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Three Tips for Reducing Shrinkage in the Call Center

September 12, 2010

As anyone in the call center industry will tell you, labor is the single biggest cost facing any call center. That’s why, especially in this tight economy, it’s become critical for call center managers to account for every minute of every agent’s time.

Every minute an agent is on the clock but off the phones is money lost to the company. Multiply the average minutes lost per agent per day, week, month or year by the total number of agents you have and it’s easy to see how even a small problem – like a group of agents that consistently clocks in a few minutes late – can aggregate into a major operational loss. What’s more, this can lead to reduced service levels, and customer churn.

This lost-time-that-can-never-be-recovered is commonly referred to as “shrinkage.” Primarily a function of schedule adherence, it is a key measure of call center efficiency. Basically it is the amount of lost paid time that companies are willing to write off as “unavoidable” – a cost of doing business that they simply have to eat.

As a result, some companies, particularly small-to-medium sized businesses (SMBs), get complacent about it: When the shrinkage number creeps up they can easily come up with excuses as to why it’s happening and just hope it corrects itself. Still other companies underestimate the impact shrinkage can have on their call center operating budgets and as such they barely bother to track it.

But now that we’re in this tight economy, companies are looking for labor efficiencies wherever they can find them. As a result, they are increasingly adopting workforce management solutions to keep better track of shrinkage and improve call center management.

With these essential call center scheduling tools, call center managers can accurately see who is arriving late, leaving early, or taking long lunches or excessive restroom breaks. What’s more they can track activity on the agent’s phone and desktop to ensure the agent isn’t sitting there, idly, doing nothing.

Keeping track of shrinkage is particularly important for larger centers (with, say, 100 or more agents), but recent research from Monet Software, a provider of call center workforce management solutions, shows that there can even be an improvement in efficiency for centers with 30 agents or less.

For example, in a 30 agent call center, 20 minutes of shrinkage per agent equates to 10 hours per day in shrinkage. If those agents are being paid $12 per hour plus benefits, equaling $15 per hour, it means you are losing $150 per day, $750 a week, or $39,000 per year.

While it is not possible to recover all lost time, suppose you can reduce shrinkage from 20 to 10 minutes, resulting in a $20,000 savings alone, plus improved service levels. That is only the tip of the iceberg if you also consider lost sales due to shrinkage, which again, can easily add up to hundreds of thousands of dollars per year.

So how can you reduce shrinkage?

First, learn to better match call volume with agent availability through a flexible shift model. This can be achieved by deploying a workforce management (WFM) solution. With most of today’s WFM systems, agents can easily add or cancel shifts, just by accessing the schedule through a Web-based interface. They can even swap shifts with other agents, sometimes without manager approval.

Second, increase forecast and schedule accuracy by including additional parameters. This can also be achieved by deploying a WFM system. Today’s systems, such as Monet’s WFM Live offering, sport advanced forecasting capabilities that enable call center managers to accurately predict how many agents they will need for a particular shift on a particular day. Through integration with the call center ACD, the WFM system can retrieve call data and use it to arrive at an accurate forecast of how many contacts will be coming in based on call history. In turn, the call center manager can accurately schedule the correct number of agents to handle the volume. In fact, with today’s systems, managers can accurately forecast how many agents they need per type of skill set or type of contact (phone, e-mail, Web chat etc.).

Third, monitor and improve schedule adherence. As mentioned earlier, schedule adherence is the main cause of shrinkage. In order to ensure agents are clocking in and out when they are supposed to, and that they are staying productive when they are on the clock, call center managers are relying on workforce management systems to identify “problem” agents and take corrective action. In fact, any call center manager will likely tell you that today’s WFM systems are a significant improvement over spreadsheet scheduling in that they help them quickly identify trends in schedule adherence on a per agent basis (which obviously can be a challenge when you have 30 or more agents). With the efficiencies and cost savings they bring, today’s WFM systems have become a critical tool for achieving effective call center management.

Patrick Barnard is Group Managing Editor, TMCnet, focusing mainly on call and contact center technologies. He also compiles and regularly contributes to TMCnet e-Newsletters in the areas of robotics, IT and customer interaction solutions. To read more of Patrick's articles, please visit his columnist page.

Edited by Patrick Barnard

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