Everything You Need To Know About Call Center Shrinkage

The main mantra of running a call center efficiently is to handle the call volumes cautiously. A high call volume means the call center encounters more calls than it handles.

The call center needs to schedule the correct number of agents to meet the demand of call volumes. Otherwise, call center shrinkage occurs. This unavailability is called call shrinkage when agents cannot attend to calls.

In this article, we will dig deep into what is call center shrinkage, how it happens, how to calculate it, and how to reduce it. So, without any further ado, let’s get started.

What is Call Center Shrinkage?

Call center shrinkage means the number of active agents that are attending the customer calls divided by the number of agents who are unavailable at that time. 

Or the actual numbering of agents available to receive calls vs. the agents on break. Call center agents get paid to perform customer duties and spend a certain amount of time doing that task. Also, in between, they take breaks or, let’s say, unproductive hours.

The difference between agents’ overall time and actual work time (handling customer calls) is called shrinkage. Call center teams can have actual graphs of agents’ active working hours.

What Factors Contribute to Call Center Shrinkage?

You might’ve grasped the concept of call center shrinkage; now, let’s understand the factors contributing to it. Various factors lead to call center shrinkage, mainly divided into two types: internal and external.

Internal Shrinkage Factors

Internal shrinkage factors occur inside the call centers. 

• Casual Breaks: These include short breaks and long breaks like morning beverage breaks, lunch breaks, etc. However, these breaks are needed to optimize the agent’s productivity.
• Meetings and Development Programs: Task-related meetings with managers, group meetings, and development programs kill agent’s active time.
• Helping Teammates: Helping other teammates in tasks or projects drags agents away from picking up customer calls.
• Wrong Call Center Scheduling: Inaccurate or poor scheduling increases customer wait times and enhances agents’ workloads.
• Decline in Employee Engagement: Employee engagement lowers because of job dissatisfaction, frustration, heavy workload, and burnout. This way, agents want to give less than 100% of the work, take fewer leaves, and decrease productivity.

External Shrinkage Factors

External shrinkage factors occur outside the call centers. 

• Holidays: When the agents take their time off for holidays, there is a high chance that the call center needs more resources. You must ensure the correct number of agents are always available to handle customer calls.
• Sick Leaves: Sick leaves by agents cause shrinkage if proper scheduling is not in place.
• Absenteeism: Frequent absence of employees without any specific reason leads to shrinkage. It results in an increased workload for the remaining staff and longer customer wait times.
• Emergency and Personal Obstacles: While these can’t be avoided, situations like such contribute to shrinkage. 
• Tardiness: Some employees arrive late at the work premises, which cuts off the agents’ precious work hours, contributing to the call center shrinkage.

How to Calculate Call Center Shrinkage?

Call center shrinkage is calculated by collecting the agent’s efficiency data. To calculate the shrinkage of 1 day, you need to count the total hours an agent is allocated to work in a day.

Then, you must sum up the total time lost due to breaks, meetings, and other non-productive stuff. After that, you can put up the formula, i.e., 

Shrinkage Percentage = (Total Shrinkage Time / Total Working Hours) * 100 

The shrinkage percentage determines the unavailable agent time for picking up calls. The longer the time, the more worrying signs for a call center. It indicates lower productivity and hurts customer service.

Let’s take an example to understand the scenario even better: A call center has 15 agents allocated for 8 hours each, which means 120 hours allocated hours. They remained unavailable for 10 hours in total due to shrinkage, then the shrinkage time would be:

Shrinkage Percentage = (10 / 120) x 100 = 8.33%

To sum up, 8.33% of the allocated time agents are unavailable to receive customer calls in that call center.

Why Should You Track Shrinkage?

Call center shrinkage is vital so the call center runs smoothly through all the rugged paths. Managers must deploy the correct number of agents to handle inbound calls so that the call center remains efficient.

• Eliminates Understaffing: Call center managers can establish a timetable chart for assigning shifts to agents after understanding their availability better. They can predict call volumes more accurately and schedule agents so they remain available to answer phone calls during peak times.
• Improved Agent Availability: A detailed study of shrinkage allows managers to improvise call center schedules effectively. Optimization of internal and external shrinkage makes sure agents are available at most times and reduces idle time.
• Reduced Customer Wait Times: Keeping track of shrinkage data allows a better staff schedule, eventually minimizing the customer wait times to some extent. 
• Better Identification of Underlying Issues: Tracking shrinkage data gives an in-depth idea of agents’ concerns and availability. Identifying and addressing these issues is crucial for the smooth functioning of call centers.
• Improved Agent Productivity: Identifying and rectifying shrinkage also provides more time for agents to receive calls. Hence, it enhances the agent’s productivity and overall customer experience. 

How to Reduce Your Call Center Shrinkage in Your BPO?

You must implement a few rules or strategies to reduce call center shrinkage in your BPO. These are tracking shrinkage data, reducing unexpected absences, and fostering a positive work environment.

1. Track Shrinkage Data

You need to track and analyze shrinkage data regularly. Getting deep into it and breaking down the issues causing the shrinkage will help you know areas for improvement.

Reducing shrinkage factors like breaks, meetings, and delays will help optimize call center efficiency.

2. Reschedule Meetings and Training

You must ensure you schedule meetings and training periods in less busy hours. This way, the correct number of agents will always be available at the right time to handle high call volumes.

Thus, it reduces customer wait times, and agents won’t face heavy workloads.

3. Reduce Unintentional Absences

Every call center should have a specific attendance chart and policies. This way, agents will be strictly observed and adhere to the call center’s policies. 

You can even consult them personally and provide them with tips and tricks to tackle personal challenges that may have led to unnoticed absences or even offer wellness programs.

4. Use Scheduling Software

The key to solving call centers’ tedious day-to-day operations is scheduling software.

You can use call scheduling software to assign a proper schedule to agents, including breaks, shifts, and days off. The primary purpose is to ensure enough workforce to handle during busy call hours.

You can even provide them with flexible scheduling options so that their engagement rate increases and they achieve a work-life balance.

5. Cultivate a Positive Work Environment

Building a culture where everyone can communicate openly and have their ideas heard and appreciated is critical to an organization’s success.

You should run team-building activities and programs to foster a positive and healthy working environment.

6. Provide Flexible Working Options

A proper work-life balance can be maintained by providing flexible scheduling options and remote working opportunities. This reduces feelings of a heavy workload, stress, and low morale. 

Also, it plays a critical role in minimizing absenteeism and tardiness. 

7. Offer Incentives and Benefits

You need to encourage employee retention by offering high salaries, festival bonuses, and incentives. To retain highly engaged and talented individuals, you must recognize and reward their efforts as best as possible.

It boosts their morale, motivates them to push even harder, and reduces turnover.

Conclusion

Call center shrinkage keeps agents away from their desks and, most importantly, from interacting with customers on calls. Call centers hire agents to handle customer calls, but they can’t be on phone calls at any time. This unproductive time away from actual work is shrinkage.

Call center shrinkage happens because of scheduled breaks, unscheduled absences, bad scheduling of agents, etc. Shrinkage prevents the call center from running like free-flowing water, as the workforce is insufficient to pick up calls. 

Shrinkage can be minimized by keeping track of shrinkage data, utilizing scheduling software, cultivating a positive work environment, and offering extra benefits to employees. As a result, the correct number of agents with the required expertise is always present in those peak call times.

FAQs

What is the formula for shrinkage in BPO?

The formula for shrinkage in BPO is as follows:

Shrinkage Percentage = (Total Shrinkage Time / Total Working Hours) * 100

What is acceptable shrinkage in a call center?

The acceptable percentage of shrinkage in a call center usually ranges from 30 to 35%. It means that, on average, 30-35% of scheduled agents miss attending customer calls due to unavailability. 

What are SLA and KPI in BPO?

Both the terms SLA (Service Level Agreements) and KPI (Key Performance Indicators) are crucial for BPO (Business Process Outsourcing). Service Level Agreements are essential for establishing transparency and accountability. Key Performance Indicators give insights into areas that need improvement and provide feedback.

What is the call arrival rate in BPO?

There is no ‘fixed’ call arrival rate in BPO. Every single BPO has its benchmarks and manages its resources accordingly. Keeping an eye on call arrival rate and other performance metrics like call handle time and abandonment rate gives a clear insight into the call center position in the market.