Shrinkage

A question I am asked all the time is “what is shrinkage”. I will try to explain this now and give a brief breakdown of what is included in shrinkage and why we monitor and report on this. Managing shrinkage and planning for this can be the difference between achieving service and not achieving service.

What is shrinkage?

This is a percentage of your advisors time that they are not available to handle your incoming contacts, some shrinkage can be controlled or limited, some shrinkage is unavoidable and required by law. Basically any time your advisors are not handling your contacts is shrinkage, for example breaks, lunch, meetings and many other exceptions to being signed in taking calls. In the call centres I have worked in I have seen the percentage of planned shrinkage vary from 20% to 35%. You may think this is quite high but if you take a standard day of 8 hours then remove 30 minutes for lunch and two 15 minute breaks we are already at 12.75%.

Shrinkage exceptions

Here is a list of the most common exceptions included in shrinkage first is the list of the unavoidable exceptions. Although these are unavoidable they can be managed to a point by scheduling these at optimum times although there are rules around breaks in the shift as they have to happen within a certain criteria, for example in an eight hour shift the first break must be held around 2 hours into the shift within 45 minutes either side of the two hours. This is just an example as different companies have different rules.

Breaks, Lunch, Sickness, personal breaks, training (sometimes), AWOL and Special Leave

Here is a list of all the controllable shrinkage these can be scheduled by the schedulers to best help achieve service.

Holidays, meetings, coaching, training, 1 to 1, buzz sessions and offline admin work.

There are other codes used and other companies use different names, example buzz sessions could be called briefings, there is probably other names too, also things like jury duty, hospital appointments or other medical appointments, lateness and probably many more. If you have any other names leave a comment and I may add it to the list.

Calculation

The calculation for shrinkage is quite easy its just the amount of time spent in the shrinkage exception divided by the total time expected. Example breaks 30 minutes divided by 480 minutes = 0.0625, expressed as a percentage 6.25%.

If you are working out the shrinkage for a day say and you have 50 staff but 2 are on holiday and 2 are on the sick, that’s reduced your total hours available by 32 hours, this is 8% of your shrinkage, and should you use the full 400 hours to calculate the shrinkage or the reduced 368 hours. I personally believe you should remove the absence before calculating the shrinkage as they were never going to be available, and this shrinkage should be reported separately so if service fails we have not hidden them just not included in the main shrinkage percentage. This will however seem to inflate your shrinkage percentage as your breaks for example will be 12.5% (46/368=0.125) which is what we expected but if we did not remove the holidays as these people will not be taking breaks the percentage would show 11.5% (46/400=0.115), which is not really true.

I hope this brief explanation helps your understanding of shrinkage and if you have any further insight or ideas on how I could explain this better or if I have missed something please let me know and I will update the post.