A call center employs 900 agents. Every month 60 employees leave the company and

Question

A call center employs 900 agents. Every month 60 employees leave the company and 60 new employees are hired. a. How long on average does an agent work for this call center? Average working time months
Suppose the cost of hiring and training a new agent is $1,200. The manager of this call center believes that increasing agents’ salaries would keep them working longer at the company. The manager wants to increase the average time that an agent works for the call center to 36 months, or three years. b-1. Given the current average working time for agents at this call center, determine the current annual cost for hiring and training. Current annual cost $ b-2.
Assuming the average time that an agent works for the call center is increased to 24 months, determine the new annual cost for hiring and training. New annual cost $ b-3.
If the time an agent works for the call center is increased to 24 months on average, how much could the company save on hiring and training costs over a year? Annual saving $

Explanation / Answer

a) Average working time = Total number of agents / Monthly turnover = 900/60 = 15 months

b-1) Current annual cost = 60 employees hired per month * 12 months * $ 1200 cost per agent = $ 864,000

b-2) New Annual turnover = (900 / 24)*12 = 450

New annual cost = 450*1200 = $ 540,000

b-3) Annual saving = 864000 - 540000 = $ 324,000

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