What is Shrinkage in bpo

Shrinkage Formula in bpoShrinkage is an estimation of anything that removes an agent from their duty in terms of working in the call centre. Various elective definitions are broadly similar in concept. Let us talk about one of many alternative ways here.

What is Shrinkage formula
What is the Shrinkage formula?

Shrinkage is the thing that takes agents away from their productive hours.
2). Shrinkage is a kind of loss to the call centre.

Now let us learn here first and get to know what kind of shrinkage are there in call centres or we can say how many types of shrinkage are there in the call centres.

1). Internal Shrinkage

2). External Shrinkage

Question: What is Internal Shrinkage?

Answer: let us check all the types of Shrinkage mentioned below.

1). Team Meeting

2). One to ones

3). Unplanned Leaves

4). Training

5). System Downtime

Let us read about them in detail below with complete definitions.

Team Meetings – These happen in the call centre when TL (Team Leader) OR Supervisor spends time in taking a team meeting to discuss the assigned target like how to achieve it and a feedback sharing of any team member in the meeting.

One-to-one – it happens when a TL(Team Leader) takes a session with any team member is a person in the office, in this session, TL talks about the agent’s work performance, breaks and etc.

Unplanned Breaks - Unplanned breaks mean that any agent takes unplanned breaks that mean the break he or she takes is not permitted by his or her TL like smoking or having tea or coffee etc.

Training – Training is also a part of shrinkage when TL or manager takes a meeting for a team that, time gets spent is called shrinkage.

System Downtime – System downtime is the thing that happens in the call centre like the internet not working or maybe system or other technical issues.

Question: What is External Shrinkage?

Answer:  Let us go through these all types of external shrinkage in detail below.

1). Absenteeism

2). Holiday

3). Sickness

4). Lateness

Let us check them in detail below with a proper definition or explanation.

Absenteeism – It means if an agent is not available on the floor in the call centre during productive hours, for any reason like sick leave or any. That is called absenteeism which comes in external shrinkage in the call centres.

Holiday – Holiday is a day when a call centre provides a day when agents do not have to come to the office but if we talk about it in terms of any call centre then it also comes in the category of external shrinkage.  

Sickness – Sickness is an external shrinkage that means if an agent is taking a sick leave, Productivity might get suffered in the call centre

Lateness – If anybody comes late on the floor then of course productivity gets suffered just because of lateness which is also a part of external shrinkage.

Now we will learn here the basic thing that we are supposed to start now about shrinkage that how works in call centres.

Before we learn about it, let us check one more thing which is more important in the call centre which is AHT.

AHT- Average Handling Time

AHT Definition: It covers the whole time when the agent starts talking to customers on the phone till the call ends including talk time and holds the time that is called AHT in the call centres.

Now we will discuss here in detail how we calculate this as a function in excel or like how can we calculate in percentage?

Shrinkage Formula - It can be simply defined as the time for which people or employees are paid and they are not available to work or handle calls In any company or call centre, BPOs. It can be defined in 2 ways as Planned eventsUnplanned events. If we would like to calculate the formula in ms excel that how to find out the Shrinkage rate then we simply have to do an addition of (Planned + Unplanned) events. That is basically called Shrinkage Formula which usually has more importance in BPOs nowadays.

It is basically absenteeism which could be defined in 2 ways here.

1). Planned Events or Planned Leaves

Team meetings, Breaks (Lunch, Tea or whatever like smoking and etc.), Coaching sessions or maybe any other activity in the office during shift timing are called Planned Events. It is known as absenteeism means any agent or employee is on leave but he or she already informed about it his or her supervisor or reporting manager that he or she will not become on any particular day or any date and that is called Planned leave.  

2). Unplanned Events or Unplanned Leave
It is like if an employee or any agent is taking much n more breaks during shift timing like the total time is 1 hour that could be used in paid hours but if it goes more than that then it will hamper the productivity and is called unplanned shrinkage OR If any agent or employee does not come to office without any prior intimation then it is called Unplanned leave. 

Shrinkage formula   = (Planned Leaves + Unplanned Leaves)

Now look at here how to find out Planned & Unplanned leaves first and then we have to do an addition of both terms in Ms excel & that s all.

Planned Leaves = Planned Leaves/Total agents*100
Unplanned Leaves = Unplanned Leaves/Total agents*100

Now let us calculate it here.

For Example:-  Planned Leaves Formula
Number of agents on Planned leaves =3
Total Agents = 40
So the formula will be like as = 3/40*100
Means Planned Shrinkage =  7.5

For Example:- The unplanned Leaves Formula

Number of agents on unplanned leave = 2
Total Agents = 40
So the formula will be like as = 2/40*100
Means Unplanned Shrinkage = 5
Now we have to find out SHRINKAGE = (Planned Leaves + Unplanned Leaves)

                       Total Shrinkage rate is    = (7.5 +5) = 12.5

That s the way to calculate in Ms Excel and another source to learn is a video which is uploaded here below. Please watch and learn.