What is Call Center Shrinkage and How to Reduce it?  

Imagine you are a baker working in a busy bakery. Every day, you have to prepare hundreds of cakes for consumers. However, you take breaks throughout the day to sip water, eat a snack, or use the restroom. These breaks are beneficial to your health and will keep you feeling refreshed and energized throughout the day.  

However, for the bakery, it is the time when you are not actively baking cakes, and the business is not earning revenue. This is analogous to call center shrinkage, where customer service agents take breaks or participate in training and other non-call-related activities, reducing the amount of time they have available to handle calls and potentially affecting the call center’s efficiency and productivity. 

In this post, we will talk about what causes call center shrinkage, how to calculate it, and how to reduce it for better productivity. 

What is Call Center Shrinkage? 

Call center shrinkage refers to the time when call center agents are not available to handle incoming or outgoing calls. This can include time spent on breaks, training, meetings, or other tasks that take agents away from handling calls.  

The metric is commonly used to measure the efficiency and productivity of a call center, as it represents the amount of time agents are not productive and are not contributing revenue to the business. High shrinkage rates can lead to longer wait times, increased abandonment rates, and reduced customer satisfaction rate.

What Causes Call Center Shrinkage?  

Call centers experience shrinkage in their workforce for various reasons, which can be classified into two broad categories – planned and unplanned shrinkage.  

Unplanned shrinkage is when agents are scheduled to work but not on calls because of unanticipated circumstances like illness, personal problems, power outages, and weather disruptions. Planned shrinkage is the hours when agents are not on calls, such as breaks, lunchtime, training sessions, coaching sessions, and team meetings.  

Let’s look at the causes of planned and unplanned call center shrinkage: 

Planned Shrinkage  

1. Team Meetings 

Call center teams hold regular meetings to discuss concerns, share best practices, and find solutions to recurring problems. These meetings might last up to a few hours per day and can result in intentional downsizing.  

2. Scheduled Breaks 

In call centers, agents are typically given a certain amount of time for breaks throughout their shift. These breaks can include time for lunch, personal time, or time for rest. 

3. Training 

Call center agents must be constantly upskilled and trained to keep up with the newest industry trends and best practices. Call centers typically arrange training sessions for agents, which might result in deliberate shrinkage. 

Unplanned Shrinkage 

1. Absenteeism 

Absenteeism happens when agents fail to show up for work, either due to illness or another personal or professional emergency. This can lead to unplanned shrinkage and raise the workload on the remaining agents, resulting in a backlog of calls that must be answered.  

2. Personal Disruptions 

Employees may leave the workplace unexpectedly due to personal reasons such as car breakdowns, family emergencies, or other personal issues. 

3. Technical issues 

Unplanned shrinkage can occur owing to a variety of technical faults, including power outages and hardware and software failures. 

4. Unexpected Rush 

Call centers can sometimes experience a higher volume of calls than usual, which can lead to an unexpected backlog in calls that must be handled. This can increase wait times for customers, leading to a negative experience. 

What is an Acceptable Call Center Shrinkage Percentage?  

The average industry shrinkage rate is 30-35%. However, this can vary depending on the industry to industry, call center size, and specific workflows.   

The key is to find a balance between minimizing shrinkage to maximize productivity and ensuring agents have adequate rest and training to deliver exceptional customer service. Therefore, the call center’s productivity increases with decreasing shrinkage. 

How to Calculate Call Center Shrinkage? 

The formula for call center shrinkage is calculated based on:  

• Agents  
• Hours/time 

In terms of agents, the formula to calculate call center shrinkage is: 

(Number of agents needed to take calls/number of agents available to take calls) * 100 

Example: Assume that to fulfill the service level target, you will require about 100 agents to manage the call volume over the course of a half-hour. Therefore, the shrink percentage would be 142.8% (100/70) if 30 agents were not active at any moment during this thirty-minute period. 

In terms of hours, the formula to calculate call center shrinkage is: 

{Total hours (external + internal shrinkage)/ total hours available} *100 

How to Reduce Call Centre Shrinkage?  

To ensure optimal performance and sustain efficiency, shrinkage in call centres must be reduced. The following strategies can help in reducing shrinkage in your call centre:  

1. Implement a flexible work schedule that includes staggered breaks, job sharing, or part-time options, which help reduce burnout and unplanned absenteeism.  

2. Provide comprehensive training to agents to help them improve their skills and reduce the quantity of after-call work and call escalations, reducing shrinkage.  

3. By monitoring and tracking shrinkage, it’s easier to identify problems that cause a lot of shrinkage and develop strategies for reducing shrinkage.  

4. Consider allowing remote work options that can cut the time it takes to get to work and decrease the chances of delay and burnout.  

5. Investing in a robust knowledge management system to provide a comprehensive knowledge base with all the data required by the agents.  

6. Invest in cutting-edge call center software and technologies, such as chatbots and interactive voice response (IVR) systems, to address frequently asked questions without needing agent participation.  

7. Use automation tools to handle routine and repetitive tasks, allowing agents to focus on more complex and value-added activities.  

8. Implement performance-based incentives to motivate agents to maximize their productive time.  

9. Maintain a call centre scripting software to maintain a seamless interaction between different agents and customers, 

10. Utilize workforce management technologies to anticipate call traffic and plan agents appropriately and correctly. This can help avoid overstaffing or understaffing.  

Summing it up  

Call center shrinkage has a substantial impact on a company’s bottom line. However, it might seem like little; even a little shrinking can build up over time. Identifying and addressing the root causes of shrinkage, such as agent absence or low call traffic, is crucial to reducing shrinkage in contact centers.

While some shrinkage is unavoidable, organizations can maximize their resources and improve the customer experience by proactively reducing its impact.  Achieving long-term outcomes requires a well-balanced strategy that considers operational effectiveness and personnel well-being.  

Call center shrinkage is a multifaceted challenge that demands a holistic and proactive approach. As organizations navigate the dynamic landscape of customer service, addressing and mitigating shrinkage will undoubtedly contribute to improved operational performance, heightened customer satisfaction, and the overall success of the call center.