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WellPoint, Inc., is the largest publicly traded commercial health benefits company (in terms of membership) in the United States, serving over 35 million members, and is an independent licensee of the Blue Cross Blue Shield Association. In 2007, the organization generated revenues of $61 billion.
In each year since 2005, almost 15 percent of WellPoint's associates have been with the company for less than one year, a figure due primarily to organizational growth. The majority of new staff join the Service Operations area (customer service, claims, and membership/billing).
While Service Operations' voluntary turnover averaged 70% less than typical call center rates*, First Year Voluntary Turnover (FYVT) was almost three times the 2006 and 2007 figures. By segmenting termination data to analyze first year turnover, WellPoint recognized that the costly investment of recruiting, onboarding, and training new hires was not being returned to the business in the form of productivity gains-in both years, over one-third of the new hires left WellPoint within 12 months of their start dates.
Employing an 8-step analytics process, WellPoint, Inc.'s Director of HR Metrics & Analytics and his team embarked upon a comprehensive analysis of the First Year Voluntary Turnover problem and its likely causes.
Using our Human Capital Dashboard to source a wide range of metrics and data, allied with staff focus groups and interviews, the team found that turnover was highest among two specific job families and several geographic locations.
Armed with workforce and business data that pinpointed the areas of greatest opportunity for improvement, the team created a financial Cost of Turnover model using several data points, including cumulative associate salary costs (from hire date through departure), the average cost of recruitment and onboarding, and overtime costs incurred when covering for terminating employees. Doing so provided WellPoint Inc.'s Service Operations executives with specifics on the financial impact of high turnover and prompted the organization to set an aggressive FYVT 2008 goal of 30%.
Seeking to understand the multi-dimensional nature of the associate experience, HR created work streams across five areas-Hiring, Onboarding, Compensation, Training, and the Job Itself-and tasked each group to identify turnover drivers and risks. For example, members of the Compensation stream analyzed new hire salaries across different geographies within Service Operations' job families. A statistical correlation demonstrated that there was no clear relationship between starting salary and 90-day voluntary turnover; associates who left in the first 90 days did not leave because of their pay.
To gauge the impact of subsequent interventions, teams tracked such metrics as:
Scorecards are updated monthly and communicated frequently to business leaders to report progress, acknowledge successes, and continuously improve processes.
Service Operations currently reports a 13.5% improvement in First Year Voluntary Turnover. The reduction represents a conservative direct cost (excluding indirect costs such as decreasing morale and lost productivity) avoidance of almost $6M.
*Industry analyst estimate.