Achieve operational excellence by minimizing call center shrinkage

At the heart of any successful enterprise is communication. So it's no wonder call centers exist—to provide a direct connection between businesses and their customers. But, as more and more people flock toward digital channels for support, it can be difficult to remain agile. This is especially true when you’re keen on addressing customer needs while also managing the operating costs of running a full-service center.

One way enterprises do try to tackle this situation is to keep up with fluctuations in demand: when calls spike suddenly or flatline unexpectedly (known as call center shrinkage). Properly planned staff allocation ensures customers get exactly what they need from your service without breaking the bank. So how can you approach this cost versus quality balance while maintaining an efficient operation? Read on for insights into best practices that will help you successfully manage call center shrinkage!

What is call center shrinkage?

Call center shrinkage is a crucial metric in workforce management (WFM) that measures the amount of unproductive time spent by call center agents. This generally covers instances when they’re unavailable to handle customer calls.

Call center shrinkage formula

This metric is calculated by dividing the total unproductive amount of time by the total available time (total hours) and then expressing it as a percentage.

The formula for call center shrinkage is as follows:

Call Center Shrinkage Rate = (Total Unproductive Time / Total Available Time) * 100

Types of shrinkage in a call center

Understanding the types of shrinkage and the factors influencing them is essential for optimizing call center operations. The following are two major types of shrinkage in call centers:

Internal shrinkage

Internal shrinkage refers to the unproductive time caused by activities directly related to call center operations. Those actions, while impacting productivity, are essential for maintaining agent productivity, skill development, and effective management. Understanding and managing internal shrinkage is crucial for optimizing call center performance.

Examples of internal call center shrinkage:

  • Team meetings: Regularly scheduled group conversations between call center managers and team members can impact worker productivity, contributing to call shrinkage
  • Training sessions: Structured programs aimed at enhancing agents' skills, product knowledge, customer service techniques, or new technology adoption contribute to agents' professional development, but also temporarily reduce their availability for handling incoming calls
  • One-on-one meetings: Sessions between supervisors and individual agents for coaching, performance evaluation, feedback, and addressing specific concerns can sometimes drag on and could get in the way of efficient call center operations at the time
  • Other internal factors: These may include lunch breaks, after call work, scheduled breaks, etc.

External shrinkage

External shrinkage refers to unproductive time caused by factors beyond the control of the call center's management or its agents. These are often unexpected and can impact agent availability and call center efficiency. Managing external shrinkage requires proactive measures and contingency plans to mitigate the impact on customer service.

Examples of external call center shrinkage:

  • System downtime: Technical issues, software updates, maintenance, or server failures temporarily disrupt call center systems and prevent agents from handling customer calls
  • Unexpected interruptions: Unforeseen events, such as power outages, natural disasters, or network failures, can temporarily halt call center operations and hinder agent availability
  • Other external factors: These may include holidays, sick time, absenteeism, leaving early, or coming in late

Management practices affecting call center shrinkage

Several additional factors and management practices that contribute to call center shrinkage include:

  • Scheduling and staffing: Inadequate forecasting and staffing can lead to understaffed shifts or inefficient schedules, resulting in higher shrinkage rates
  • Agent motivation and engagement: Low morale, lack of motivation, and disengagement can lead to longer breaks, personal calls, or other unproductive activities
  • Service level targets: Balancing service level targets with post-call tasks and quality assurance processes may require additional agent time, contributing to a high shrinkage rate

Businesses can reduce call center shrinkage by addressing these factors, implementing efficient scheduling practices, fostering agent motivation, and leveraging call center software and workforce management tools. This optimization enhances agent productivity, reduces costs, and improves overall customer experience and satisfaction.

Strategies for managing call center shrinkage

Effectively managing call center shrinkage is essential for optimizing productivity, meeting service level agreements (SLAs), and enhancing overall customer satisfaction. Call centers can minimize shrinkage and maximize operational efficiency by implementing targeted strategies and leveraging workforce management (WFM) practices.

Use effective workforce management and scheduling techniques

  • Accurate forecasting: Utilize historical data and call patterns to forecast call volumes and staffing requirements. Doing this helps align agent availability with expected call demand.
  • Optimized scheduling: To minimize shrinkage, create schedules that take agent availability, skill sets, and call patterns into consideration. Use advanced scheduling software to automate the process and ensure optimal staffing levels.

Address employee motivation and engagement

  • Recognition and rewards: Implement incentive programs to recognize and reward high-performing agents, for example, with custom company shirts. This boosts motivation, reduces unproductive time, and increases engagement.
  • Growth and development opportunities: Provide agents with continuous learning, skill development, and career advancement opportunities. Engaged agents are more likely to demonstrate schedule adherence and reduced shrinkage.

Implement technology solutions

  • Interactive Voice Response (IVR): Use optimized IVR systems to automate routine customer inquiries and reduce agent idle time. This allows agents to focus on more complex issues, minimizing shrinkage.
  • Contact center software: Leverage contact center software with real-time monitoring capabilities to track agent performance, identify areas of improvement, and make proactive adjustments to optimize operations.

Add performance metrics and tracking systems

  • Shrinkage calculation: Establish a consistent method for identifying and measuring areas contributing to shrinkage, and regularly analyze the data to identify trends and opportunities for improvement. Monitor shrinkage as a percentage of total available time.
  • Key Performance Indicators (KPIs): Set KPIs related to schedule adherence, average handle time, and agent performance. Regularly measure and track these metrics to identify and address shrinkage-related issues.

Conduct regular training and coaching sessions

  • Schedule adherence training: Train agents on the importance of schedule adherence and provide practical tips to help them meet their scheduled commitments.
  • Effective time management: Equip agents with techniques for efficiently handling post-call tasks and minimizing non-productive activities like personal calls during the assigned number of work hours.

Reduce call center shrinkage with 8x8

Ready to optimize your call center operations and manage high shrinkage? Discover how 8x8's cutting-edge contact center solutions can help your enterprise achieve peak performance. Take the first step towards enhanced efficiency and exceptional customer satisfaction.

Don’t know where to start? Check out 8x8 Supervisor Workspace for contact center leaders.

Related content:

About Call Center SLA

Why High Availability Matters