What is Shrinkage in a Call Center – How to Control It

What is Shrinkage in a Call Center – How to Control It

Are you finding it hard to understand the term call center’s Shrinkage? It is the unavailability of call center agents to handle calls for any reason ranging from holidays to late arrivals. It’s a common problem in call centers, especially when there’s an increased customer demand but fewer people available to handle them. Shrinkage can cause severe disruption to your business, so it’s essential to take preventative measures against this unfortunate occurrence. Still, trying to understand what Shrinkage in a call center is all about? Have doubts about calculating shrinkage hours and identifying internal and external factors of shrinkage. Fear not, as this exciting blog post covers all. So, ensure you read this intriguing write-up till the end to learn everything about shrinkage factors and ways to minimize shrinkage. 

Understanding What Shrinkage in a Call Center Means 

The term shrinkage refers to when call center agents are unavailable when they should be to take customers’ calls. Yes we are discussing the agents employed who are not available for work due to any reasons. It doesn’t sound like a big thing, but it is a severe concern to the management. Since it affects the quality of a call center operations and, more importantly, customer satisfaction. You can also term them internal shrinkage factors and external linkage. The most common reasons for call center shrinkage are:

  • The agents are on holidays and hence they can’t handle calls. 
  • Having sick time off
  • Absent from work due to any reason
  • Left the office early
  • Too bust in making personal calls 
  • Taking their schedule breaks
  • Attending team meetings and training programs
  • Being busy with after-call work

Shrinkage in call center occurs when agents cannot take calls, whether because of scheduled time off, breaks, or other unforeseen factors.

Shrinkage is the process of losing your agent or agents, who may be temporarily unavailable due to a variety of reasons. It’s essential to understand what causes Shrinkage so you can avoid it and increase the efficiency of your call center solutions.

Why Must Call Center Shrinkage be Controlled?

Call center shrinkage is a real problem. It’s not just a symptom of poor call center management but rather an indicator of the poor call center’s efficiency in general. It can be managed through proper training, good hiring practices, and excellent performance management systems.

Here’s how a call center can make efforts to prevent or reduce Shrinkage.

Preventing Shrinkage in a call center 

To prevent Shrinkage in a call center, you need to:

  • Make use of contact center software to schedule agents working. It will also ensure that customer calls are timely taken. Plus, you will know the exact call volume. It also means that call center schedule is also important. 
  • Ensure proper monitoring of agents.
  • Make the best use of the technology available, including automating operations using AI.
  • Make efforts to keep the agents’ morale high.

Are they too technical for you to understand? Let’s briefly elaborate on them all.

Automate agent scheduling using contact center software

You can use contact center software to schedule agents based on the data you have collected from the field. It includes call center metrics and customer feedback surveys as well. The software will then automatically assign these calls to specific time slots based on how busy the next day looks. Ensure you take good care of the call volume. Important of course for determining the call center efficiency. 

How to calculate a call center’s shrinkage percentage

Calculating Shrinkage or reducing shrinkage is a manageable job. You only need to specify a period you want to find the Shrinkage in a call center. Now you need to divide the total number of shrinkage hours by the total hours scheduled. Then multiply that number by 100 to get the shrinkage percentage (shrinkage rate) you need to know. Surely you can call this shrinkage formula! Now if someone asks you to calculate shrinkage, you will surely have no problems doing that. 

How much Shrinkage is tolerable

As you have learned now how to calculate shrinkage. You cannot eradicate the shrinkage completely. If figures look scary after applying the shrinkage formula, you should only look for reducing shrinkage or to reduce shrinkage. Simply because you have to obey the rules and regulations of the government regarding employee leaves. The legislation allows a certain number of days off to the employee, including gazetted holidays and leaves under abnormal conditions. Keeping these in mind, you must be able to tolerate some percentage (shrinkage rate) of it. Now the question is, how much Shrinkage is tolerable? Well, 30 to 35% is tolerable, but it also depends on each call center type or the call volume it handles. Indeed, if your call center allows more paid leaves, the shrinkage percentage will be higher. Reducing the average handling time is like managing Shrinkage. Enough on the percentage of Shrinkage. Let’s now get to understand why you should track Shrinkage or make good efforts for calculating shrinkage. All in all, a call center must ensure to reduce shrinkage or to control shrinkage by any means possible. 

Why must you track Shrinkage or why should you reduce shrinkage? 

Tracking call center shrinkage allows you to get an idea of staff scheduling. Like how many employees you need to handle a specific task in a particular period. This way, you will get a fair idea of how many people you need to deal with all the customer calls. Call volume ratio can also give you a good idea of the same. In a nutshell, you will know how agents are performing in each department. 

Most importantly, you will know the issues affecting the agents’ productivity and, thus, the overall efficiency of the call center’s performance.

Important to know about call center shrinkage 

Experts suggest you should not blindly trust the Shrinkage for the call center’s efficiency. The reason is that Shrinkage might need to give a fuller picture of a call center and the efficiency of its operations. Such short breaks might be a necessity to improve the agents’ productivity. Let’s understand this with the help of an example.

Suppose you own a mid-sized call center with hundreds of agents. Since you are still developing, you are looking to perform A-B testing to ascertain employees’ productivity. Yes, you know the call center shrinkage and would like eradicating it. But you are curious to know agents’ productivity with and without taking Shrinkage into account. First, you want to implement a strict policy for cutting the call center’s Shrinkage. For that, you have reduced the annual leaves from 15 to 10. Also, they have imposed strict restrictions on short breaks during office hours, allowing longer breaks one time. Plus, you have allowed no time for the agents to interact with each other except when the official meeting is called. You are closely monitoring how the agents are performing under these circumstances. Now that a month has passed, you have recorded every agent’s performance, their attitude to work, and the overall call center’s efficiency (Based on overall call volume percentage).

Now is the time to test this whole scenario the other way. At the start of another month, you have made things flexible for the employees. You have announced that the annual leaves have been increased to 18 from 10. Short breaks of 10 to 15 minutes are allowed during office hours as a brain refresher. Plus, employees are allowed to interact with each other for official purposes without holding an official meeting. You have implemented this for a month now and are ready to ascertain which one has worked the best and why. Using this data, you can also identify agents who are adding to the call center shrinkage. 

Scenario 1, where you were too strict on your employees, has made them work under immense pressure. Since they had no time for refreshments and interaction with colleagues, it has affected them negatively. The call center shrinkage was at a minimum during this period. But the workload (Ascertained on call volume basis) and mental pressure were too much for some agents to handle. That’s why a few of them has also resigned from their positions.

Scenario 2, where you were too generous to the employees. Short breaks and other paid leaves have positively affected their productivity (calculated on call volume basis). Short breaks have also given them some refreshing moments during hectic business hours. Hence their performance has improved, and so has the efficiency of the call center.

You can see that controlling Shrinkage is only sometimes important for a call center’s success. Sometimes you have to look for flexibility that will allow agents to have some free space and thus put the efforts into the call center wholeheartedly. Scenario 1 is also an excellent example of circumstances that result in employee burnout. And burnout will mean a good talent leaving the company.

Hence you must know how strict you should be in your strategy against Shrinkage. It also implies that you must be open to tolerating a degree of Shrinkage because it might play a significant role in the call center’s success. 

Keep Agent Morale High to Prevent Shrinkage in a call center

The high morale of the agents is one of the most important factors in running a call center smoothly. If you can keep your agents happy, then their productivity will improve. There are several things you can do to boost the morale or productivity of your agents, including:

  • Make sure to have some fun time: An easygoing attitude and a good sense of humor go a long way toward making people feel comfortable working in your department.
  • Provide them with something they can look forward to: Bonuses or other rewards that you can distribute based on their performance. For that, proper monitoring of performance is essential as well. You could set a KPI and then closely monitor how the agent performs.
  • Be clear about what you are expecting from the staff. This way, they won’t expect surprises when it comes to paychecks or reviews.

It would help if you did not forget that the agents run everything in a call center. They are your essential assets whom you should take care of. One way of keeping the agent interested in working for you is to work on keeping their morale high. Luckily, you have a plethora of ways available to achieve this. We have enough on agents’ satisfaction and morale; now let’s move to reduce call center shrinkage to a tolerable level.

Automate Customer Service with AI Technology

With the advent of technology and the introduction of artificial intelligence, an inbound and outbound contact center has the opportunity to reduce human errors and improve customer satisfaction. In short, AI is also a great way of reducing call center shrinkage. Other than that, using the software will also save a lot of time on administrative tasks such as creating schedules, setting up shifts, and more.

To keep the agent’s morale high, a call center must provide good working conditions, the latest tools, and technology. Moreover, you must appreciate his efforts for the company or make him feel valued with bonuses and perks.

Conclusion

Shrinkage in a call center is when an agent is temporarily unavailable to take calls for various reasons. Very important for call centers to understand what is causing Shrinkage as it dramatically affects the call center’s efficiency. Shrinkage may occur due to many reasons. Scheduled time off, sick days, and breaks are the most common ones to go with. As with any other problem, this one also has a few solutions; all focus on ensuring the availability of agents to take calls when needed. One way of preventing it is that call centers use contact center software while automating customer service processes with AI technology. Of course, the ways of calculating shrinkage and reducing shrinkage also vary with each call center industry. You will agree that we have learned a lot about planned and unplanned shrinkage with the help of a real time scenario. Plus, we have also realized that managing agents and ensuring their professional development via training sessions are extremely important. This will also keep the agents competitive.  All in all, shrinkage management can help in lifting the reduced customer satisfaction levels. No doubt forecast and schedule accuracy along with schedule adherence play a crucial role in improving call center efficiency. 

This blog post was about Shrinkage in call centers and the various ways of preventing or managing shrinkage. We have also discussed how to go with shrinkage calculation. Gave you a contact center shrinkage formula as well to determine the accurate figure and ascertain how much time agents spend on different tasks. Furthermore, if we have skipped including something here, feel free to comment or write to us at our official email address.

Frequently Asked Questions

How to avoid Shrinkage or manage Shrinkage in a call center? Why call center shrinkage management strategy is essential? Why is call center shrinkage alarming? How to monitor call center shrinkage?