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How To Calculate Call Center Shrinkage

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Call center managers are often at a loss regarding their contact center’s actual productivity and overall efficiency.

The difference between the number of your agents available to handle customer’s queries against agents unavailable at a particular point in time is known as shrinkage.

Lowering your shrinkage is very important to enhance productivity in your contact center.

You can learn how to calculate and control shrinkage as you read on.

Call center shrinkage is the number of agents busily responding to customers’ calls divided by the number of agents who are not present at that exact point in time.

Assuming you have 50 call agents in your call center to deal with call requests.

The call center shrinkage is the difference between the number of agents available to take calls against the number of agents attending meetings or training, on breaks, or calling out sick.

Calculating the shrinkage with a shrinkage calculator helps you know the number of agents available to receive customer calls at a particular point in time.

Managing your call center is beyond having staff to handle calls at every point.

Shrinkage plays a pivotal role in knowing the number of agents you would need to attend to your customers.

Knowing the actual time, your call agents spend in responding to customers cannot be overemphasized.

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It allows you to measure how much time agents spend attending to other needs outside serving customers’ needs.

Numerous industries have their definition of shrinkage, though they are all related. Depending on the organization, call center shrinkage can be said to be:

  • Activities that may prevent a call agent from being efficient.
  • Events or activities that may make an agent unable to respond to the needs of customers.
  • You can measure shrinkage in your organization based on the number of employees and hours lost. Generally, calculating call center shrinkage gives you a clear picture of the call agents’ number to hire to man your call center.

Before calculating shrinkage, you must recognize the factors that constitute a call center shrinkage.

Factors that constitute call center shrinkage

Call center shrinkage falls under two main sections. They are internal and external factors.

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Internal factors

Internal factors that constitute call center shrinkage includes the feeling:

  • Team meetings
  • Lunch breaks
  • Meetings
  • System downtime
  • Training sessions

Some of the factors that constitute internal shrinkage can be controlled or managed.

It is challenging to eliminate paid breaks, but it can be monitored to ensure call agents strictly follow the procedures guiding paid breaks or lunch breaks.

External factors

  • Absenteeism
  • Vacation
  • Holiday
  • Early departure from work
  • Late resumption to work

Eliminating or controlling some of the factors that constitute external shrinkage is only possible if the problem’s root cause is addressed.

Lack of motivation or poor remuneration may cause early departure/ late resumption to work and absenteeism.

You can view call center shrinkage from the angle of planned and unplanned shrinkage.

Understanding planned or unplanned shrinkage can give you a fair idea of running your call center more efficiently.

How to calculate call center shrinkage in your call center

Let’s say you run a call center with 20 agents.

On a particular working day, you could have an agent who is late for work, another one gone for vacation, and another calling out sick.

One call agent could be on break among those present, while the rest are on hand to handle calls volume.

So you have 16 agents available for work out of your 20 call center agents.

You would be required to calculate the shrinkage for the four agents who are not available for work.

A model call center shrinkage calculator can help you in going with the process.

The following details and the shrinkage calculator are necessary to aid you in calculating the overhead /shrinkage for your call center:

  • Number of hours for a full-time equivalent (FTE)
  • Total statutory holiday
  • Total vacation days /year
  • Total days absent from work
  • Total days off
  • Total sick days/ year
customer-service

The following working examples are based on:

  • Total working days = 261
  • Total working hours per week = 40
  • Total number of agents = 100

 

Shrinkage Type Shrinkage Categories In days/ year
External Vacation 24
Public holidays 8
Sickness 8
Absenteeism 6
Team meetings 1.5
Internal One on one meetings 1
Paid breaks 10.8
Toilet breaks 4.3
Training session 5
Coaching 7
Total shrinkage 31.91%

 

Formulas to calculate call center shrinkage

Calculating shrinkage with the aid of the shrinkage calculator requires the use of two formulas. They include:

Formula to calculate staffing requirements

Formula to calculate an individual’s agent performance

Calculating staffing requirement

Let us take a look at some examples.

example1

 

Example 1

Let’s say you need 50 agents to handle your call volume in one hour to meet your service target.

Assuming 10 of the agents during the 1hour are not available to take calls due to internal or external factors that constitute shrinkage.

The shrinkage will be:

Shrinkage= (50/40) x 100= 125

From the above scenario, you can see that you need to hire ten more agents to meet your SLAs.

Based on the above calculation and after taking the shrinkage into account, you would need 125 agents to meet your SLA during the one hour.

When planning an exercise that would require extra staff, the staff requirement formulas would come in handy as it gives you a fair idea of the cushion you need for your campaign.

Example 2

formula 2

 

Assuming you require 80 agents to hand customers calls in half-hour intervals. And you have a shrinkage percentage of 35%. You will need a staff of……….to meet up with the demand.

With your shrinkage calculator :

Staff required= 80÷(100-35/100)x100 =123 staff. You can solve this by converting 35% to 0.35 and solve. 80/(1-0.35) = 123.07

Calculating shrinkage in terms of individual agent performance

formula 3

 

Individual agent performance is a measure of the utilization of individual call agents.

The number of hours an agent is available for work on their main task is divided by the total paid hours.

In driving utilization rates to improve efficiency, some call center organizations make the mistake of eliminating some critical internal and external shrinkages that may be counterproductive in the long run.

Acceptable shrinkage in a call center

The acceptable shrinkage varies from one industry to another.

However, the acceptable shrinkage for the call center industry is between 30- 35%.

The calculated shrinkage percentage is across 12 months.

Relationship between shrinkage and time

There is a significant relationship between shrinkage and time.

You would need to measure your call center shrinkage more frequently to get accurate results.

Shrinkage tends to be higher during the day between the hours of 9.00 am, and 11.00 am and also 2.00 pm and 3.00 pm.

The reason is that most call center organizations usually have their meetings around these times.

Similarly, shrinkage is higher during the summer months and Christmas period.

Most employees go on vacation during these periods, thereby leading to rising in external shrinkage.

Weather also plays a substantial role in the shrinkage rate.

During winter, more employees tend to spend more time during breaks to keep warm.

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How shrinkage affects call center productivity

The higher the shrinkage rate, the lower the productivity of the call center. It is a pointer to poor performance.

A higher shrinkage shows that more agents were unavailable to respond to customers’ calls, leading to increased holding time and longer wait from customers.

Such situations lead to service dissatisfaction and complaints from customers.

Call center managers can use the shrinkage rate to monitor customer’s satisfaction and how it’s enhanced.

Call center managers rely on the shrinkage rate to determine the required staffing strength of their call centers.

Calculating the shrinkage strength helps call center managers meet their service goals and improve their call center’s efficiency.

Controlling your call center shrinkage

Controlling shrinkage requires you first to identify catalysts that make employees extend their break schedules.

You can then begin to make headways by developing strategies that would make employees stick to the call center schedule.

With the aid of call center software, you can track call center shrinkage and work towards reducing it.

While you must note that not all causes of shrinkage can be controlled or eliminated, there are measures you can put in place to curb shrinkage in the call center significantly.

The following are measures taken to control call center shrinkage.

#1. Measure shrinkage regularly

Measuring shrinkage on a monthly or yearly basis is not enough to adequately measure your call center’s shrinkage rate.

To boost your call center’s productivity and efficiency, you would need to carry out shrinkage continually with the aid of a shrinkage calculator.

There are several standards by which you can measure shrinkage, such as service level targets, call volume, average handle time.

Fluctuations in these metrics affect shrinkage. So you can identify the factors that affect shrinkage.

work

#2. Deploy the use of software to monitor shrinkage

The use of software, such as Workforce Management tools (WFM), efficiently automates the shrinkage procedures’ overseeing.

It is not only more comfortable to use but also more efficient than manual tracking.

The WFM software tools allow you to plan schedules for agents and allow them to set their schedules.

#3. Deal with the issue of absenteeism

While you cannot control some elements of shrinkage, you should address the issue of staff absenteeism.

Workers’ grievances are the root causes of staff absenteeism.

You can address these issues by having more frequent meetings with your staff to understand the root cause of their grievances better and address them.

#4. Measure shrinkage in terms of hours and not in percent.

If your intention to measure shrinkage is to reduce it and enhance call center efficiency, it is best to formulate it in hours/ minutes per day rather than percent.

Though shrinkage value is usually expressed in percentage to determine the percentage of additional staff needed to meet the existing shrinkage, it bears no significant impact on the call center’s operation.

It is only helpful in the area of capacity planning.

Measuring shrinkage with your shrinkage calculator hours helps you identify and reduce the factors that increase shrinkage, thereby helping your call agents be more productive and efficient.

#5. Include all necessary parameters while measuring shrinkage

For most call centers, a low shrinkage indicates efficiency and productivity.

However, if you base such measurement on the exclusion of training or coaching, then the low shrinkage is probably a false economy in the long run.

You should factor in all items for best results, including out of center shrinkage and in center shrinkage.

#6. Calculate shrinkage For each department

Some call centers are multidimensional, and so you can calculate shrinkage for each department rather than the call center as a single unit.

The shrinkage rate for a help desk personnel would be higher than a call agent assigned to respond to customer complaints.

Calculating each department’s shrinkage gives call center managers a clearer picture of the areas where you can improve productivity and efficiency.

monitoring

#7. Divide your shrinkage measurement into planned and unplanned

For better results, you should divide your shrinkage measurement into planned and unplanned shrinkages.

Training, holidays, lunch breaks termed as planned because they are prearranged in advance, while unplanned shrinkages are unplanned training or meetings.

#8. Work with team leaders to lower shrinkage.

Calculating shrinkage allows you to determine the staff requirement needed and the base staff to stimulate an efficient and productive campaign.

It would help if you collaborated with the team leaders, managers, and trainers to analyze data from monitoring factors that affect shrinkage.

They can then develop a holistic strategy to manage, control, and reduce shrinkage.

#9. Ensure your agents are motivated

Your call agents can wear out as a result of responding to consistent and multiple queries from customers.

It would help if you created ways to motivate your staff and include training and coaching programs.

Giving your call agents incentives is a way of keeping them competitive and high in morale.

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