How Can I Calculate Shrinkage at my Contact Center

Call center shrinkage is the ratio of available agents to those who can’t take calls. Things happen. It’s a fact of life whether you’re operating a call center or not. When events like holidays, employee sick time, PTO, or absenteeism pop up, your customer service team isn’t functioning fully.

But how do you calculate shrinkage? Fortunately, you’ve come to the right place. This guide will cover everything you need to know to apply the shrinkage calculation effectively to maximize workforce optimization (WFO). We’ll also take a more in-depth look at what shrinkage in a call center is and why it’s essential to your contact center’s performance.

Let’s get started.

What is Call Center Shrinkage?

Contact center agents aren’t available around the clock. Call center shrinkage measures the difference between their scheduled shifts and when they can handle customer interactions. It’s a critical metric in call center management since it directly impacts staffing requirements, customer service levels, and overall operational efficiency. But first, to understand and calculate shrinkage in a call center, you have to know how to spot it. Here are some real-world shrinkage scenarios you might face in your own call center:

• Breaks and lunches: Scheduled breaks and lunch periods during which agents are away from their workstations and unable to take calls.
• Training and coaching sessions: Time spent on training, whether for new hires or ongoing training for existing agents, reduces the available time for handling customer calls.
• Team meetings: Regular team meetings, announcements, or discussions that take agents away from their primary duties.
• System downtime or technical issues: When call center systems, such as customer relationship management (CRM) software or phone systems, experience downtime or technical problems, agents may be unable to work effectively.
• Absenteeism and tardiness: Unplanned absences or late arrivals of agents can contribute to shrinkage, as the call center may be understaffed during those periods.
• After-call work (ACW): The time agents spend completing post-call tasks, such as updating customer records, writing notes, or performing follow-up activities, is considered shrinkage since they are not available to handle new calls during this time.
• One-on-one discussions with supervisors: Individual meetings between agents and their supervisors for performance reviews, feedback, or addressing specific concerns can also contribute to shrinkage.

Minimizing shrinkage hinges on accurately forecasting staffing needs, scheduling breaks and training sessions efficiently, implementing reliable technology systems, and managing absenteeism and tardiness. By reducing shrinkage, call centers can improve service levels, reduce wait times for customers, and optimize workforce utilization.

Why is Shrinkage Important?

Understanding and managing shrinkage is crucial to operating an effective call center for several reasons. From staffing to costs, understanding and implementing a consistent shrinkage calculation can drastically improve multiple facets of your business. Here’s how.

Staffing optimization

By accurately quantifying shrinkage, call center managers can determine the number of agents needed to meet customer demand and service level goals. This helps create optimal schedules and ensures the right number of agents are available to handle the expected call volume.

Service level maintenance

High shrinkage can lead to longer wait times, increased call abandonment rates, and lower customer satisfaction. By understanding the impact of shrinkage on service levels, managers can take proactive steps to minimize its effects and maintain the desired level of customer service.

Cost management

Overstaffing to compensate for shrinkage can result in increased labor costs, while understaffing can lead to poor service quality and potential loss of business. By accurately measuring and managing shrinkage, call centers can balance cost and service quality, ensuring efficient use of resources.

Performance forecasting

Incorporating shrinkage into forecasting models allows call center managers to predict future performance more accurately. This helps in planning for peak periods, adjusting staffing levels, and setting realistic performance targets.

Agent productivity and engagement

High shrinkage can indicate underlying issues such as inadequate training, poor work environment, or low employee morale. Managers can address these issues by monitoring shrinkage, identifying its causes, and improving agent productivity and engagement.

Continuous improvement

Regularly tracking and analyzing shrinkage data helps identify trends, patterns, and areas for improvement. This information can be used to optimize schedules, reduce absenteeism, improve training programs, and implement other initiatives to enhance overall call center performance.

Compliance and risk management

In some industries, such as healthcare and finance, call centers must comply with specific customer service and data privacy regulations. Understanding and controlling shrinkage helps ensure compliance by maintaining adequate staffing levels and minimizing the risk of non-compliance due to understaffing or agent unavailability.

By effectively managing shrinkage, call centers can improve operational efficiency, reduce costs, enhance customer satisfaction, and maintain a competitive edge in their industry.

How to Calculate Shrinkage

Learning how to calculate shrinkage involves a specific mathematical formula. It begins by determining your base staff requirements for standard call volume at each point in a given day or shift. Next, estimate the typical percentage of workers who cannot handle calls during said interval. This may vary from call center to call center, but the usual range is between 10% and 40%.

Once you settle on that number, you can begin your shrinkage calculation. Divide your base staff requirement by the percentage of unavailable workers, and you should arrive at the appropriate number of customer service agents you need to schedule.

For example, with a 40% shrinkage rate and 100 call center agents on the day shift, you would divide 100 by (1 minus 0.4) for 167 (100/0.6). Now you know that if you schedule 167 people, but 40 percent can’t answer phones for various reasons, the remainder available will be 100, and the phones will be adequately covered.

Conclusion

Learning how to calculate shrinkage is an important step for the evolution of your call center. Now, customers and agents can both breathe a sigh of relief knowing enough agents are on-staff to handle everyday call volume.

Understanding the origin of your call center’s shrinkage numbers is important, but with today’s technology, call centers can keep track of shrinkage numbers through state-of-the-art workforce engagement software platforms.

Verint provides all the tools you need to successfully manage call center staffing. You and your management team can handle shrinkage, unexpected spikes in call volume, and holiday or promotional rushes from one central dashboard. Contact our team today, and let us show you how partnering with Verint can make the most out of your call center.

FAQs

How do you calculate shrinkage in the call center?

Call centers calculate shrinkage by dividing their standard number of call center agents by the percentage of agents unable to take calls at any given moment. Typically, this ratio is anywhere from 10% to 40%.

For an example calculation, let’s say you have 100 agents and a 40% unavailable rate. With these numbers, your calculation would look as follows:

100 agents / (1 minus .4) = 167 agents needed for full coverage