Does It Make Sense to Measure the Call Center Shrinkage Rate?

When you think of metrics in a call center environment, you typically come across the following:

• First Contact Resolution (FCR)
• Average Handling Time (AHT)
• Call abandonment rate
• Customer satisfaction score (CSAT)
• Net promoter score (NPS),
• Average wait time (AWT)
• Service level (SL)
• Agent turnover rate
• Customer effort score (CES)
• Customer health score (CHS)
• Customer retention rate
• Occupancy rate.

Most call centers also talk about call shrinkage, which is the opposite of occupancy rate. To understand what call shrinkage is, let us first understand occupancy rate.

What Is Occupancy Rate?

It’s like a measure of how busy our agents are compared to how much time they have to work.

If an agent spends 80% of their workday helping customers, their Occupancy Rate would be 80%.

Now, why does this matter?

Well, think about it – if our agents are super busy, it could mean they’re feeling a bit overwhelmed. But if they’re not busy enough, we might not use our resources as efficiently as possible.

So, the goal here is to find that sweet spot where our agents are busy enough to keep things ticking along nicely but not so busy that they’re burning out.

It’s all about ensuring we’re using our team’s time wisely, keeping them happy and productive, and still ensuring our customers get the help they need.

Now, let us define call shrinkage.

What Is Call Shrinkage?

Call center shrinkage refers to the percentage of time your customer support agents are on the clock but unavailable to take calls.

It measures the time agents are unavailable to handle calls due to factors like breaks, training, meetings, and other non-productive activities.

This is the opposite of occupancy rate, which is the percentage of time your agents are on active calls with customers.

How Do You Measure Call Center Shrinkage?

It is important to measure call center shrinkage to ensure workforce planning and ensuring optimal agent availability.

Here is the formula to measure shrinkage.

Shrinkage (%) = (Non-productive time / Total paid time) * 100

• Non-productive time includes breaks, training, meetings, leaves, absenteeism, system downtime, etc.
• Total paid time is the total time agents are paid for, including both productive and non-productive time.

Let me give you an example with a scenario.

A call center has 50 agents working 8 hours a day.

So, the total paid time is 50 agents x 8 hours = 400 hours/day.

Let us look at the non-productive time:

• Breaks: 50 x 0.5 hours = 25 hours
• Training: 50 x 0.25 hours = 12.5 hours
• Absenteeism: 5 x 8 = 40 hours
• Others (meeting, downtime) = 15 hours

Total non-productive time = 25 + 12.5 + 40 + 15 = 92.5 hours/day

Now, the shrinkage percentage is:

Shrinkage (%) = (92.5/400) * 100 = 23%

How Do You Use This Shrinkage Data?

You can use shrinkage to measure the number of additional agents needed to meet service-level goals.

If shrinkage is 23 %, and you need 50 agents available, you should staff approximately:

50/(1-0.23) = 65 (approximately)

You can also look at identifying factors that cause shrinkage and optimize schedules.

What Is the Ideal Shrinkage Rate for a Call Center?

The most important thing to remember while measuring shrinkage rate is that it does not have a correlated relationship with agent or team productivity.

Almost all agents will have other activities to perform apart from taking calls – follow-ups, post-call note-taking, updating CRM and database, and contributing to the knowledge base.

Besides, they also need regular breaks like lunch, refreshments, and bio-breaks.

The industry average shrinkage rate is considered to be anywhere between 30 and 35 percent.

If your call center sits anywhere below 30 percent, you’re probably in good shape, but 20 percent is ideal.

What if your shrinkage rate is below 10 percent?

That’s not an ideal situation either because it means your agents are handling so many calls that they cannot take breaks at all. 

Maintaining a shrinkage rate that is below 10 percent for a prolonged duration can often lead to burnout and a host of additional problems related to poor performance and high turnover rates.

When you flip this, you also don’t want your shrinkage rate to be 40 percent or greater.

What does this mean?

This means your customers are receiving less attention, resulting in longer wait times and lower caller satisfaction.

It could even mean that your call center isn’t receiving or making enough calls to keep your agents busy in the first place.

You should always aim for a shrinkage rate between 20 and 30% to be a successful call center operation.

Ten Strategies to Ensure Your Call Center Shrinkage Stays Between 20 and 30%

1. Scheduling and Forecasting

If your call volumes peak on Mondays between 9 am and 11 am, schedule more agents during this time.

You can use past data to predict this and prevent under- or overstaffing. You can implement a workforce management solution to help you align schedules with demand, minimizing idle time or excessive workload.

2. Manage Breaks Proactively

Instead of letting agents decide when to take breaks, implement strategic breaks.

If you have ten agents, schedule 2 agents for a 15-minute break every half hour. You will have most of your team available while ensuring everyone gets their necessary breaks.

3. Schedule Training During Low-Activity Periods

You know that the call volume drops between 2 pm and 4 pm. Use this time for training, which will ensure learning for your agents while your customer needs are handled effectively.

4. Real-Time Monitoring and Alerts

If an agent extends their lunch break by 20 minutes repeatedly, your system can send an alert to the supervisor.

A quick check-in can remind the agent to stay on schedule while keeping shrinkage in control.

5. Address Absenteeism

If an agent calls in sick frequently on Mondays, have a conversation to understand their challenges.

Offer flexible work-from-home options on certain days to improve attendance without increasing shrinkage.

6. Ensure an Engaging Work Environment

Happy employees are less likely to take unscheduled breaks or call in sick.

Organize monthly team-building activities, reward top performers with incentives like gift cards, or celebrate small wins.

This will keep your team engaged and valued, which will motivate them to stick to the schedules.

7. Use Technology to Reduce Downtime

Invest in reliable hardware and cloud-based contact center software. If your current tool experiences significant downtime, switching to a platform that promises 99.99% uptime can significantly reduce lost time.

8. Offer Time-Off Planning

Encourage agents to submit off-time requests in advance. This will allow you to plan for absences instead of reacting to them.

Planning for absences will ensure that absenteeism doesn’t disrupt operations or increase shrinkage beyond acceptable limits.

9. Conduct Shrinkage Audits

Identify the biggest shrinkage contributors and take corrective actions.

If meetings are consuming too much time, shorten them to 15 minutes with focused agents. Even better, avoid all unplanned meetings. Likewise, you can look at data related to breaks, training, and the like.

10. Set Expectations and Communicate Frequently

Explain to all your agents how adhering to schedules directly impacts customer service levels. Share metrics regularly, like showing how a 5% reduction in shrinkage improves customer service levels.

This is more likely to make your agents adhere to schedules.

The goal of any call center should be to maintain the shrinkage level between 20 and 30 %.

Leveraging accurate scheduling & forecasting, conducting regular audits, real-time monitoring, keeping your agents engaged, setting expectations, and using the right technology and solutions like workforce management can help you achieve minimal shrinkage while addressing the needs of the customers and the well-being of your agents.

Remember, happy agents lead to less shrinkage and happy customers, making it a win-win for everyone.