Your Ultimate Guide to Call Center Shrinkage: Understanding, Measuring, and Minimizing its Negative Impact

Last updated on August 19, 2024

New call center managers have a lot on their plate. They are often expected to step up from the get-go and, if promoted from within, catch up with administrative tasks and terminology they never had to deal with as agents.

If you are one of those operational managers at the start of your career or are currently struggling with this problem, you can cross “understanding shrinkage” off your to-do list.

After reading this article, you’ll never again find yourself understaffed during peak hours with a mile-long wait list and a battered company image. Instead, you’ll accurately predict call volume fluctuations, create and follow actionable strategies to counteract negative shrinkage effects, set KPIs, optimize schedules, give additional training and support to agents that need them and strike the right workload-wellbeing balance.

Here is all you need to know about call center shrinkage – what it is, how it affects your work, how to measure and manage it and how to minimize its impact.

Call Center Shrinkage Definition

Simply put, shrinkage is the amount of time agents are on the clock, but not actively taking calls or interacting with customers. Shrinkage itself is not inherently “bad” or “good”; rather, it’s a natural and necessary aspect of call center operations. Understanding the reasons behind it is the first step to correctly managing it.

Types of Shrinkage

There are two types of shrinkage – planned and unplanned.

Planned Shrinkage

Planned (sometimes also called external) shrinkage includes scheduled breaks and varied non-operational tasks, like administrative duties, meetings, training or holidays.

Each of them is essential. Meal, restroom and wellness breaks give your agents time to relax and recharge between customer interactions. Without it, they will quickly burn out, their productivity and focus will drop and they will be less attentive during calls.

“Non-operational tasks” mean scheduled actions or duties that temporarily stop agents from interacting with customers. They could be:

One-On-One Coaching Sessions
Quality Assurance Reviews
Feedbacks
Collaborations
Briefings
Knowledge-Sharing Meetings
Skill-Enhancement Workshops
Cross-Training Sessions
Self-Development Time
Process Automation Duties
Data Entry and Documentation
Request Processing
Case Resolution
Backlog Management
Compliance and Regulatory Projects

Planned shrinkage also includes official holidays and vacation days.

Unplanned Shrinkage

Unplanned, or internal, shrinkage happens because of mainly two things – agents not keeping to their schedule (being late, leaving early or taking sick days) and system downtime that prevents them from handling calls.

Calculating Shrinkage in A Call Center

The most common ways to measure shrinkage are using formulas, calculators or workforce management tools.

Remember Shrinkage tends to vary across the day and the year, so you need to measure it regularly for a clear picture.

Call Center Shrinkage Formulas

There isn’t a one-size-fits-all rule to estimate the percentage of time agents are unavailable to handle calls. Different formulas provide different perspectives.

For example:

To calculate the percentage of time agents are signed off or unavailable during their signed-in time, use this formula:

To get a more granular analysis and identify specific areas for improvement, focus on the difference between planned and unplanned shrinkage:

In this formula,

The total number of half-days in the formula for unplanned shrinkage is divided by 2 to convert to a full-day equivalent.

System downtime is typically considered a distinct category of non-productive time and is often factored into overall shrinkage calculations separately.

If you want a more comprehensive view of shrinkage, consider that both scheduled and unscheduled factors contribute to non-productive time:

If you want to assess the overall efficiency of workforce management in your call center, use this formula:

Tip Choose a formula based on the specific types of shrinkage and connections between non-productive activities you want to measure and control.

Call Center Shrinkage Calculators

You can easily find free or paid online call center shrinkage calculators and tools. They streamline the measurement process and give you quick results. The tools vary in features and complexity but typically consider both planned and unplanned shrinkage.

As with formulas, there isn’t an across-the-board shrinkage calculator. Some of the types you can find are:

Shrinkage Percentage Calculator
Planned vs. Unplanned Shrinkage Calculator
Agent Availability Calculator
Real-Time Shrinkage Monitoring Tools
Historical Shrinkage Trend Analysis Tools

Here is a simple shrinkage calculator to figure out your overall workforce management efficiency using the last formula we discussed above:

Call Center Shrinkage Calculator

Total Logged-Out Time (in hours):

Total Logged-In Time (in hours):

Remember The reliability of the results largely depends on the accuracy of your data, so be careful for manual errors and incorrectly collected statistics.

Workforce Management Software

Comprehensive workforce management software often has built-in features that track and record various shrinkage components, including planned breaks, training sessions and unplanned downtime. These tools integrate with your scheduling systems and provide a centralized platform for staff optimization. Their greatest benefits are real-time agent monitoring and automated data collection that minimizes manual errors.

Tip Some call center software has shrinkage calculation features.

Clearly Defined Shrinkage Categories

When measuring shrinkage, set straightforward indications for planned and unplanned activities. Otherwise, you won’t collect precise enough information and correctly analyze or manage shrinkage.

To do it right, follow these steps:

1. List all non-production related actions your agents take (like breaks, training, meetings and unplanned activities) and systemize them based on their nature and purpose.
2. Distinguish between planned and unplanned shrinkage.
3. Create a way to categorize each type of shrinkage.
4. Assess the impact of each category on the overall call center operations and customer service.
5. Involve your managers, supervisors and agents in the categorization process to ensure they understand the system and its impact.
6. Regularly review and update categories to reflect changes in your operational needs or industry trends.

Shrinkage KPIs

Key Performance Indicators (KPIs) set specific goals and objectives and clearly describe what “non-productive time” means for your company. Well-defined and regularly measured KPIs help you find areas for optimization and implement targeted strategies.

Metrics to be on the look-out for:

Shrinkage Percentage
Adherence Rate
Planned vs. Unplanned Shrinkage Breakdown
Impact on Service Level
Shrinkage Trend Analysis
Agent Satisfaction with Scheduling
Training Impact on Productivity
Break Utilization Rate
Adherence to Peak Hour Schedules

As with everything else, there is no KPI master list. Choose the shrinkage parameters to track that reflect your call center goals.

Shrinkage Management

Good shrinkage management involves a combination of accurate forecasting, strategic planning, effective communication and a commitment to your agents’ welfare. It helps call centers maintain optimal service levels, adapt to changes and create a positive work environment for their staff.

Impact of Bad Shrinkage Management

Shrinkage mismanagement not only disrupts your operational efficiency and customer service but can also harm agent morale and result in financial losses.

Excessive idle time, frequent schedule disruptions and inadequate communication often leave agents exasperated, demotivated and less engaged with customers. If you don’t address and properly handle call center shrinkage, you risk burning your staff out or increasing agent turnover.

Inadequate shrinkage control can also have far-reaching financial consequences for your whole organization, like:

Higher Operational Costs
Increased Churn Rates
Significantly Increased Labor Costs
Recruitment Charges
Lost Sales Revenue Due to Abandoned Customer Transactions
Missed Revenue Streams During Peak Times
Higher Cost-Per-Interaction
Contractual Penalties
Overstaffing During Low-Call Volume Period
Reputation Management Costs

Shrinkage Management Best Practices

Tips for Using Workforce Management Software for Call Center Shrinkage Control

Apply the built-in features to accurately predict call volume patterns and make sure you have enough staff to handle the expected demand.
Automate scheduling to minimize manual errors and make sure planned shrinkage is taken into account.
Fully exploit real-time adherence monitoring features to identify and quickly address any issues.
Encourage agents to use the software’s self-service functionalities to promote transparency and reduce the administrative burden on yourself.
Monitor and analyze your KPIs using the workforce management tools to create a precise optimization strategy.
Use flexible scheduling models, like split shifts or varying start times, to benefit your agents and minimize the impact of unplanned shrinkage.
Integrate your workforce management software with other relevant systems, like CRM, communication platforms and timekeeping apps, to optimize the overall call center efficiency.

Best Practices for Real-Time Adherence Monitoring

Real-time adherence monitoring is about keeping a close eye on whether your agents are sticking to their schedules and tasks. It helps you catch any problems and proactively deal with them.

One of the first things to do is to clearly state your adherence expectations. After everyone has gotten on the same page, you can set automated alarms or let staff use self-service tools and workforce management software to monitor their real-time attendance.

Making dynamic schedule adjustments has at least three benefits:

it will make it easier to meet service level targets during peak hours,
it cuts into idle time and
it reduces agent stress levels.

Regular training sessions or gamification can also help motivate employees and improve their time management.

Utilizing Agent Involvement and Feedback

Including your staff in shrinkage management decisions helps foster team spirit, increase transparency and make sure your solutions positively impact the day-to-day work instead of disrupting it.

Here are some strategies for getting an honest and productive feedback from your agents:

1. Clearly explain the goals of managing shrinkage and the role agents play in the process.
2. Involve your staff in setting realistic shrinkage targets.
3. Provide ongoing training on shrinkage policies and best practices.
4. Actively and regularly seek agent input on the challenges they face in adhering to schedules.
5. Offer flexible scheduling options that consider your staff's needs.
6. Give agents self-serving tools and real-time visibility into their schedules, adherence metrics and overall performance.

Minimizing Shrinkage Impact

So far, you’ve learned what shrinkage is, how it affects your work, how to monitor it and what it means to properly manage it. But to truly optimize your call center operations and counter the negative shrinkage impact, you have to do more than address each element separately. You need to interconnect all your efforts.

Imagine tackling planned and unplanned shrinkage but neglecting the role of employee well-being. Or implementing new software without integrating it into your framework. Sure, it will still work, but you’ll miss out on a lot of added value.

Using a fragmented approach will get you poor results because it fails to recognize the synergies and dependencies between different aspects of shrinkage management. Focusing on individual metrics and implementing isolated strategies may cause you to overlook chances for broader optimization.

Instead, combine strategic scheduling, workplace management technology and performance analysis with employee engagement activities. This will ensure you not only control shrinkage but also have positive work conditions and optimal customer service. Prioritizing positive agent experience, proactive communication and cross-training will increase your staff’s skills, morale and time management and enhance your other shrinkage management efforts.

Conclusion

So, you’ve made it this far. You started this post as a shrinkage newbie and now can create management strategies, set KPIs and analyze data to predict call volumes. You know how to spot, categorize and reduce idle time. You recognize the need to lower agent stress levels, provide timely communication and ask for their input when making optimization decisions.

Maybe most importantly, you understand that in shrinkage management, like in life, things rarely work out in isolation. Focusing on only one aspect of the problem won’t make a significant difference. You need to use strategic scheduling, leverage technology and prioritize employee well-being at the same time to make your call center more resilient and adaptable to changes.

FAQ

What is call center shrinkage?

Call center shrinkage refers to the time agents are logged in but unavailable to handle customer interactions.

What types of shrinkage are there?

There are two types – planned (breaks, holidays, meetings, training and administrative tasks) and unplanned (due to agent adherence or system downtime).

Why does call center shrinkage matter?

Call center shrinkage is crucial because it directly impacts workforce efficiency, customer service levels and overall operational performance.

Is shrinkage always negative?

Shrinkage is not an inherently negative but a natural and necessary aspect of call center operation. It becomes a concern only when managed ineffectively or not at all.

Can shrinking be managed effectively?

Yes, with strategic planning, comprehensive policies, and workforce management tools.

What is poor shrinkage management?

It includes inconsistencies in scheduling, inadequate training and a lack of strategies to minimize and control non-productive time.

What are the consequences of poor shrinkage management?

It can lead to understaffing during peak call volumes, increased wait times, lowered service levels, compromised agent performance, and failure to reach performance targets. Additionally, it may result in heightened stress among agents and plummeted overall customer satisfaction.

What are effective methods for monitoring and analyzing shrinkage?

Effective methods include using workforce management software, analyzing historical data and implementing real-time monitoring to track adherence and identify trends.

What are key performance indicators (KPIs) related to call center shrinkage?

KPIs for call center shrinkage vary from organization to organization but usually include metrics like adherence rate, absenteeism rate, and schedule adherence.

How do you minimize call center shrinkage's negative impact?

With interconnected strategies for planned breaks, agent cross-training and flexible work shifts, with predictive analytics, prioritized employee feedback when scheduling, real-time monitoring and automation technology.