SHRINKAGE IN A CALL CENTER cvr

Shrinkage in a Call Center

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What is call center shrinkage?

Do you know how many of your agents are available to take calls at any given time and how many are on vacation? Call center shrinkage is the contrast between the two. Continue reading to learn how to measure shrinkage and control it.

Assume the call center has 100 agents to handle the incoming calls. Do you know if all 100 agents are available to serve customers at any given time? Call center shrinkage is the difference between the number of agents available to take calls and the number of agents on break, attending meetings/training, performing After Call Work (ACW), sick, etc.

Did you consider this when deciding on the size of your call center’s workforce? Staffing your call center entails more than just assigning an agent to each phone, and shrinkage is one aspect that influences how many agents you’ll need to handle your customers.

Let’s look at what shrinkage is, how to measure it, and how it affects the productivity and success of your call center, among other things.

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Definition of call center shrinkage

The number of agents actively serving customers divided by the number of agents that are unavailable at the time is call center shrinkage.

It’s the difference between the time you pay agents to service customers and the time they actually spend doing so. Shrinkage is the difference between the two. It allows you to monitor how much time agents spend on tasks other than customer service. Across the sector, there are many alternative meanings that are similar. They describe call center shrinkage as follows:

  • Anything that prevents an agent from attending to clients, such as planned or unscheduled performance activities
  • The factors that detract from your agents’ ability to be productive
  • The disparity between the number of agents hired and those available to serve customers at any given. 

While the meaning can differ from one company to another, it can be measured in terms of the number of workers or missed hours. It’s a popular planning tool for estimating how many agents to recruit. The factors that cause shrinkage can be divided into two groups.

What Does Call Center Shrinkage Include?

  • Internal Shrinkage
    • Team and one-on-one meetings are held.
    • Coaching and training 
    • Downtime of the system.
    • Breaks for using the facility that is not scheduled.
    • Time spent assisting various agencies.
    • Special tasks and projects are carried out.
  • External Shrinkage 
    • Holidays.
    • Arriving late to work.
    • Sick time.
    • Absenteeism ( A term that refers to the absence of an individual).
    • Leaving early.

Let’s move on to the segment where we look at the key aspect of the shrinkage now that we’ve looked at the elements that make up the call center shrinkage figure.

Why is calculating shrinkage important?

The following call center shrinkage calculation can be used to measure shrinkage. To begin, decide your base staffing requirements for normal call volume at various times during the day or transfer.

Estimate the typical percentage of employees who would be unable to answer calls during the interval using those calculations. This percentage may vary, but it usually falls between 10% and 40%. Divide your base personnel requirement by that number to get the number of jobs you can schedule.

For eg, if you have 160 call center agents on the day shift and a 20% shrinkage rate, divide 160 by (1 minus 0.2), for a total of 200. Now you know that if you schedule 200 people, but 20% of them are unable to answer phones for different reasons, the remaining 160 people would be able to cover the phones adequately.

This leads us to our next critical question: how can call center shrinkage be calculated?

How to calculate shrinkage percentage in a call center?

Shrinkage can be calculated using two formulas: one to determine staffing requirements and the other to assess individual agent performance. Let’s take a look at both.

In terms of the number of agents:

Call center shrinkage calculation formula: 

SHRINKAGE IN A CALL CENTER1

Example:

Assume you need 100 agents to manage your call volume in one hour to achieve your service level goals. If 30 agents are unable to take calls at any point during the hour due to the reasons mentioned above, shrinkage will be-

Shrinkage = (100/70) x 100 = 142.8

According to the example above, you have a 30% shrinkage, which means you’ll need to recruit 30% more agents (or, in this case, 30 more agents) to reach your SLAs. However, these 30 additional agents would shrink by 30%, necessitating the hiring of nine additional agents. This will go on endlessly. This is one of the main reasons why you should measure the personnel requirements using the shrinkage formula rather than the shrinkage percentage.

So, after calculating for total shrinkage, you’d need 143 agents to reach your SLAs in one hour, according to the above estimate.

When you need to figure out how many agents you’ll need, use this formula. It will provide you with the perfect buffer you need when preparing any campaigns that might require additional personnel.

In terms of hours:

When calculating call center shrinkage for an individual agent’s performance, use this formula:

Call Center Shrinkage Calculation example

In a call center, Bob manages a team of 12 officers. On any given day, he may have an agent on leave, another who is sick, and yet another who hasn’t turned up for work. One is at a break and the others are at work among those who have shown up. So, you now have eight agents that are currently serving customers. So, how do you figure out how much the four agents that aren’t available have shrunk?

Here’s a sample call center shrinkage calculator to assist you with the method.

You’ll need the following information to measure your call center’s overhead/shrinkage:

  • number of hours for an equivalent of full time (FTE)
  • Overall holiday days/year
  • Overall ill days/year
  • Total legal vacation
  • Total days absent
  • Other total days off

The Formula for Shrinkage

The contact center shrinkage formula is:

Normally, shrinkage is calculated over 12 months.

Worked Example of a Shrinkage Calculation

The equation below is based on:

  • 261 total working days
  • Total weekly working hours = 40
  • There are 100 agents in total.
  

In days/year

External shrinkage

Vacation/ Holiday

24

 

Public holidays

8

 

Sick leaves

8

 

Absenteeism

6

Internal shrinkage

Team meetings

1.5

 

One-on-one meetings

1

 

Paid breaks

10.8

 

Toilet breaks

4.3

 

Training sessions

5

 

Coaching

7

 

Evaluation

2

 

Team engagement sessions

2.8

 

System downtime

1.5

 

Others

10.4

Total

 

83.3

In this case, the total shrinkage would be 31.9 percent.

What is an acceptable shrinkage percentage in a call center?

You may be wondering, based on the formulae discussed above, what percentage of call center shrinkage is considered natural. Of course, the response will vary by sector, but the most widely accepted number for the call center industry is between 30 and 35 percent.

Usually, the shrinkage percentage is measured over 12 months. Let’s take a look at how it impacts the efficiency of call centers and how to reduce and manage the shrinkage.

How do shrinkage impacts call center efficiency?

A high rate of shrinkage indicates poor results. When agents are unable to assist customers, this results in longer wait and hold times, as well as lower customer satisfaction. While shrinkage is not a performance measure, it is often used by managers to see whether overall customer satisfaction can be improved. Shrinkage rates that are too high can put unnecessary strain on other agents, resulting in a drop in overall productivity.

Calculating shrinkage also aids managers in determining the number of agents required to handle inbound and outbound calls. Shrinkage is taken into account by managers to achieve predetermined service targets. Managers must track and control this metric daily to meet staffing needs and ensure overall call center performance.

How to reduce shrinkage?

To help reduce shrinkage in your call center, keep the following two things in mind:

  1. Include all events in your calendar to improve forecast and schedule accuracy. The more events you schedule, the more reliable your prediction would be. Average call time, after-work activities, emails, chats, meetings, training, breaks, lunch, and holiday are all examples of this.
  2. Keep track of how well the agents stick to their schedules and work with them to change over time. One solution is to generate monthly or weekly reports that you can share with your team to let them know about any recurrent adherences that need to be addressed for the next time span. Maybe they didn’t take a long enough break, or maybe a meeting went too long, causing them to fall out of line. You can also control adherence in real-time with a modern workforce management solution, allowing you to easily fix any issues that occur and get your agents back on track with your carefully prepared schedule.

How to manage shrinkage in the call center?

You can manually monitor call center shrinkage or use cloud-based call center software. This aids in determining when and where shrinkage occurs, as well as how to reduce shrinkage in your call center. It’s important to keep in mind, however, that certain causes of shrinkage are uncontrollable or unavoidable. 

Because most meetings take place between the hours of 10 a.m. and 3 p.m., you may find that shrinkage is greatest during that time. Weather plays a role in shrinkage as well; for example, during the winter, agents may choose to spend more time outside and may prolong their break. To solve this, you should design the office space and layout accordingly. Some departments/teams can also experience significant shrinkage. Analyzing this information will help you figure out which processes need to be improved.

You will be able to increase employee adherence to the call center schedule by finding causes that cause them to prolong their breaks.

Aside from these steps, you can also use the latest technology to keep shrinkage to a basic minimum. These will assist you in maintaining a solid plan for shrinkage reduction and routine monitoring.

Use Workforce Management Tools (WFM)

    • WFM features are now included in almost all contact center applications. The software can automate the shrinkage monitoring process, making it both simpler and more effective than the traditional spreadsheet method. You can schedule agents and even allow them to set their schedules within a given boundary using WFM software. A few WFM solutions have skill-based routing, which can help agents do their jobs better.

Continuous measurement/ monitoring of shrinkage.

    • The monitoring of shrinkages should be more an ongoing process than a monthly exercise. Shrinking is a factor that makes your call center’s overall efficiency, so you cannot increase performance without keeping a shrinking rate almost constant. This can only be achieved by continuously measuring it, solutions from new-age call centers help you to do so. Shrinkage can be measured based on various criteria, including call volume, service level objectives, and average handling times. Variations in these metrics directly affect the decline and can identify the factors which affect the decline by monitoring fluctuations.

Measure shrinkage in hours instead of percentage

    • The shrinkage is mainly calculated in percentage to determine which percentage of the additional staff you would need to meet the current shrinkage. Although this can be useful incapacity planning, it is operationally insignificant. In reducing shrinkage, it is better to say it within hours/minutes per day if you want to improve the efficiency. This helps you to identify and minimize causes that increase decline, hence helping agents serve clients better than taking longer breaks.

Address absenteeism

    • Absenteeism is a shrinkage component you can control. Managers can identify agents who frequently take leaves and deal with the cause. Managers should often have one-on-one agents to understand their problems and complaints. Absenteeism is usually a result of the lack of satisfaction with their job so that you can deal with this by providing them with information on how to overcome it.

Keeping your agents competitive

    • It is important to keep your agents motivated to handle repetitive queries from clients. You can set up a rewards program to recognize them for their hard work, as well as offering training and coaching. Another way to keep incentives competitive is to offer incentives. These days, call center solutions also offer gamification options to increase staff involvement and performance. Rewards for achieving a goal could include recognition on boards, badges, or gifts, such as trophies.

Conclusion/ Make Shrinkage Management an Ongoing Process

As previously stated, the rate of shrinkage in a call center changes occasionally. Decision-makers must regularly measure, review and reduce the shrinkage rate. Shrinking management must be continued by creating a one-month shrinkage provision and comparing the projection to the actual findings. In addition, they need to identify the root causes of shrinkage and take the necessary measures to reduce the rate of shrinkage to 35%.

Overall, the efficiency and productivity of call centers directly impact the shrinkage of call centers. but the rate continues to change occasionally. Managers need to measure and regularly monitor the rate to improve customer experience and achieve service objectives. You must continue to implement a robust strategy that stresses the regular shrinkage of internal and external shrinkage hours.

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GM, Voxco Intelligence

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