Everything in your forecast looks great, call volumes and average handle times are accurate, your schedule is in place to meet the expected demand. But you’re still missing service levels. So, what is the missing ingredient? Could it be shrinkage? Did you underestimate your shrinkage, or leave it out of the equation entirely? In many cases, shrinkage is underestimated, or calculated incorrectly.

What is Shrinkage?

Shrinkage is the value used to determine the total required staffing levels necessary to meet your business goals. In other words, it’s the amount of “over-scheduling” you must perform in order to have the right number of agents working at any given time of the day. Let’s face it, agents are going to call in sick and they’re going to take time off for various reasons. In addition, critical meetings and training will take agents away from their desks. These are all factors in shrinkage. Simply put, shrinkage is anything that keeps agents from being able to perform their main job function… interacting with customers.

Most contact centers average around 30% shrinkage, but it can range anywhere from 20% to 50%. The range is dependent on the type of business and the culture.

The best way to determine shrinkage is to break it into two distinct categories: discretionary and non-discretionary. Discretionary includes the things that we can control (e.g., meetings, training, vacation time, break time). Non-discretionary would be the elements we cannot control (e.g., late time, sick time, and any other unaccounted time.)

Let’s look at a simple illustration of shrinkage: Say you were operating a brick & mortar store. You decided to have a sale on widgets. Your plan is to sell 100 widgets in a day. So you purchase 100 widgets from your manufacturer to sell. But, once you receive the widgets, you realize you will not be able to sell all of them. Why? Ten were damaged in shipment, ten more are defective, and another ten are either lost in transit or miscounted by the warehouse. So, 30 of the widgets you ordered, you can no longer sell. Say hello to 30% shrinkage! This means, if you wanted to sell 100 widgets in your store, you would have needed to order at least 139 widgets from the manufacturer!

If we turned this example into contact center agents, it would translate like this: You need to staff 100 agents on the phones at a given interval of the day, to be able to answer the calls, meet your service goals, and decrease abandons as much as possible. In order to meet this demand, you need to schedule 139 agents.

Why 139 agents when shrinkage is 30%? This is one of the biggest misconceptions and miscalculations that occurs when determining proper shrinkage.

After all, 100 x 30% = 30. So why wouldn’t we schedule 130 agents to have 100 remaining after shrinkage?

How to Calculate Shrinkage

Let’s think it out. You’ve just scheduled 130 agents to be on the phones from the interval of 8:00 a.m. to 8:15 a.m. tomorrow morning. By tomorrow morning, 30% of them are lost due to shrinkage…. how many do we have left?

130 Agents – 30% Shrinkage = ? The answer would be 91 agents remaining instead of the 100 needed. Thirty percent of 130 agents is 39 agents lost due to shrinkage. You have already short-staffed yourself by 9 agents in that single interval of the day.

In order to determine true schedule needs after shrinkage, use the following calculation:

Required Base Staff / (1 – Shrinkage%) = Total Staff Required

100 / (1 – 30%) = 143