What is call center shrinkage, and how can it be reduced? Focusing on this key metric can dramatically impact call center efficiency.
For today’s customers, getting their calls promptly answered and receiving quick support without long wait times is one of the top expectations. Since every agent can only handle a single call at a time, call centers must ensure they have adequate staff to prevent missed calls and minimize customer frustration. That’s why it’s essential to understand and properly manage shrinkage in a call center.
What Is Call Center Shrinkage?
Call center shrinkage is a Key Performance Indicator (KPI) that measures agent productivity. It refers to when agents are scheduled to work but are not actively working. This vital workforce management (WFM) metric can help optimize outsourced teams and unlock business growth.
Several factors can contribute to call center shrinkage. The employee’s unavailability to handle customers can broadly be classified as:
- Internal Shrinkage: It occurs when employees are occupied with other workplace activities that prevent them from helping customers. Such situations can arise due to training sessions, coaching, team meetings, or special project work.
- External Shrinkage: It takes place outside the workplace and covers absences due to emergencies, agent illness, and other unforeseen circumstances.
- Planned Shrinkage: It refers to known or planned factors that inform the management beforehand of the absenteeism, allowing them to make arrangements accordingly. Examples of planned shrinkage include pre-informed leaves and lunch breaks.
- Unplanned Shrinkage: This shrinkage occurs due to unforeseen and unexpected events preventing scheduled agents from attending their shifts. Causes of unplanned shrinkage include prolonged breaks, non-adherence, and unexpected system failure.
While it’s impossible to avoid shrinkage completely, it can be effectively managed to keep the rate at a minimum. In call centers, shrinkage rates usually range from 30% to 35%, emphasizing the need for scheduled breaks to maintain service quality.
Call Center Shrinkage vs Occupancy Rates
Call center shrinkage and occupancy rate are distinct metrics. While shrinkage is when agents are paid but unavailable to attend calls, occupancy measures the time they spend on calls compared to their total available time.
High shrinkage rates can lead to lower occupancy rates, compromising the functioning and resource utilization of the call center. In contrast, high occupancy rates can indicate potential burnout and decreased productivity among agents. Finding the right balance between the two ensures that agents are present when needed while maintaining their well-being and overall activity.
How to Reduce Call Center Shrinkage
The call center industry relies on call volume, agent performance, and efficiency to thrive. It is vital to use a call center that ensures customer satisfaction and protects the company brand. Shrinkage can create longer wait times, decrease customer satisfaction, and make call centers less efficient. Regardless of the causes, call centers can take a few steps to reduce shrinkage.
Lower Inbound Call Volume With Self-Service Options
Reducing the call volume is the easiest way to lower the shrinkage percentage. Adding tools like interactive voice response (IVR) allows the callers to automatically route themselves without burdening the agents, reducing the number of calls and new hires – which makes the whole process simpler to manage.
Strategic Scheduling of Workplace Activities
Reducing shrinkage requires strategic planning of workplace activities, such as coaching sessions, team meetings, training, and one-on-ones. Scheduling and conducting these activities during low call volumes and non-peak hours can significantly reduce the shrinkage percentage and its negative impact on call center efficiency.
Reduce Turnover
To effectively reduce shrinkage, prioritizing a decrease in turnover is crucial. High turnover not only places undue stress on the team but also results in the loss of institutional knowledge and escalates costs through constant retraining of replacement staff, ultimately diminishing productivity.
At Remote Team Solutions, we recognize that maintaining a dedicated and stable workforce is pivotal. Our HR team is dedicated to fostering a supportive environment that significantly minimizes turnover rates—maintaining them at an impressively low average of 2%. This achievement is not just a metric for us; it reflects our deep commitment to creating a thriving workplace where every member feels valued and integral to our success. This approach ensures our clients always have a reliable, satisfied team, driving their projects forward with continuity and excellence.
Implement WFM Tools for Shrinkage Monitoring
Precise call scheduling starts with accurate forecasting. Regular shrinkage monitoring can help the management identify peak hours and tackle staffing shortages in advance. It can also highlight issues that affect and increase shrinkage and take timely measures to address them to improve overall operations.
Instead of tracking and calculating shrinkage manually with conventional methods, managers can use automated WFM tools to manage schedules more efficiently and easily monitor KPIs and other essential productivity metrics for making rapid predictions regarding staffing needs.
Address Lateness and Absenteeism
Unplanned absences are part of the shrinkage metric. These include agents taking extended breaks or unexplained leaves and overusing personal days or sick leave. Absenteeism can stem from recurring scheduling, employee burnout, or work stress.
To reduce absenteeism, start with great communication. Make sure to address unauthorized leaves and discuss them with the agents immediately. This can help address problems quickly and identify other potential issues. Keeping the absenteeism policy up-to-date and improving the workplace culture can also help.
Offer Incentives and Rewards to Motivate Agents
A lack of acknowledgment at work can demotivate agents, leading to increased attrition and shrinkage rates. Considering the stressful nature of the job, it becomes necessary to recognize and reward agents when they demonstrate excellent performance. This encourages them to give their best efforts, increasing engagement and team productivity.
Chances of internal promotion, recognition on leaderboards, offering incentives, and personalized rewards are a few examples.
Growth and Development Opportunities
Providing agents with career advancement opportunities, skill development, and continuous learning increases their engagement and dedication to their jobs, resulting in better adherence to schedules and decreased shrinkage.
Conclusion
Maximizing call center efficiency and enhancing customer experiences are critical for any business, and addressing call center shrinkage is key to achieving these goals. By leveraging the actionable insights and strategies presented in this article, managers can make significant improvements in their operations. Don’t let delays impact your bottom line—take swift action to reduce shrinkage and elevate your service delivery. By doing so, you ensure your call center operates at peak efficiency, driving satisfaction and loyalty among your customers. Let Remote Team Solutions help you implement these improvements with our expert staffing solutions, where quality and performance meet to help you thrive in a competitive environment. Choose to partner with us today and transform the way your call center operates tomorrow.
