Understanding and Managing Shrinkage in Contact Centers

Access Five9’s new WEM Savings Calculator now to see what ROI WEM can deliver for you. 

What is “shrinkage” in the contact center and why should you care? 

Shrinkage is a term often used in the contact center industry to describe the time when agents are not available to handle customer interactions. This includes breaks, training sessions, and meetings, which are planned in advance. And it can also include unplanned events such as unexplained absences and sick days. While some shrinkage is normal and expected, contact centers should ensure it does not exceed the industry average of about 30-35%. 

 
Defining shrinkage 

Shrinkage is typically expressed as a percentage and can be calculated using the formula: 

Shrinkage = (time spent on non-customer-facing activities/total time) x 100 

Where: 

• Time spent on non-customer-facing activities includes all activities that prevent agents from being available to handle customer interactions (e.g., breaks, training, meetings, sick days, etc). 

• Total time is the number of available working hours. 

Your contact center’s exact definition of shrinkage will likely vary from other contact centers. For instance, your contact center may only include unplanned events as shrinkage. The key is to capture the baseline data and make adjustments to improve efficiency. 

Here are some practical examples of planned shrinkage: 

1. Breaks and Lunches: If your contact center operates for 8 hours a day and agents take 1 hour breaks (including lunch), the shrinkage due to breaks would be 12.5%: (1/8) x 100. 

2. Training Sessions: If you have your agents spending 2 hours per week in training sessions, and the center is open 40 hours per week, the shrinkage due to training would be 5%: (2/40) x 100. 

3. Meetings: If your agents attend 30 min daily staff meetings and work 5 days a week, the shrinkage due to meetings would be 6.25%: ((.5 x 5 days)/40 hrs) x 100. 

Note that some shrinkage will be due to unplanned activities such as agents calling out sick, or simply not showing up to work. This can range from 5% to 10% 

Combined, this would add up to total shrinkage of about 30%. 

So, what can we do to improve shrinkage?  

• Effective Scheduling: Use workforce management to create schedules that balance productive and non-productive time efficiently. 

• Training Optimization: Conduct training sessions during off-peak hours to minimize impact on customer service. 

• Targeted Training: Focus training sessions to specific groups of agents based on performance metrics captured from quality management. 

• Break Management: Implement staggered breaks to ensure continuous coverage. 

• Meeting Efficiency: Schedule shorter, more focused meetings to reduce downtime. 

Implementing these strategies using WEM can lead to significant improvements in contact center efficiency. While the exact percentage improvement can vary based on the specific circumstances and the effectiveness of the implementation, a conservative percentage point improvement range to expect is between 2% to 5%. 

Final thoughts on contact center shrinkage 

Understanding and managing shrinkage is essential for contact centers aiming to optimize their operations and deliver exceptional customer service. By calculating shrinkage accurately and implementing strategies to minimize it, contact centers can enhance productivity, reduce costs, and improve both customer and employee satisfaction. 

Ready to turn shrinkage metrics into measurable gains? Explore how much you could save with the Five9 WEM Savings Calculator—and start optimizing today.