Bringing Shrinkage Under Control
August 2024
Shrinkage measures the percentage of time agents who are scheduled to handle a forecasted activity are unavailable to perform this task. This key performance indicator (KPI) takes into account all activities that prevent an agent from performing the job for which they are scheduled. It’s important to measure and track shrinkage because it negatively impact’s a contact center’s ability to meet its service level commitments. The shrinkage calculation encompasses planned activities (e.g., breaks, lunches, paid time-off (PTO), holidays, training, team meetings, individual coaching sessions, etc.), unplanned events (e.g., absenteeism, leaves, tardiness/early departure, system downtime, etc.) and time lost when agents are out-of-adherence with their planned schedules.
In today’s complex omnichannel/multi-skill contact centers, shrinkage may also occur when there are variations in employee skills and skill proficiencies, as agents who are not fully trained to handle certain inquiries will take longer to address them. (In these scenarios, agents are assigned a proficiency rating in the WFM application for each skill, typically on a scale of 1% – 100%, which enables the system to account for individual agent performance capabilities. Ratings below 100% proportionally reduce the agent’s equivalence in the schedule.) This factors in ramp-up time when employees learn new skills or lower levels of proficiency when utilizing less frequently used skills, etc.
Agent attrition is another category that contributes to shrinkage in a contact center (or other department). Attrition is the rate at which the actual number of agents in a contact center is reduced. Staff loses can be voluntary (resignation, transfer, promotion, job abandonment, etc.) or involuntary (termination, disability, layoff, etc.). This is a very significant component of agent shrinkage in most contact centers and needs to be included in the shrinkage calculations used for long-term planning.
Agent shrinkage needs to be taken into consideration when building all types of schedules, including: “short-term” schedules for the next week, month, etc., to meet current forecast requirements; long-term planning to project future FTE resource hiring needs; and as part of intraday reforecasting/rescheduling that occurs throughout each day. Many WFM solutions still rely on contact center WFM administrators to calculate and apply their own shrinkage percentages manually during the scheduling process. Leading, and some contending vendors, are automatically calculating and providing this KPI based on historical patterns. Recently, more advanced WFM solutions have started to use AI technologies to automate the calculation of shrinkage and to provide more actionable information by breaking down the data into the underlying cause, schedule interval, and skill levels. These solutions also still allow WFM administrators to customize the categories and formulas, if they prefer.
Shrinkage cannot be avoided but contact center managers should implement programs to manage and minimize it and its impact on their service level. Providing agents with scheduling flexibility is a good place to start, as this is a top priority for employees today. Enabling agents to manage their own schedules via self-service capabilities and empowering them to trade a same-day shift or a portion of it instead of being marked “tardy” or “absent” will help to reduce shrinkage. Using gamification to motivate and reward agents to adhere to their schedules, will also help. Given the considerable amount of time and expense it takes to recruit, hire, train, and onboard new employees, coming up with positive ways to reduce shrinkage and attrition will improve the department’s culture and bottom line.