Industry Standard Call Center Shrinkage

Forecasting

Apr 01, 2002

I work with a broad range of call centers in the financial area. We have sales call centers, technology help desks, general client servicing call centers, specialized servicing call centers, and online banking troubleshooting call centers. One of the primary measures we focus on is the shrinkage percentage in each call center. We have a new leader, and she is interested in comparing the existing shrinkage percentages of each of these call centers to the industry "standard" shrinkage. We see a range of 15% to almost 50% across these call centers. I have read that the "standard" is 28%-32%, but my guess is each different type of call center may have a different industry standard for shrinkage. Can anyone share their call center shrinkage information with me? -- Kathy Stacy, Keybank

If you're interested in industry standards, make sure you check out Brad Cleveland and Ted Hopton's article on the subject: "Industry Standards Cannot Replace Sound Decisions."

Answers

  • Posted at 12:00AM on May 1, 2003

    It depends on how you define shrinkage. 15-20% seems appropriate for a day of unproductive shrinkage. If you include time off the phone for coaching, training, planned vacation time, etc., the standard will be much higher. We have difficulty defining good shrinkage in lieu of measuring daily adherence. -- Kathie Cannon

  • Posted at 12:00AM on May 1, 2003

    Kathy, what a great question! First, I want to say that I am glad to hear you are using shrinkage, which indicates that you are accounting for all the things that keep representatives from answering calls, emails and other contacts.

    As you indicated in your message, these activities, which include things like

    • Breaks
    • Lunch
    • Meetings
    • Coaching
    • Absenteeism
    • Vacation
    • Research
    • Projects

    and so on, can account for a significant amount/percentage of a representative’s paid hours.

    Second, as you also alluded to, this percentage can vary from call center to call center, company to company, industry to industry, groups within call centers, etc., because the type and mix of contacts, channels, skill levels, turnover, etc. vary…all of which will impact what that shrinkage percentage will be. Just as a simple example, in a help desk where there is a significant amount of off phone research that needs to be done on specific issues there would probably be a greater shrinkage percentage than an order entry group that has fairly routine, simple contacts.

    Lastly, while there may not be an industry standard, I will say that what is always valuable and may help you (a) first validate and then (b) explain the variances you are experiencing in your centers is to:

    1. Get a team together from each center (made up of some supervisors, team leads, representatives and other key stakeholders) and list all the activities currently included in shrinkage along with some key trending information.
    2. Then ask the team to really do some thinking, discussing and digging about these activities…i.e., why are we doing them? What is the benefit? What trends have we seen? Why? Is there anything missing? Can we impact any of these areas (reduce, etc.)?
    3. Then perhaps do a few "what if" scenarios…what would happen if we reduced shrinkage to “x”? What would the impact be if we reduced shrinkage to “x” but we really needed “y”? And so on.

    The results could then be shared with your management to (a) show them that there was significant thought and analysis done on these activities, they are truly necessary and explain why they may vary depending on the center, and b) show them the impact of not accounting for these activities on customers, employees and ultimately shareholders.

    I hope this helps!

    -- Rose Polchin, President, RPolchin Consulting and Training, Certified Associate, Incoming Calls Management Institute, Tel. 201-652-0443, Fax 603-806-8162, rpolchin@att.net

  • Posted at 12:00AM on Aug 1, 2003

    We have a large call center (250 associates). I recently had a scheduling trainer offer a new perspective on shrinkage. He said you must account for two things in shrinkage, absenteeism and adherence. We have adjusted our shrinkage to 38%. Adherence: I was scheduled for 10 am, but didn't arrive until 10:15. Absenteeism: I was scheduled 10:00 - 18:00 and called in sick. However, you are correct the shrinkage will be different for every environment. Our only short fall was that we were using shrinkage for absenteeism and not adherence. I hope this helps. --Candy Settle

  • Posted at 12:00AM on Oct 1, 2003

    We have a similar situation in our financial services company. We measure shrinkage as anything other than phone talk time, approved after call work and wait time.

    I have found shrinkage is directly related to the amount of off-phone work required for each job type. For example, our sales centers tend to have smaller shrinkage simply because there is very little off-phone work. Our escalated customer service reps have a much higher shrinkage because of the time spent researching issues. I don't think there is a standard, but consider the different jobs your reps are performing. -- Eric Langer, Wells Fargo Home Mortgage

  • Posted at 12:00AM on Jan 1, 2005

    First, I like to look at an overall level: How productive you are compared to paid hours. For most call centers, anything above 30% is out of control. I then try to manage shrinkage at two sub-levels: 1. At-Work Shrinkage 2. Not at-work Shrinkage

    At-work shrinkage can be managed two ways:

    1. Schedule Adherence Monitoring & Reporting (make sure it is included as one of your KPI's).
    2. Through a formal schedule exception policy that covers when and how agents can be off the phones. For example, all at-work shrinkage exceptions such as meetings must be pre-approved and are not to be entered after-the-fact. The incenctive to follow the schedule exception policy is the schedule adherence measurement result at the agent level and at the supervisor and manager level.

    To manage Not at-work shrinkage sometimes requires a change in unplanned absence policies or just an enforcement of existing ones. Either way, you want to minimize unplanned absence and its impact on service levels. -- Chad Andree

  • vikram.mago Posted at 12:00AM on Jan 27, 2006

    Shrinkage can be broken into two parts: gross shrinkage and dynamic shrinkage. We have 365 days in a year, so if we have a 5 day working week then 104 days are not working days, hence 261 days are work days. Allowing 24 approved leaves /agent, 6 sick leaves per year per agent and 10 holidays /year per agent, then gross shrinkage for planning will be 15%. Take 10% for dynamic shrinkage (absenteeism, etc.) and this makes it a total of 30%. For offline activities one can add another 3%, which makes a total of 33% planning shrinkage. This you can match with actual shrinkage values (scheduled hrs - actual hrs) and adjust planning shrinkage accordingly. -- Vikram Mago, Wipro

  • Ruby RM Posted at 12:00AM on Apr 28, 2006

    I'm interested in knowing exactly what makes up shrinkage. Are public holiday hours included in off phone shrinkage? Training is included in on phone shrinkage BUT what about training for new recruits? -- Ruby RM

  • Jay Tuazon Posted at 12:00AM on Jun 2, 2006

    Shrinkage or RSF (Rostered Staff Factor) is a numerical factor that leads to the minimum staff needed to schedule over and above base staff required to achieve your service level and response time objectives. It is always calculated after base staffing is determined. These are breaks, absenteeism, and the like which were enumerated above. Public holidays should be considered in the shrinkage factor if you are not going to staff your center during these days or other days which are considered bank holidays. If this is not the case (especially if your center operates 24/7), then you should not include this in your computation. Training for new recruits should not be considered in shrinkage. Shrinkage computation will only be applied once the trainees have gone live on the shop floor. Hope this helps. -- Jay Tuazon, SMART I-Contacts Corporation

  • AP Posted at 12:00AM on Aug 24, 2007

    The best and the practical way of deriving a shrinkage rate would be {rostered (number of manhours-hours spent on completion of the task-breaks/refresher)}. Superficially if you look at it, it would be termed as an ideal time wherein an agent is in a non-task or no task phase. Lastly, the shrinkage is based on the nature of call handling activity you are in, for example, a Telecomm process would have less shrinkage than an Insurance one. -- AP

  • Bilal Waris Posted at 12:00AM on Jul 28, 2008

    I do not think that there is any industry standard of shrinkage. I manage a big call center of 800 agents, and we have managed to keep shrinkage to 12% of the entire last year. One has to decide shrinkage by looking at the business implications and what is acceptable for running a smooth operation. Regard. -- Bilal Waris, Telenor Pakistan

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