Long hours, low wages, volatile scheduling and poor working conditions can be common pitfalls for workers in the service industry, but nasty customers are another leading reason for high turnover, a new academic study says.
Researchers from the UBC Sauder School of Business in collaboration with the UBC-Okanagan Faculty of Management, the University of Illinois and the University of Queensland surveyed 420 retail workers and 363 restaurant employees in the Philippines, and 940 call-centre workers in Canada.
They found a significant correlation between customer mistreatment and the rate at which employees quit, even when taking into account other factors such as low pay or poor working conditions.
“What we ended up finding was that the unfair treatment of employees by customers resulted in higher levels of turnover. … Employees experience higher levels of negative emotions and become emotionally exhausted as a result of these encounters, and they ultimately quit,” said Danielle van Jaarsveld, a professor at UBC Sauder and the lead author of the study.
The study will be published in the Journal of Service Research.
The authors say better management at one of the companies included in the study would have reduced turnover by 94 employees, saving it more than $300,000 over a 16-month period.
“When you think about the expense that is the cost of recruiting, hiring and training new employees to come into these roles, it can be a significant loss for companies if they have a high turnover rate,” Prof. Van Jaarsveld said.
And those costs spread far beyond the overhead, said UBC Sauder professor Daniel Skarlicki, one of the study’s co-authors.
“That’s huge in terms of cost of hiring and training, but even more so in terms of customer loyalty,” he said, explaining that employee turnover and operational disruption can discourage existing business.
“The costs in terms of loss of customers can be immense,” he emphasized.
Cody Osmond, 28, can relate. He said he once worked at a major drugstore chain during the busy Christmas rush.
“I had a customer throw a fit and start screaming at me, swearing and yelling slurs, until I started crying,” Mr. Osmond said. “When I went out back to try to calm down, management was like ‘Hey, we really need you back out there, so …’ I almost quit on the spot.”
Prof. Van Jaarsveld said the way supervisors respond to such experiences can have a major impact on whether employees leave, acting as a sort of buffer.
“If they have a supervisor who can help offset those negative interactions, that can help reduce the likelihood that they’ll quit,” she said.
The researchers say supervisors can do this simply by listening to workers’ concerns and providing them with information about why certain decisions are made.
“Something we also see in a lot of workplaces is that people who are promoted into supervisory roles are often really good at their job, but are not necessarily given the training to help support the employees who they’re managing,” Prof. Van Jaarsveld said.
She said that many companies fail to manage this challenge.
“What we’re talking about here is just common sense," Prof. Skarlicki said. "But what we find is that in many organizations, when it comes to treating people fairly, common sense does not equal common practice.”