Introduction
Have you ever wondered why call centers struggle with efficiency despite having enough employees? The answer lies in shrinkage. But what exactly is it?
Shrinkage refers to the time employees are unavailable to handle calls. Even though they are getting paid. It includes breaks, meetings, leaves, training, and unexpected absences. In industries like Business Process Outsourcing (BPO), employee unavailability directly affects productivity and customer satisfaction.
To maintain smooth operations, companies must calculate shrinkage percentage and take necessary steps to reduce it. Let’s dive into the details!
What is Shrinkage?
Shrinkage is the total time employees are unable to take calls due to various reasons. It falls under two categories:
- Planned: Includes scheduled leaves, week-offs, and paid breaks.
- Unplanned: Covers absence, sudden half-days, system downtime, and emergencies.
High shrinkage means fewer employees are available for customer service. Thus, leading to longer wait times and poor service quality.
How to Calculate Shrinkage?
Calculating employee unavailability percentage helps in workforce planning. There are two formulas:
Formula 1: General Calculation
Shrinkage (%) = (Planned + Unplanned) / Total Headcount × 100
Formula 2: Individual Calculation
Shrinkage (%) = (Total External Hours + Total Internal Hours) / Total Available Hours × 100
Example:
If a call center has 210 employees available in a shift and shrinkage is 30%. Then, the actual number of required employees will be:
210 / (1 – 0.3) = 300 employees
Thus, the company needs 300 employees to maintain effective operations, considering 30% of the workforce will be unavailable.
What is an Acceptable Shrinkage Percentage?
In the BPO industry, an acceptable shrinkage percentage is between 30-35%. If it crosses this limit, businesses should take corrective actions to avoid productivity loss.
How to Reduce Employee Unavailability?
Reducing employee unavailability improves efficiency and customer experience. Here’s how you can control it:
1. Schedule Proper Breaks and Activities
“All work and no play makes Jack a dull boy.” Employees need timely breaks to stay productive. Scheduling breaks during non-peak hours ensures business continuity.
2. Track Employee Performance Regularly
Monitor call volume, handling time, and customer feedback to identify underperformance. Use this data to improve training and reduce employee unavailability.
3. Conduct Training Sessions
Proper training on communication skills and handling customer complaints helps employees work efficiently. Well-trained agents take fewer breaks, reducing employee unavailability.
4. Implement Performance-Based Incentives
Motivate employees with performance appraisals. For example, if an agent successfully completes 200 calls per month, they can get a 10% salary bonus.
5. Monitor Call Center Metrics Continuously
Track key metrics like call volume, handling time, and missed calls to detect shrinkage-related issues. Regular monitoring helps in quick decision-making.
The Crux
Shrinkage is a critical factor in call center efficiency. By tracking and reducing employee unavailability, businesses can enhance customer service and increase productivity. Implementing strategies like scheduling breaks, monitoring performance, and offering incentives can significantly lower employee unavailability rates.
Are you tracking employee unavailability in your organization? If not, start today to improve efficiency and deliver exceptional customer service!
