Question: What’s shrinkage and how should it be used in forecasting/scheduling?
Shrinkage is a key performance indicator (KPI) that measures the percentage of time scheduled agents are not actively helping customers or available to handle an interaction. It includes all factors that negatively impact staffing requirements and/or the pool of available agent resources. Shrinkage can encompass planned events (e.g., breaks, paid time off, training, team meetings, coaching sessions, etc.), unplanned events (e.g., absenteeism, leaves, tardiness/early departure, system downtime, etc.) and time lost when agents do not adhere to their planned schedules. Another kind of “shrinkage” in omni-channel and multi-skill environments is agent skills and skill proficiency. In most workforce management (WFM) solutions, agents are assigned a proficiency rating for each skill, typically 1% – 100%, which allows managers to factor in individual agent productivity. Anything less than 100% means the agent’s equivalence is reduced by that factor, to account for ramp-up time when learning new skills or lower proficiency for lesser used skills, etc. Attrition – the rate at which the agent workforce is reduced for voluntary or involuntary reasons – is also a shrinkage category.
Shrinkage needs to be taken into consideration when forecasts and schedules are generated and should be adjusted on an intraday basis to ensure resources with the right skills are available to handle forecasted interaction volumes while meeting servicing objectives. Shrinkage should also be taken into consideration when doing long-term planning to project future full-time equivalent (FTE) requirements. Shrinkage calculations, like the calculations for all contact center KPIs, vary depending on the factors that are included or excluded from the equation. The standard calculation for shrinkage is total interaction time divided by the total amount of non-interaction time, represented as a percentage. For attrition, this may be annual attrition, monthly attrition, rolling attrition based on a period of time, attrition for a particular subset of agents or a particular skill set, etc.