The Ultimate Guide of Call Center Shrinkage and How to Reduce it?

And one of the most important parts of the call center-specific workforce management is monitoring and reducing shrinkage. 

What is Call Center Shrinkage?

Call center shrinkage denotes the difference between the time customer service agents are paid for answering calls and to serve their customers, and the amount of time they actually spend doing their job and making/receiving calls. The difference in the two duration is known as shrinkage. It entails everything that customer service agents do in their time other than helping out their customers. 

There are several other definitions which too are similar to the one above in concept: 

  • Shrinkage is the unscheduled or scheduled activities which prevent employees from doing their duties right. 
  • Shrinkage is the elements which take your customer service agents away from being productive and serving their customers right. 
  • Shrinkage is the amount of difference between the number of staff employed, budget wise, and staff available to take responsibility of the primary tasks for which they have been employed.

While the definition of call center shrinkage can vary from one company to another, the reasons behind the event happening are classified into two primal parts. 

How to Calculate Call Center Shrinkage?

There are two ways to calculate the call center shrinkage value. One of it is through number of hours and another is through the number of call center employees. Let us look at both of those formulas:

In terms of the number of agents:

Shrinkage % = Number of agents needed to take calls/ number of agents available to take calls

Example: Let us say that you need approximately 100 agents to handle the call volume over a half-hour time t for meeting the service level target. Now if at any point in this half hour, 30 agents are not working, the shrink percentage would be 142.8% (100/70). 

In terms of the number of hours:

Shrinkage % = Total Hours (External + Internal Shrinkage) / Total Hours Available x 100

The formula extends to another question: What call center shrinkage percentage is considered okay? Well, the answer to that varies on an industrial level. The average shrinkage number however, falls in the range of 30 to 35% across the call center industry. Now to give you a better idea on when to use which formula consider this:

– Use the number of agents formula when you have to plan your manpower requirements for a campaign. The number agents formula will give you the ideal buffer you should have while planning your manpower allocation.

– The number of hours formula can be of great help when analysing an individual agent’s performance.

What Does Call Center Shrinkage Includes?

There are two elements that are included when call center shrinkage is calculated –

A. Internal Shrinkage

  1. Meetings – team and one to one
  2. Coaching and Training 
  3. System’s downtime
  4. Unscheduled breaks for using facility 
  5. Time spent in helping different departments
  6. Special projects work

B. External Shrinkage 

  1. Vacations
  2. Late-to-office
  3. Sick time
  4. Absenteeism
  5. Leaving early

Now that we have looked into the elements that constitutes the call center shrinkage number, let us move to the section where we look into the calculation part of the shrinkage.

How to Manage Call Center Shrinkage?

Tracking the call center shrinkage either manually or by using the contact center software can help in identifying when and where the shrinkage is happening in a day or during a process.  You might find out the maximum shrink percentage between the morning and afternoon times or at the time when team and one on one meetings are held. 

At times, call center shrinkage may also vary based on the weather and can help you plan the office space and features accordingly. Example in winters, agents may wish to spend time outside under the sun and extend their breaks. There can also be some departments or teams inside the call center where shrinkage is highest or there might be some employees who might be taking longer breaks. Analysing this data can give crucial information about an individual’s dedication to work and the work environment with in a team. 

By identifying how the shrinkage occurs in the first place, the call centre administrators can effectively make sure that the agents follow the schedule.

Apart from these manual measures, companies can also find a solution to call centre shrinkage issues by taking help from the technology. Here are some of those solutions. 

1. Workforce management software (WFM) can help automate the entire forecasting process, which often provides a superior accuracy over using the traditional spreadsheet approaches. This software can also help in scheduling agents and can even allow them to design their own schedules within a set boundary that the management defines for them. There are even some WFM solutions which offer skill-based routing abilities that can enhance the call center operations by improving an agents’ work experience.

2. The call center software today also come with the option for the agent to set their availability on ‘Break’. Tracking this duration can be easily automated using advanced call centre performance tracking metrics.

3. System-level call center solutions can not only lower the shrinkage but also bring down several inefficiencies by monitoring the agents’ performance. The agents who have been over-utilized for some time period would experience much higher stress levels that would lead to lowered performance, greater employee turnover, and greater operation expense while reduced customer satisfaction levels. On the other hand, there might be agents who are not utilized well and thus might leave for another job simply out of boredom.

Next Steps for Your Call Center

There are various Erlang calculators which can help businesses calculate the call center shrinkage according to the amount of time, call volume, service level, and average handle time. However, using predictive modeling techniques to your existing WFM will provide more accurate results and compensate for the variability in the system.

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