Shrinkage, Occupancy & Balloons

By Bill Durr, Contact Center Consulting

The fundamental WFM concepts of shrinkage, occupancy and idle time are sometimes regarded as separate things. They are not.

Shrinkage is time you pay for but get no work. Occupancy is a measure of how hard an agent is working and is calculated by adding together talk time and after-call-work time divided by total sign-on time. Idle time, also referred to as available time, is time the agent is ready and able to take a call but there is nobody waiting in queue to speak with.

Shrinkage seems to be the concept that creates puzzlement for some people. It is an important subject for contact centers as it directly relates to the cost of operations.

It’s important to recognize that shrinkage comes in two varieties; planned and unplanned. Planned shrinkage consists of things such as breaks, lunches, official holidays, meetings and vacation time. Unplanned shrinkage consists of things such as absence, tardy, unscheduled breaks and the deeply mysterious “where did they go?” time. Obviously, it’s the unplanned shrinkage that will hurt you.

Many centers have problems dealing with unplanned shrinkage because it is often larger than they believe or perceive. Part of the problem is that some shrinkage is hidden by the processes used in centers. An example is the relatively standard practice of moving an agent’s scheduled break to conform with what the agent actually did. This comes about when the agent interacts with a customer and works into their break time. This triggers a schedule violation. Moving the schedule removes the violation. Good for the agent. Not so good for the center operations team. Now, they have lost sight of some real unexpected shrinkage. It’s better to have an approval/denial capability for schedule violations. Then, the agent isn’t unfairly penalized for staying on the call with a customer instead of going to break on time. And the operations team retains a handle on true shrinkage for forward planning purposes. The higher the shrinkage percentage, the greater number of staff you need on hand in the center to make sure that you have the appropriate number of people on the phones at all times. Carefully managing shrinkage saves money.

Lacking an approval/denial capability, centers ought to consider revising their schedule adherence goals if customer interactions frequently require agents to work into their breaks and lunches.

Occupancy is equally important but sometimes the dynamics involved are poorly understood. Occupancy is a measure of how hard agents are working. It is the flip side of idle or available time. Research shows that very high and very low occupancy increases agent turnover. When occupancy is very high, agents are working their brains out; one call after another relentlessly. When occupancy is very low, agents are bored out of their skulls. Both extremes drive turnover higher.

While occupancy is always a concern, it’s not something that is easy to manage because it is usually an outcome of choosing a service level for a given workload. I’m often asked what the standard for agent occupancy is. There isn’t one. Consider this scenario.

Suppose three different contact centers each have a service level goal of answering 80% of the calls in 20 seconds or less. With respect to occupancy the size of the workload is key. The bigger the workload, the larger the agent team will be. And, larger agent teams are always more efficient than small teams.

The first center expects to have 500 calls arrive every hour with a total average handle time of 210 seconds. Using Erlang C statistical tables, if you staff 34 agents, the expected service level will be 84% in 20 seconds and the agent occupancy will be about 86%. In other words, they will be talking or doing after-call-work 51.6 minutes in each hour.

The second center expects only 100 calls every hour with the identical average handle time. Erlang C now predicts that if you staff 9 agents, the expected service level will be 88% and the agent occupancy will be about 65%. These agents will be talking or doing after-call-work 39 minutes in each hour. They may become bored.

The third center expects 2,000 calls every hour with the same average handle time. Erlang C predicts that if you staff 123 agents, the expected service level will be 82% and the agent occupancy will be about 95%. These agents will be talking and doing after-call-work 57 minutes in each hour. Grueling.

Three different-sized agent teams dealing with their respective workloads at essentially the same service level have very different occupancy rates.
Inevitably comes the question, “My service level is fine but I need to lower occupancy. What do I need to do?”

In a way, this is like playing with a long, slender balloon. The air is workload. One end is labeled occupancy and the other end is service level percent. When you squeeze one end, the other end grows automatically bigger. Occupancy too low? It needs more air. Squeeze service level down. Occupancy too high? It needs less air. Squeeze occupancy. Service level gets bigger.

If there is a rule of thumb here it would be that small and large agent teams deserve different occupancy considerations and therefore different service level goals.

Bill Durr is the principal consultant at Contact Center Consulting. He has been involved in the contact center industry in a variety of roles for over 30 years, leading seminars, educational sessions, providing consulting services and authoring four books and numerous articles on technology and management processes. He maintains a web site with free downloadable resources at