What Is Call Center Shrinkage and Why Is It Important? A Brief Guide

Customer experience can make or break your business, with US companies making losses that run as high as $62 billion every year. This makes call center shrinkage one of the most essential workforce management metrics. You see, at any given time, not all call center agents are at their stations receiving calls.

Some may be away on breaks, others may be on vacations, while the rest may have called in sick. The difference between the agents at work and those away is known as call center shrinkage.

Read on to find out more about call center shrinkage and why it matters so much.

What Is Call Center Shrinkage?

Do you know how many of your call center representatives are currently available to take calls? Let’s say you have 100 agents in your company. How many out of those are in the office receiving calls?

How many are out on breaks, how many called in sick, and how many are attending training or meetings? Call center shrinkage accounts for the agents actively at work and those that are not.

The time you pay for them to work versus the amount of time they actually spend working. Shrinkage allows you to measure how much time agents spend helping customers and how much they’re doing other things.

What Constitutes Call Center Shrinkage?

There are external and internal shrinkage factors to consider. External factors include things like laziness, absenteeism, holidays, vacations, and sick leaves. Internal factors include lunch breaks, schedule breaks, after-call work, meetings, training, etcetera.

It could also be unforeseen emergencies, farewell office parties, and unplanned activities. All these factors need to be put into consideration when scheduling the number of agents to assign the call volume. You see, there is so much more into staffing a call center than just assigning an agent to each phone.

Call center shrinkage happens to be one of the most essential factors to consider. Otherwise, you’ll have frustrated customers who can’t reach any agents when they need help. Some of these factors may be easy to control, but the rest need to be managed.

For instance, you can curb laziness and absenteeism by addressing employee grievances. Eliminate the chances of having unhappy and unmotivated employees. Manage factors like paid leaves and holidays by monitoring them to ensure all guidelines are followed.

How Does Call Center Shrinkage Impact Efficiency?

When you experience a high call center shrinkage, it’s an indication of low performance. When your call center representatives are not available to talk to customers, it results to longer hold and wait times. This ultimately reduces customer satisfaction rates and risks company reputation.

Shrinkage may not be a performance metric. However, you can use it to determine if there’s a way to improve your overall customer experience. Having high shrinkage rates could potentially put undue pressure on available call-center representatives.

This will ultimately decrease overall productivity. This makes it important for you to calculate call center shrinkage. It’ll help you decide how many agents you need at any given time.

Take call shrinkage into account when considering your predefined service goals. It’s crucial for call center agencies to monitor and track this metric regularly. This way, it’s easier to meet staffing requirements as it’ll impact the overall efficiency.

How Do You Calculate Call Center Shrinkage?

There are two different formulas available for calculating call center shrinkage. The first method calculates staffing requirements for the other measures individual representative performance. It’s imperative for you to have an overhead calculator for accuracy.

Using the first method, let’s suppose you need 100 representatives to take out the call volume and meet your target. If 30 agents are unavailable due to various factors, it means you’ll have a 30% shrinkage. Essentially, you may think that with a 30% shrinkage, you’ll need 30 more agents to meet your goals.

On the contrary, this could not be further from the truth. The thing is, those 30 agents will also have a shrinkage of their own. You’ll require nine more representatives.

This will continue for all additional call center representatives you add. Instead, use the shrinkage formula to understand how many representatives you need. For 100 agents with 30 unavailable representatives, shrinkage will be (100/70) x 100 = 142.8.

Case in point, don’t base it on shrinkage percentage alone. According to our formula above, you’ll need 143 call center representatives. The extra representatives will cover calls when others are unavailable to meet your service goals.

How Do You Minimize Call Center Shrinkage?

Minimizing call center shrinkage is easy using call center software. It’ll help you identify when and where shrinkage takes your place. Most businesses find that shrinkage occurs in the early mornings and afternoons.

Most offices schedule meetings during these times, hence unavailability. Seasonally, most shrinkage percentages occur during school dismissal time and summer months.

You may also have certain employees who take longer breaks. It could be that some departments have higher shrinkages than others. Now that you understand shrinkage, ensure your representatives adhere to stipulated schedules.

Moreover, you can utilize workforce management tools to automate your shrinkage monitoring processes. Ensure you measure shrinkage continuously instead of making it a monthly or weekly exercise.

Additionally, it’s vital for you to address absenteeism as much as you can. Control it by ensuring you enhance motivation and employee happiness. Keep your call center representatives competitive at all times.

Provide training, coaching, and effective onboarding processes. Go the extra mile and offer incentives to make them competitive. It’ll increase their engagements and drive.

Some of the rewards you can offer for accomplishments include badgers and recognition on leaderboards. Of course, physical gifts like bonuses or trophies work just as well.

Call Centre Shrinkage: Everything You Need to Understand

If call center shrinkage is not monitored, it will affect your overall call center productivity. It’ll have a significant impact on operational efficiency. It’s important for you to have a robust shrinkage strategy in place.

You’ll curb shrinkage hours and offer your customers optimum satisfaction. Motivate your call center representatives to curb personal breaks and minimize shrinkage as much as possible.

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