Understanding Shrinkage and Calculation

RawSummary Sheet

What is Shrinkage and how to calculate it in a BPO industry?

Shrinkage can be defined as the time for which people are paid but not available to handle calls or perform their task.  In a broader way, we can say that shrinkage is every activity that keeps an agent off the phone for a certain time or day(s). This would include his/her leaves & holidays entitlement, offline activities (training, meeting, coaching etc.), breaks, outbound calling (if any).

There are two types of shrinkage in BPO –

  • Planned Shrinkage
  • Unplanned Shrinkage

Planned Shrinkage include Week Offs and Leaves; Unplanned Shrinkage include Absenteeism and Half day in terms of headcount.

If we talk about Unplanned Shrinkage in aspect of hours, then it will be offline activities (break, meeting etc.) that has not been catered in roster.

Calculations

Shrinkage calculation for headcount

  • Shrinkage = Planned shrinkage + Unplanned Shrinkage
  • Planned Shrinkage = (No. of week-off + No. of leaves)/Total Head-count
  • Unplanned Shrinkage = {No. of absent + (Half day/2)}/ Total Roster-count
  • Total Head-count = Number of agents available in ERP
  • Total Roster-count = Total Head-count – (Planned Leave + Weekly-off)

Shrinkage calculation for hours

  • Shrinkage% = (1- (Total staffed hours/Total scheduled hours))
  • Total Staffed hours = (Total answered calls*AHT) + Avail time + productive aux
  • Total scheduled hours = Total agent hours rostered for the day/week/month

Let’s understand these calculations with example

Suppose, we have total 100 head-count in ERP; and out of 100, 12 are on weekly offs and 8 are on planned leaves, hence Planned Shrinkage head-count will be

So planned shrinkage% will be

As we have total planned shrinkage 20. Hence, total roster-count will become

Now, we have total roster-count 80 hence, we will roster all of them for 8 hours in a day.

Suppose, 8 people take full day unplanned leaves and 4 people take half-day unplanned leaves out of 80 roster-count hence, unplanned shrinkage head-count will be

So unplanned shrinkage% will be

Let assume that there is no unplanned absenteeism and all 80 staffs are present in office. At the end of the day, they delivered total 600 staffed-hours against the 640 (80 staffs x 8 hours) scheduled hours.

So, the shrinkage hours% will be

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