How to Calculate and Reduce Call Center Shrinkage Effectively

What is call center shrinkage?

Call center shrinkage is a crucial metric that quantifies the amount of time when call center agents are being paid but not actively engaged in handling customer calls. Essentially, it represents the gap between the total paid hours and the actual productive hours spent on customer interactions. This can include paid leave, time spent on breaks, training sessions, during meetings, or dealing with technical issues.  

There are primarily two kinds of call center shrinkage:

1. Planned shrinkage: On account of work-related and pre-planned activities such as training, meetings, lunch breaks, and paid time off. These activities are factored into the call center workforce management plan. 

2. Unplanned shrinkage: In contrast, unplanned shrinkage occurs when agents are unexpectedly unavailable, such as due to sick leave, absenteeism, or technical issues. 

Understanding shrinkage is crucial for call center management as it affects operational efficiency. High shrinkage can cause understaffing during peak times, leading to longer wait times, higher call abandonment rates, and lower customer satisfaction. On the other hand, well-managed shrinkage can help optimize staffing and avoid agent burnout in call centers. It also helps improve service delivery and maintain customer satisfaction.

How to calculate call center shrinkage 

Calculating call center shrinkage is essential for understanding how much time your agents are unavailable to handle customer calls, which in turn helps with proper call scheduling and forecasting. Here's a simple formula to help you calculate it:

In the formula above,

• Total time off refers to all the time agents are not available to take calls on account of breaks, meetings, training, vacations, etc. 

• Total available time is the total number of hours agents are scheduled to work.

Now, to calculate the shrinkage rate in terms of hours for individual agent performance, you can use the following formula:

Let’s assume an agent works 8 hours a day, adding up to 40 hours per week. This agent spends 12 hours per week on activities like lunch breaks, training, and scheduled meetings (internal shrinkage). Additionally, the agent experiences 5 hours of external shrinkage each week due to late arrivals and extended breaks. 

Now, to calculate the shrinkage rate:

This means the agent was unavailable to handle customer calls for 42.5% of their scheduled work time during the week.

Planned shrinkage vs. unplanned shrinkage in call centers 

Understanding the differences between planned and unplanned shrinkage is crucial for effective call center management. Here's a clear comparison to help you grasp their distinctions and implications:

By understanding and differentiating between planned and unplanned shrinkage, call centers can implement better management strategies to ensure optimal performance and efficient workforce planning.

Impact of shrinkage on call centers in large organizations 

Enterprises should aim to keep their call center shrinkage below 30%. High shrinkage rates can lead to increased operational costs, reduced customer satisfaction and lower employee morale. By maintaining a lower shrinkage rate, enterprises can ensure better resource utilization, improved service levels, and a more motivated workforce.

Shrinkage can significantly impact the efficiency and performance of call centers, especially in large organizations. Understanding the internal and external factors that contribute to shrinkage is crucial for managing it effectively.

#1. Internal factors

• Scheduled breaks: These are necessary for agent well-being but reduce the time agents are available to handle calls. 

• Training sessions: Regular call center agent training is essential for skill development and maintaining high service levels, but it temporarily takes agents away from their primary duties. 

• Meetings: Team meetings and one-on-one sessions with supervisors are important for communication and performance reviews but contribute to shrinkage. 

• System downtimes: Technical issues and system maintenance can prevent agents from working, leading to increased shrinkage. 

• After-call work (ACW): Time spent on post-call tasks, such as updating records and completing follow-up actions, reduces the time available for handling new calls. 

#2. External factors 

• Sick leave: Unplanned absences due to illness can disrupt staffing levels and increase shrinkage. 

• Absenteeism: Agents not showing up for their shifts without prior notice can lead to understaffing and longer wait times for customers. 

• Holidays and vacations: Planned time off for agents needs to be managed carefully to ensure adequate coverage. 

• Seasonal fluctuations in call volumes: During peak seasons, such as holidays or special promotions, call volumes can increase significantly. If not managed properly, this can lead to higher shrinkage rates as more agents are needed to handle the increased demand. 

Due to all these factors, there are severe implications for the functioning of an enterprise call center:  

• High shrinkage can lead to increased workload for the available agents, causing stress and burnout. This can result in higher turnover rates and additional costs for hiring and training new staff. When agents are overworked, the quality of their interactions with customers can decline, leading to mistakes, miscommunications, and a generally lower standard of service. 

• Moreover, high shrinkage can make it challenging to meet predefined service level agreements (SLAs), which can affect the call center's reputation and lead to penalties or loss of business. Consistently high shrinkage rates can negatively affect team morale, as agents may feel overburdened and unsupported, leading to decreased motivation and productivity. 

Managing high shrinkage requires more complex workforce planning and scheduling, which can be time-consuming and require advanced call center software and strategies. customer retention and loyalty.

7 strategies to control shrinkage in call centers or BPOs 

Managing shrinkage is crucial for maintaining high service levels and operational efficiency in call centers and BPOs. Here are some advanced strategies that C-suite and enterprise leaders can implement to control shrinkage effectively: 

1. Accurate forecasting and scheduling 

Using historical data to predict call volumes and agent availability helps create realistic schedules that account for shrinkage. Considering seasonal fluctuations and special events allows for adjusting staffing levels to ensure coverage during peak times.

Call center forecasting

It predicts the volume of incoming calls to a call center using historical data and trends, aiding in resource planning and maintaining service levels. Accurate forecasting ensures the right number of agents are available to handle expected call volumes efficiently. 

Call center scheduling

Call scheduling assigns shifts to call center agents based on forecasted call volumes to ensure optimal performance and customer satisfaction. Effective scheduling matches agent availability with predicted demand, helping to maintain service levels and improve operational efficiency.

😊 Important to note

AI-powered workforce management software elevates forecasting by accurately predicting future case volumes, handling times, and SLAs across all channels using historical data. It offers flexibility to easily adjust schedules and reduces supervisor workloads by automating shift planning for all locations.

Features like bulk edits, shift swapping, and bidding empower teams to manage schedules efficiently, boosting operational performance and employee satisfaction.

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2. Real-time adherence monitoring:

Real-time adherence (RTA) monitoring is a crucial tool in contact centers for optimizing agent performance. It provides supervisors with instantaneous insights into agents' activities and their adherence to scheduled tasks. Key components of RTA include tracking agents' current status, scheduled activities, and any deviations from the schedule.

The RTA dashboard updates every 10 seconds, ensuring supervisors have the most current data to make informed decisions. This dynamic approach helps maintain operational efficiency, address issues promptly, and enhance overall customer service.

3. Employee engagement and motivation 

Employee engagement and motivation are crucial for enterprises aiming to maintain high performance and satisfaction within their contact centers. Effective quality management systems, such as those offered by Sprinklr, are instrumental in achieving this by providing real-time insights into agent performance and compliance. These systems enable personalized coaching and feedback, helping agents understand their strengths and areas for improvement.

By fostering a culture of continuous learning and development, enterprises can ensure that their agents feel valued and motivated. Additionally, features like AI-driven quality assessments and customizable dashboards empower agents to take ownership of their performance, further enhancing their engagement and motivation. This approach not only boosts individual performance but also contributes to the overall success and efficiency of the enterprise.

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4. Data-driven decision making

Using predictive analytics to identify patterns and trends in shrinkage helps forecast future rates and plan accordingly. Leveraging AI and machine learning algorithms to predict shrinkage based on historical data, agent behavior, and external events provides more accurate forecasts and aids in proactive planning.

Additionally, running staffing simulations allows enterprises to predict staffing levels proactively. These simulations can model various scenarios, such as changes in call volume or agent availability, to determine optimal staffing levels. This approach ensures that contact centers are neither overstaffed nor understaffed, leading to improved efficiency and service quality.

5. Effective communication and feedback 

Maintaining open lines of communication with agents about schedules, expectations, and performance metrics can reduce misunderstandings and improve adherence. Providing regular feedback on performance and attendance helps agents understand their impact on shrinkage and motivates them to improve. 

Using AI scoring parameters and scorecards can further enhance this process by removing guesswork from performance measurement, feedback, and training. AI-driven scorecards provide objective, data-backed insights into various performance metrics, such as call quality, adherence to protocols, and customer satisfaction.

This allows for more precise and actionable feedback, helping agents to clearly understand their strengths and areas for improvement. By leveraging these tools, contact centers can foster a culture of transparency and continuous improvement, ultimately leading to higher agent engagement and better overall performance. 

6. Contingency planning

Developing a pool of backup agents ensures there are always enough agents available during high shrinkage periods. Cross-training agents to handle multiple types of calls and tasks increases flexibility and ensures coverage during absences.

7. Technology and automation 

Implementing self-service options like interactive voice response (IVR) systems and chatbots can handle routine inquiries, reducing the burden on live agents and allowing them to focus on more complex issues.  This reduces the likelihood of agents becoming overwhelmed during peak times, leading to fewer unplanned absences and lower stress levels.

Additionally, with routine tasks automated, agents can adhere more closely to their schedules, improving overall operational efficiency and helping maintain service level agreements (SLAs). Additionally, using automated scheduling tools to create and adjust schedules based on real-time data and predictive analytics helps reduce manual errors and ensures optimal staffing levels. By implementing these strategies, enterprise leaders can effectively manage shrinkage, improve operational efficiency, and maintain high levels of customer satisfaction.

How to monitor call center shrinkage in real-time 

Monitoring call center shrinkage in real-time is crucial and here’s how advanced workforce management solutions like Sprinklr can help call center leaders monitor these metrics effectively: 

1. Real-time agent adherence [RTA]: Measures whether agents are following their scheduled activities, including breaks, lunches, and training sessions. Sprinklr's RTA dashboard provides real-time adherence monitoring, highlighting deviations and allowing managers to take immediate corrective action.

2. Real-time occupancy: Indicates the percentage of time agents are actively handling calls versus being idle. Sprinklr's live dashboards display real-time occupancy rates, helping managers ensure optimal agent utilization. 

3. Call volume: Tracks the number of incoming calls in real time to ensure there are enough agents available to handle the demand. Sprinklr's call center software provides real-time call volume data, enabling dynamic staffing adjustments based on current demand. 

4. Call center service level: Measures the percentage of calls answered within a specified time frame, assessing the impact of shrinkage on customer service. Sprinklr's real-time dashboards display service level metrics, allowing managers to make quick adjustments to maintain targets. 

5. Call abandonment rate: Tracks the percentage of calls that are abandoned by customers before being answered, indicating potential understaffing issues. Sprinklr's call center software provides real-time abandonment rate data, helping managers identify and address staffing shortfalls promptly. 

6. Shrinkage rate: Calculates the percentage of time agents are unavailable due to both planned and unplanned activities. Sprinklr's WFM software calculates and displays shrinkage rates, providing insights into overall agent availability and helping in proactive planning. 

7. Predictive analytics: Uses historical data to predict future shrinkage patterns and trends. Sprinklr's AI and machine learning tools analyze historical data and predict shrinkage, enabling proactive decision-making and better resource management.

By leveraging Sprinklr's comprehensive suite of tools, call center leaders can monitor these metrics in real time, ensuring efficient operations and high levels of customer satisfaction.

3 use cases of managing call center shrinkage for 2025

Effectively managing call center shrinkage is crucial for maintaining high service levels and operational efficiency. Here are a few use cases that highlight innovative strategies and technologies large organizations are using to reduce shrinkage and enhance customer experience in 2025.

Use case 1: Implementing AI-powered workforce management 

Problem: A company faced high shrinkage rates due to unpredictable call volumes and frequent unplanned absences.  

Solution: By implementing an AI-powered workforce management platform like Sprinklr that uses predictive analytics to forecast call volumes and agent availability, it could make real-time adjustments to staffing levels.  

Outcome: Drive 2x productivity with 30% less administrative workload using AI-powered workforce management. 

Use case 2: Enhancing employee engagement and flexibility

Another organization struggled with high absenteeism and low agent morale. They introduced flexible work schedules and remote work options, supported by a robust employee engagement program. This approach reduced unplanned shrinkage, improved job satisfaction, and enhanced overall performance.

Use case 3: Utilizing self-service technologies 

A company experiencing high shrinkage due to lengthy after-call work and frequent system downtimes implemented self-service technologies like advanced IVR systems and AI-powered chatbots. This reduced the time agents spent on after-call work, decreased shrinkage, and allowed agents to focus on more complex issues, improving service quality. 

Wrapping up 

In conclusion, high shrinkage rates can lead to understaffing during peak times, resulting in longer wait times, higher call abandonment rates, and lower customer satisfaction. These issues are particularly pronounced during holiday surges, with unplanned absences and system downtimes further straining resources and impacting service levels. Consequently, maintaining operational efficiency and meeting service level agreements (SLAs) becomes increasingly challenging. 

By integrating AI and machine learning, Sprinklr's Workforce Management Software provides accurate forecasting and real-time monitoring, enabling dynamic adjustments to staffing levels. This ensures that call centers are adequately staffed to handle fluctuating call volumes, especially during peak periods like the holiday season. 

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