal Caribbean Cuts Turnover and Increases Productivity
Royal Caribbean Cruises Ltd. (RCCL) is a global cruise vacation company that operates Royal Caribbean International, Celebrity Cruises, Pullmantur, Azamara Cruises and CDF Croisieres de France. The company has a combined total of 40 ships and offers unique land-tour vacations in Alaska, Asia, Australia, New Zealand, Canada, Europe and South America.
RCCL was experiencing greater than acceptable rates of voluntary employee turnover. In an effort to help retain more agents, RCCL offered a number of attractive incentives including catered lunches, a fitness center with full-time fitness instructors, and a free cruise after a year on the job. However, agents were still quitting at a rate of approximately 63% per year. With a center housing 525 agents, that equates to more than 300 people annually.
Additionally, turnover was expensive. Every agent hired participates in a four week training course, and does not start taking calls from customers until the last week. Considering direct and indirect costs, turnover was conservatively estimated at $5,000 per person, or more than $1,500,000 annually.
RCCL implemented the Customer Service Fit Index (CSFI)
assessment to identify and screen out turnover-prone job applicants, and a simulation assessment
to identify top-tier performers.
The Customer Service Fit Index (CSFI) is a web-delivered assessment designed specifically to identify a candidate’s work style and ability to tolerate various job demands related to customer service work. People who are frustrated, aggravated or otherwise bothered by customer service job demands are significantly more likely to turnover.
The simulation is a web-delivered multi-media assessment that simulates various work situations related to customer service, including having candidates respond to mock customer calls, and navigate the system to analyze and solve problems.
The strategy was to implement a multiple-hurdle selection approach to systematically identify, and eliminate candidates who did not align well with the demands of the Customer Service position.
Candidates who were rated as “Lower Turnover Risk” or “Marginal Turnover Risk” on the CSFI were directed to complete the simulation, while those who were rated as “Higher Turnover Risk” were excused from the remainder of the assessment process. Candidates who failed the simulation also were excused from further consideration.
RCCL previously held 6 to 8 training classes a year with 35 new hires each. Following implementation of the assessment process, there were only four training classes held, with no plans to hire additional staff for the rest of the year.
Additionally, the results demonstrated a significant impact for the assessment solution. Overall turnover was reduced by 57% (63% compared to 25%). At the same time agents are now fielding more calls than ever, from between 80-90 per eight hour day. That represents an additional 1,100 calls per day or roughly an extra 300,000 calls per year.
Return on Investment (ROI)
To estimate the gross return for RCCL based on the implementation of the assessment solutions, we determined the reduction in new hires as well as the associated cost per person.
With a 57% reduction in employee turnover for Customer Service positions, RCCL hired 188 fewer people. It was conservatively estimated that the organization lost approximately $5,000 with each employee who quit as a result of their investment in recruitment, selection, training and onboarding.
Based on the impact of the assessment solution for reducing turnover, it is estimated that RCCL saved more nearly one million dollars during the first year of use.
RCCL took a number of steps to address the problem of employee turnover that was plaguing its Wichita, KS contact center. Based on the effectiveness of the assessment solutions implemented, in addition to changes to its training policies and procedures, RCCL was able to significantly cut employee turnover, dramatically boost agent productivity, and net a considerable return on investment at the same time.
DeGarmo develops and distributes innovative talent assessment and development solutions to help clients maximize revenue growth, productivity, and workforce stability. Our award-winning pre-employment assessments, leadership assessments, and training solutions have been delivered to millions of job candidates worldwide through our talent platform, or through integrations with major applicant tracking system (ATS) providers. More than 10,000 HR professionals have received HRCI or SHRM certification credits through DeGarmo’s webinars on critical HR topics such as talent assessment, interviewing, leadership, turnover reduction, and culture fit.
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