Understanding Call Center Shrinkage and How to Fix it

Blog Post created by robertstanley Employee on Jan 5, 2018

Employees are arguably the biggest asset of any business. Without the right team in place, businesses can’t properly serve their customers. For call centers, employees are also the biggest expense making how they spend their work time increasingly important to managers. While you can hope that they are actively working every minute of the day, the truth is they probably are not.


What is Call Center Shrinkage?

Call center shrinkage is the number of hours an employee is paid but not productively working. Breaks, lunch, meetings, and absenteeism keep agents from their number one responsibility, answering calls. While some of these workday interruptions can be planned for like vacations, others like sick days cannot. Every second an agent spends not answering phone calls directly impacts your bottom line, customer experience, and call center metrics like speed of answer and customer satisfaction.


How do you Calculate Shrinkage?

There are two types of shrinkage, internal and external. Internal shrinkage is lost time caused by internal operational choices like mandatory trainings, meetings, and system downtime. External shrinkage includes factors out the business’s control like vacations, sick days, and paid holidays. Shrinkage is used by call center managers to properly staff agents.


To calculate shrinkage, you need the following data for the year:

  • Total hours of shrinkage
  • Total hours of available work time


When you have these numbers, you can plug them into the below equation:

  1. Shrinkage percentage= (Total hours of shrinkage/ Total hours of available work time) x 100
  2. This will give your shrinkage percentage to use in the below formula when calculating number of agents to schedule:
  3. Number of employees needed/(1-shrinkage percentage)
  4. For example, if you need 100 agents and your shrinkage percentage is 25 percent.
  5. 100/(1-.25)= 133.33
  6. You would need to staff 133 employees to have full coverage of phone calls.


How can you Eliminate Shrinkage?

Shrinkage can be deadly to a call center. If there are not enough agents to answer calls, customers get frustrated and hang up before being addressed. This can cost you money and cause a bad reputation if it’s ongoing. As a call center manager, you need to take a proactive approach in reducing shrinkage. Here are six tips that can help eliminate shrinkage:


1. Track Schedules.

One way to calculate the amount of internal shrinkage is to require agents to clock in and out while working. The best way to track this is by using a cloud-based application where employees login on their computers. Using a computer based application works best because employees are guaranteed to be at their work station.


These apps allow employees to mark when they take breaks, attend meetings, or participate in trainings. Managers can run reports weekly or monthly to see the amount of time employees spend away from the phone involved in alternate activities.


2. Break it into Categories.

Tracking employee’s daily activity should be detailed to gain better insight. Within your time tracking app, you can create categories for different types of interruptions. This way you can identify if employees are being pulled away for too many meetings/trainings, or if they are abusing lunch or break privileges.


3. Discuss Chronic Absenteeism.

A team is only as strong as their weakest link. Constant sick days and requested time off by one employee can cause problems within the entire team. Identifying employees that take numerous days off is just the start of a solution.


Managers should also hold a meeting with these employees and discuss how it impacts the team and business. The underlying cause for call-offs may be a short-term problem. If it isn’t, it is vital that you make a plan with the individual to change it moving forward and hold them accountable.


4. Use Analytics Software.

When call center agents spend large amounts of time being pulled from their desks to research or track down information it impacts your efficiency and increases shrinkage rates. You can minimize this with the right customer interaction analytics software because it acts as a central hub for client information, knowledge, resources, and real-time data. This eliminates the need for employees to leave their desks for answers. Analytics software can also help you track less obvious sources of shrinkage – like systems that are not optimized or the causes of high average handle times and long periods of silence on calls.


5. Engage Employees.

Keeping employees engaged and excited about their job is especially hard in call centers because of the high stress levels. But, when employees enjoy going to work, feel empowered, and valued, they are less likely to call off unexpectedly.


6. Promote Health and Wellness.

According to the World Health Organization, an employee’s health is directly impacted by their workplace. More and more workplaces are promoting and creating a culture based on healthy life choices. When employees embrace these choices, they take fewer sick days and are more focused at work.

Properly managing shrinkage increases productivity, employee happiness while creating a better customer experience and improving your bottom line.