[Shrinkage]
Introduction
Shrinkage in its simplest form is the “unproductive” time in a call center that actually “shrinks” the
productive time agents are available to serve customers. This unproductive time includes all offline time
where agents are not serving customers, such as in-office time for breaks, meetings, training, coaching,
etc., as well as out-of-office time for vacations, sick days and other types of leave. While these offline
activities are often necessary and even beneficial to the contact center business, they are considered
unproductive since they reduce the actual productivity of the call center and require additional staff to
offset the reduced productivity.
One of the main reasons shrinkage can be so elusive to measure is that no industry standard exists on
how to measure it. With no industry baseline, then, a call center must incorporate several different
considerations, based on its specific configuration, to determine the most appropriate way to measure
shrinkage. A call center can find shrinkage data in multiple locations based on such configuration options.
In most cases, measuring shrinkage involves using data from the workforce management system, and may
also include data from your ACD. As a basic example, if you track all unproductive schedule events in your
workforce management system (sick days, meetings, training, etc.) you can get the total picture of
shrinkage from there. If not the WFM system, you’ll need to include other sources such as your ACD,
payroll or timekeeping systems to get the full picture of shrinkage.
To fully utilize shrinkage data, the data should additionally be segmented
into planned and unplanned events. Planned shrinkage includes any
unproductive time already included and approved in the workforce
management planning process, such as pre-planned breaks, lunches,
meetings and training. Conversely, unplanned shrinkage includes all
unproductive events not pre-planned or approved in the planning process,
such as sick Leaves and last-minute coaching sessions that are scheduled
same-day. Another common type of unplanned shrinkage is productive time
lost when agents are out of schedule adherence. Moreover, separating
shrinkage into planned and unplanned categories is an especially important
part of the workforce management process in that, to some extent, you will
need to plan and account for these unplanned events in your planning
process. While being out of adherence doesn’t always affect the entire
daily total of productive hours, it does impact productivity and possibly the
call center’s service levels at the time of each adherence event.
Example:
Consider that floor shrinkage is 20% i.e. 20%
of all people scheduled for work won’t be
there.
For a given interval, 100 FTE are required i.e.
100 people actually sitting on the seats
waiting for calls to come or already on calls.
People that need to be scheduled will be
calculated by:Scheduled Head Count= 100/ (1-20%) i.e. 125
NOT, 100*1.20 this would be 120.
Some call centers also find it helpful to measure their controllable and uncontrollable shrinkage.
Controllable shrinkage in general includes unproductive time that the leadership and workforce
management teams can affect or change, such as meetings or training. Uncontrollable shrinkage includes
any unproductive events such as sick days or other types of leave that the leadership and workforce
management teams cannot affect or change.
Setting a goal for shrinkage
Much like the various methods of measuring shrinkage, there is also no industry standard when it comes
to establishing a goal for shrinkage. Most often, shrinkage goals are based on a combination of what’s
necessary for the business and what’s affordable based on the budget. In an ideal world, the call center’s
capacity planning process should include shrinkage as a part of the planning and budget approval process.
Taking such an approach ensures that a call center has built enough unproductive time into its staffing
plan to accommodate all unproductive needs. Also while actual shrinkage may be something a call center
uses as a data point for review when selecting a goal, it should not be used as a base for setting a goal.
Without a full shrinkage management program in place, your actual shrinkage may be significantly higher
or lower than what you really need or can afford.
To establish the first part of the shrinkage goal equation, you need to identify what’s necessary. In this
context, necessary can include what is required by law, like breaks and lunches, what is required by the
company, such as vacation time, and what is required by the business
leader, such as training and coaching. It therefore is practical to put
together a list of these assumptions by category to assist in the selection of
Example, if 24 agents are needed and
a goal, and for use later in reporting and measuring the actual results in
our shrinkage factor is 30 percent, then
those same categories. In order to consistently meet service level
24 divided by seven-tenths (70 percent)
objectives, contact centers need to add staff beyond their productive or
yields a requirement of 34 schedules.
base staff. Shrinkage therefore is occasionally called the “roster-staff
factor,” given the extra staffing required to “roster-up” base staff to cover
the amount of shrinkage expected.
Reason to consider shrinkage while calculating requirement:The numbers we've discussed so far are purely "agents on seat available/ready to take calls" numbers.
Here it is assumed that all agents are always available/ready to handle call workload.
However we all know that agents would not be completely available/ready throughout their entire
scheduled shift due to various reasons like breaks, meetings, training sessions, off-phone work, and so
on…... So, we must factor this reality into our requirement calculation so that we end up with the correct
number of agents on seat to man the phones.
In calculating staff requirements, a final adjustment needs to be made to factor in all the situations that
may cause an agent to unavailable or not ready. We refer to this adjustment factor as "shrinkage" and
define it as any time for which agents are being paid (shrinkage is unpaid as well) but are not available to
handle calls.
In most centers, shrinkage ranges from 20 to 35 percent. We account for this shrinkage factor in our staff
requirement by dividing the Erlang C staff requirement by the productive staff percentage (or one minus
the shrinkage percentage).
Shrinkage can be divided in Two Parts:-
In Office Shrinkage
•Team meetings
•Breaks
•One to One
•Up Trainings
•Quality Feedback
Out Office Shrinkage
•Sick Leaves
•Annual Leaves
•Comp Off
It can be explained as follows: - Once a call center’s workload is decided, an analyst uses Erlang C tables
and determines the "base" staff needed to meet the organization's service level and objectives. To
ensure that base staff is in place, the shrinkage factor is used to determine the exact quantity of extra
staff needed.
There also are several ways to look at shrinkage data that assist in the analysis of shrinkage as a whole.
One of these is comparing paid shrinkage to unpaid shrinkage. Paid shrinkage is unproductive time the
business pays the employee for and typically includes vacation, breaks, meetings and training. Unpaid
shrinkage is unproductive time the business does not pay the employee for and typically includes lunch,
unpaid absences and other unpaid types of leave.
The formula is: - Scheduled Staff = Base Staff / (1 - shrinkage percentage).
For illustrative purposes, let’s assume we are calculating agent requirement for a week; the base
requirement is 200 agents and the shrinkage is at 30%. Then the actual requirement would be 285 approx
post applying shrinkage.
Base Requirement = 200 agents
Actual Requirement = Base Reqd / (1 - % Shrinkage)
Actual Requirement = 200 / (1 - .30)
Actual Requirement = 285.7143 (i.e. 286)
Planning for Absenteeism
What base should be considered while calculating shrinkage (260 or 261):-
Shrinkage in a broad term means every activity that would keep an agent off the phone... this would
include his/her leaves & holidays entitlement, offline activities (training, meeting, coaching.Etc), breaks,
outbound calling (if any)... and once you have gathered all the information above, you calculate the total
time for the activities above against the annual working days.
For Example:-
If we consider 260 as the base for calculating shrinkage, then we say that we are calculating total working
days in a year assuming that an agent will work for 05 days in a week,
excluding the two week offs .So we Calculate total working days as follows
:2470 hrs @
Number of weeks in a year – 52 weeks
9.5hrs per day
of shift length
Working days per week – 5
Total working days in a year 260 (52*5)
Another way the people look to calculate the total working days for shrinkage calculation is:Total days in a year: - 365
Total week offs in a Year: - 104 (52*2.52 weeks and 2 week offs).
Total working days in a year:-261(365-104) in this method number of weeks offs in a year are subtracted
from the total days in a year. According to both the scenarios any of the ways considered for calculating
shrinkage will be considered correct, as both the ways give approximately the same result.