Ever since the COVID-19 outbreak, outsourcing organizations have tried every trick in their satchel to attain normalcy. While the “New Normal” is working well for outsourcing organizations located in India but shrinkage continues to be a headstrong complication.

In the pre-COVID era, organizations could easily keep a tab on agents’ utilization and reduce shrinkage. With employees working remotely, call center shrinkage has increased and it is reflecting in monthly reports.

What is Call Center Shrinkage?

The time frame spent by call center agents on attending non-productive tasks like tea breaks, documenting paperwork, team meetings, coming late to work, or staying out of performance bay due to sickness, is collective percentage is called Shrinkage.

Shrinkage is an important call center metric and every manager should monitor it closely; a positive movement on the scale can result in more calls being answered, more products being sold or more customer queries being resolved.

Numerous factors contribute to shrinkage but industry experts have divided them together into two groups namely, internal factors and external factors. While contact center managers can monitor internal factors closely, they merely have any control over the external factors.

Impact of High Call Center Shrinkage Rate?

A sudden increase or drop in call center shrinkage can have diverse impacts. Since, shrinkage is merely dependent upon “how agents fare during a particular stint”, it can affect production levels during high-traffic days and affect business growth.

Handing shrinkage effectively is indispensable since it directly impacts the number of calls answered and the number of products sold. Let’s look at the multiple impact’s shrinkages can have:

Lesser Number of Agents: If due to external factors like weather or catastrophe, agents stop coming to work, the overall shrinkage will increase, leading to a lesser number of agents and a greater number of calls. In such scenarios, the average delay of delayed calls, delay, and peak hour traffic-like metrics will get affected too.

For outsourcing organizations handling banking contact center services, the impact can be disastrous. The NBFCs will lose out to huge opportunities and the CSAT score will take a hit too.

Work Getting Piled On: For outbound call centers, a spike in shrinkage means a lesser number of calls being made daily. With no accurate forecasting, the disparity in the number of calls made and the number of calls expected will increase.

Such instances will set the entire contact center in pullback-like situations. Since these are outbound calls and they need to be made during a specified period, agents simply cannot stay back late and complete these calls.

The manager will have to reschedule the entire week just to accommodate these calls or request an additional agent. No matter the case, the overall expense will increase while the production declines.

Affects the Downline: All outsourcing organizations work to help end clients save cost, increase efficiency, drive more target results, and offer a quality user experience. With a sudden spike in call center shrinkage, all of the aforementioned benefits will get affected. Businesses will lose out on opportunities and it will affect the call centers’ revenue.

Call Center Shrinkage Factors

As mentioned earlier, call center shrinkage factors are broadly divided among internal and external factors. Both these factors affect agent production, which has a dire impact on the revenue of businesses and end-user experience.

Fixing these innocuous challenges by following the call center shrinkage benchmark can help organizations ensure that all incoming or scheduled outgoing calls are attended to on time. Controlling the below-mentioned factors can help achieve the standard call center shrinkage level.

 External Shrinkage Factors: This group includes factors that are out of the manager’s control. These factors are either controlled by local government or have a nature contributing to them.

Some of the top external call center shrinkage factors are:

Holidays & vacations: Unscheduled holidays or vacations due to election, death of a prominent personality, calamity, or poor weather are collectively put under this bracket. No stakeholder can control these factors, in fact not providing the mentioned holidays or vacations can invite legal action by local authorities

Sick time: Another unseen circumstance that is beyond the control of executives of a call center. Call center shrinkage is perhaps affected the most by sick-time filed by agents. With several employees falling sick simultaneously, a call center’s plan gets thrown off track.

Absenteeism & Lateness: Lack of professionalism shown by employees in taking sudden leaves affects the overall production and impacts shrinkage negatively. With more and more employees starting to come late or calling in sick all of sudden, the number of calls answered is lower than the number of expected calls, leading to work piling on. Add documentation, team meetings, tea breaks, and additional work, and the overall percentage of time wasted increases.

Leaving early: Poor management of call center agents also leads to call center shrinkage standards being not achieved. By not keeping a tab on employees, managers are letting them sweep in late and sweep out early, leading to a huge increase in shrinkage.

Internal Shrinkage Factors: Collectively these are factors, which can be controlled by managers if they pay attention. Internal shrinkage factors that occur inside the premises of the contact center can be controlled or reduced by effective training, proper work routine, or simply by keeping a tab on all agents.

Scheduled breaks: It is necessary to maintain a balance between work and leisure. By allotting enough breaks, managers are ensuring that their agents are ready to put their best foot forward. Scheduled breaks are a prime factor that impacts shrinkage and they can be controlled by managers. With a little effort on metrics like accurate forecasting, delay, and calls per hour, leaders can identify time-frame, when the requests are low, they can a lot of breaks to agents and reduce the overall shrinkage.

Team meetings & training: Team activities and mentoring sessions are necessary to build a rapport among the agents and to ensure a productive environment. Yet again, these can be scheduled better by managers to reduce the impact on shrinkage. Identify the right time frame and schedule these meetings when the number of calls is very low.

Report Work: Once agents are done taking calls, they are required to fill a sheet. The sheet often consists of common challenges faced by a customer, additional requests by customers, or regular updates like several calls answered and sorting them into categories.

What is An Acceptable Call Center Shrinkage Percentage?

Managers spend hours trying to achieve asymmetry between the expected shrinkage and the actual shrinkage percentage. The stakeholders often overgo and file a request for additional resources, systems, and facilities to ensure a reduction in overall shrinkage.

To achieve a figure close to the call center shrinkage benchmark, there’s not much required to do. A little adherence by all agents, for the management of metrics like forecast accuracy and delay, can help contact centers achieve the standard call center shrinkage percentage.

The call center shrinkage benchmark is as low as 30-35%. As mentioned earlier, the said benchmark can be easily achieved by ensuring adherence to schedule and proper planning in advance.

How to minimize Shrinkage at Call Centers?

Minimizing shrinkage at both inbound and outbound call centers is necessary because it is a silent killer. It erodes profit, brings a bad name, affects the overall production, and affects the service level agreements too.

Focusing on call center shrinkage reduction requires the organization to have some rules in place and ensure adherence to them by everyone. Apart from strict rules, some of the common ways of reducing shrinkage are:

Proper Arbitration

The contact center needs to do a thorough study of their capabilities, agents available, infrastructure, and available systems. The proper understanding of capability will help them plan better. Traversing through the resources will help them:

• Identify if they have enough systems
• If the infrastructure is adequate or requires improvement
• Agents’ production level

Once the above-mentioned factors are worked upon, contact centers will be able to:

• Predict call volume better
• Reduce average delay of delayed calls
• Improve forecast accuracy

A positive increase in the above-mentioned three metrics will ensure a proper reduction in shrinkage taking them closer to the industry call center shrinkage benchmark.

Upgrade Infrastructure

The call center shrinkage standard across industries are changing because:

• Technology has evolved
• Effective IVRs are now available
• Systems are faster
• Omnichannel expertise at play

Since the well-funded agencies are leveraging state-of-the-art technology and infrastructure, they are taking the benchmarks higher. If you continue to operate from the grumpy-ole infrastructure using outdated operating systems, your shrinkage percentage will be higher.

Simple investments can help the organization improve against the industry benchmark and grab more valuable projects. Here’s what to do:

• Conduct an audit
• Identify all the requisite upgrades
• Priorities updates will direct impact on shrinkage like OS & hardware
• Use better metric management tools or simply outsource

Train Agents on Latest Paradigms

In contemporary times, contact centers are working as the center of excellence. They are helping businesses add new capabilities to outnumber their competitors. If your agency is failing to offer end clients more than what is asked, you are likely to be out of business soon.

If you are running an in-house contact center, start investing in tech upgrades and training agents or go the outsourcing route. Similarly, training agents on the latest technology is necessary because:

• It can reduce average handle time
• Ensure agents can take more calls
• The new tools are designed to reduce after-call work
• The upgraded technology assists on call

Manage Agents Effectively

Managing agents effectively include:

• Keeping a tab on attendance
• Rewarding pro-organization culture
• Setting accountability
• Proper scheduling
• Leave or holiday management
• Ensuring immaculate scheduling

When agents are managed effectively, they are motivated to give their best. By engaging them in one-to-one talk and through team-building exercises, managers can get them in a productive mindset and help them achieve greater things at work.

When employees are motivated, they are likely to give their best. Managing agents is also about ensuring no one can come late or leave early. All moves need to be monitored and used as a metric to reward or penalize agents.

Adopt Experimental Approach 

Well, not all problems are solved through technology or proven paradigms. Often spontaneous and impromptu decisions help organizations achieve greater feats. Similarly, by letting agents pour their thoughts about the existing system and how they can help improve it, organizations can unlock some hidden gems,

Since all systems in the world are created by problems faced by people, contact center agents can contribute heavily to the contact center culture and help it improve too. Some agents try to work differently, they build their systems to minimize distraction and achieve better accuracy.

Identify those systems and promoting them among the team can help every agent achieve improved accuracy leading to lesser shrinkage and more production. Rewarding such moves is also important because it makes agents feel valued. Once you start rewarding them for their feats, they are likely to repeat the behavior, which organizations can surely bank upon.

Final Thoughts on Call Center Shrinkage

This silent killer needs to be monitored and reduced with urgency because the competition is getting stiff and it has no space for players with laggards piled works. Achieving the call center shrinkage benchmark is important because it ensures all plans are being implemented effectively.

For many organizations with an in-house call center, managing these 30 call center metrics is not possible. They are busy curating a product that is loved by end-users. By leveraging call center outsourcing as a viable method, organizations can save enough resources and time to invest in products or activities that help them achieve unprecedented growth.