Call Center Shrinkage Hints, Tips & Best Practices
Every week, new contact center managers and agents discover this blog for the first time. We think that’s a good reason to occasionally go back to the basics, and explore the ways in which a quality workforce management solution (like Monet WFM Live) should be utilized. This is technology that can really make a difference in how you serve your customers.
Follow these guidelines to make the most of a WFM solution:
• Given the attrition rates at contact centers, require ongoing WFM training to avoid knowledge erosion
• Refine your data gathering processes regularly to make sure the numbers are accurate
• Monitor shrinkage and balance it correctly into forecasts
• Set realistic adherence targets, and apply real-time calculations to achieving them
• Make sure intra-day forecasting is consistent
• Let the system manage holiday and shift swaps, so managers can focus on other tasks
• Daily forecasts will usually be top priority, but do not ignore midrange and long-term calculations that can be important to future planning.
• Invite agents to input schedule and vacation requests directly into the system
While Workforce Management can make a difference simply through the data it delivers and processes it expedites, it’s a tool that will ultimately be successful depending on the environment in which it is used.
Thus, managers are also urged to always treat agents fairly. For example, do not give preferential treatment on first choice of shifts, unless this perk is offered as a bonus for outstanding performance. Make sure contact center policies on this and other rules are clearly communicated so agents know what to expect.
When you know what to look for, when you have the information you need, when you need it, and when you can act upon it quickly, that’s workforce management made easy.
You may have seen the news earlier this month: AT&T Inc. has agreed to pay a $25 million settlement following the discovery of a data breach at their call centers in Mexico, Colombia and the Philippines. It happened because employees at these call centers accepted illegal payments to share the private information of the company’s customers. About 280,000 people were affected.
This case raises awareness that contact centers play a central part in dealing with customers in case of a cyberattack. They are the first point of human contact. Everyone can remember the large scale attacks that hit Target stores in 2015 or the Sony PlayStation Network in 2011. Millions users were affected, millions of credit card numbers leaked. This is a stressful situation for the customers and it can affect the company’s reputation dramatically.
Just like any other businesses, call centers have to be prepared and proactive to deal with the aftermath of a cyberattack targeting the company.
It becomes essential that shrinkage is taken into account, in order to handle an unexpected spike of calls, agents are trained, available, and scripts with an emergency procedure are ready.
How should you prepare your contact center?
Most companies devote just 2-4% of their IT budget to security and disaster recovery planning. And yet, the actions taken before a cyber attack are as significant, if not more so, than actions taken after the worst has become reality.
Some companies specialize in disaster preparation. They can help implement a strategy to fit a contact center’s needs, likely threats and budget. Many of these companies may begin with a business impact analysis, to assess the potential loss (whether financial, technical or in human resources) from a cyber attack.
It’s also a good idea to put together an issue response team ahead of time, so you will have the right people in place if an attack should occur.
What to Do After?
A cyber attack is not the same as other unforeseen activities that could not be anticipated with forecasting and scheduling. This is a situation where customers are directly and negatively affected by what has occurred, and may even incur financial loss as a result. Some will be angry. Some will be frightened. And most of them will be calling you as soon as the news of the attack is made public.
Because data breaches are now, unfortunately, an ongoing threat in 21st century business, most customers will understand that these incidents are not always avoidable. That means it’s no longer an automatic deal-breaker for that business relationship – but a lot will depend on how the company responds. For the contact center, that means focusing on 4 words: Communicate, Respond, Explain, and Apologize.
Let customers know as soon as possible that an attack has occurred. Don’t wait for them to call you. This will be the first step in rebuilding any trust that has been lost. The faster they are aware of what has happened, the faster they can contact their bank or credit card company and take steps to protect themselves. The companies that lose the most customers from a cyber attack are those that wait weeks (or even months) before going public.
Customers will have questions. Have your best agents in place – those that have shown via quality reviews and coaching that they know how to remain calm when speaking with someone who is upset. Make sure these agents have the answers ready to the questions that are always asked following an attack (“What happened?” “How will this affect me?” “Do I need to call my bank?”).
Cyber attacks are highly technical in execution, but customers will not be interested in explanations that they cannot understand. Agents should be able to explain in plain English what has happened, why it happened, and what steps the company is taking to control the damage, and make sure the customer is inconvenienced as little as possible. Also, tell them what steps are now being taken to make sure their information will be safer in the future.
This is where agent training should begin when preparing for the aftermath of an attack. The apology should happen near the beginning of the call, and again at the end. It will go a long way toward maintaining a customer’s confidence.
Bonus Step: Stay in Touch
Customers will expect a company to be reluctant to talk about a cyber attack, so they will appreciate if the company takes the initiative in keeping customers apprised of what is happening. Whether it’s a phone call from the contact center updating them on the situation, or an apology email from the company CEO, or some other means of following up, it demonstrates ongoing concern for the customer’s welfare and interest in keeping their business.
With cyber attacks in the news almost every week, companies can no longer assume they will be the exception and never have to worry about the fallout from such a damaging incident. However, few companies have devoted sufficient time to advance preparation, and a recent Ponemon study found that companies were also not prepared to communicate with customers following a data breach; in fact, of more than 470 surveyed, just 21% had a trained communications team in place.
For contact centers, where communication is the first and most important skill considered for agent hires, that percentage will not do. This is the moment when agents should be called upon to use their skills to address customer concerns and restore confidence and loyalty.
Ponemon study referenced in article: http://www.corpcounsel.com/id=1202598001685?slreturn=20150320141052
“Is it in the budget?”
Some variation of that question is always asked when any changes to contact center procedures are proposed. And it’s a valid question. Economic realities have forced businesses of all kinds to do more with less, and contact centers are no exception.
But there comes a point when inaction can be more costly than a beneficial investment. And when it comes to the use of spreadsheets vs. workforce management software, that time has come.
Yet many small and midsized contact centers still rely on spreadsheets for daily forecasting and scheduling. Even larger contact centers, those with 100 agents or more, are still making due with an inefficient system that lowers customer service, and can actually increase costs.
When an increase as low as 1% in productivity can significantly impact the contact center budget, it is imperative to identify areas where efficiency can be improved. Ditching spreadsheets should be at the top of that list.
Spending Money to Save Money
The limitations of a spreadsheet result in fixed schedules that can produce higher shrinkage and overstaffing, or understaffing and a low service level. But with WFM it is easier to manage start times, end times and breaks with an ease of flexibility that dramatically improves service levels.
Managers can also consult more detailed and accurate call histories with WFM, resulting in better forecasts. Scheduling is also faster – some managers can save as much as 25% of the time once devoted to filling in spreadsheets – time that can now be used for additional agent training or to attend to other matters.
Is increased efficiency worth the investment? One of our clients, the Texas credit union GECU, found out first-hand. Their call center, staffed by 85 agents, selected Monet’s cloud-based WFM Live as a way to improve customer service. Affordability was a key component in the decision, as WFM Live provides such benefits as reduced IT investment, low implementation service fees and a more cost-effective per-user license model.
Just a few months after implementation, GECU was able to save money by reducing its number of agents by 14, while delivering better customer service. With the more accurate scheduling made possible by WFM Live, there was a 30% reduction in unscheduled breaks. Costly overtime scheduling was reduced, while call volume spikes were managed more easily.
“In terms of ROI, Monet has already paid for itself after a few months. The cost of the 3 year subscription I've already saved in salaries, overtime and administrative costs.”
--Joshua Gomez, GECU Assistant Vice-President, Call Center
Today, the quality and service levels at GECU are solidly placed in the top 97% tier.
The Better Solution for Managers, Agents and Your Customers
A spreadsheet can be used to calculate workforce percentages, but precise forecasting requires more in-depth analysis. And when forecasts are wrong, stressed agents cannot deliver the service level you and your customers expect – or, they’re sitting in their cubicles with nothing to do, and earning money for it.
One of the reasons we hear most often from companies reluctant to change is, “But this is the way we’ve been doing it for 10 years.” Change can indeed be intimidating. What we tell them is they are not really changing the things they do – they are just going to be able to do them more easily and efficiently.
Forecasts rely heavily on historical data – daily, weekly, monthly, seasonal – to determine call volume. Contact center managers may start with monthly and weekly stats, and then delve deeper into daily and hourly numbers, perhaps even examining work periods as short as 15 minutes.
This can be done with spreadsheets, theoretically, but with WFM it is significantly easier to analyze call types, call volume and call patterns, and then to note past variations, determine their cause, and forecast accordingly. With WFM it is also much easier to forecast special days or other events that impact call volume. “Special day” provisions can be created for any factor, from marketing campaigns or events to weather patterns.
Scheduling is yet another area where WFM offers enhanced capabilities. Spreadsheets can handle fixed schedules, but in 2015 how often do contact center schedules stay fixed?
With a WFM system managers have the flexibility to automatically manage start times, end times and break times. Now, agents can work the hours that work best for them, and happier agents are far more likely to excel at customer service. They are also more likely to stay with the company longer, a consideration that should not be minimized considering the average employee turnover rate in this industry.
Intra-day adherence tracking is another significant component of a best practices approach that is practically impossible with just a spreadsheet. WFM also provides insight, through dashboards and real-time alerts, into which agents are meeting their schedule obligations, and which may require additional guidance or training.
The annual budgeting process presents a familiar challenge – cut costs where necessary while maintaining (or improving) the customer experience. Since labor forces rank among the highest cost items, it is essential that they be managed properly. With WFM, a manager can always be confident that he or she is scheduling the right agents with the right skills at the right time.
Those still using spreadsheets for these functions are missing out on the convenience, efficiency, flexibility and functionality of workforce management.
The calculations necessary for optimal forecasts and schedules are very difficult to do with Excel. WFM has sophisticated simulation processes that tell a call center how many people it will need and when it will need them.
“But we can’t afford it.” That might have true ten years ago, but today with cloud-based WFM, even smaller and medium-sized contact centers can reap the benefits of automated workforce management at an affordable cost. A lower investment also means a more rapid return on that investment.
When call volume changes, spreadsheets are insufficient. With WFM, managers can get back to managing people, instead of spending hours on Excel planning forecasts and schedules. To learn more about this, download our whitepaper "The Real Cost of Spreadsheet-based Scheduling".
What is call center shrinkage?
One of the most important concepts in schedule adherence is shrinkage.
Shrinkage can be defined as the time for which people are paid during
which they are not available to handle calls.
There are many reasons that can cause shrinkage - and it has to be taken
into account when scheduling the required number of agents to meet call
volumes. But the truth is that most companies badly under-estimate the
sheer volume of shrinkage that besets their call centers. This comes
about due to a host of potentially hidden areas of shrinkage. Many
managers keep their eye on several of these, but few are able to stay on
top of all of them: lateness, talking to associates, personal calls and
emergencies, leaving early and taking longer breaks. The bottom line on
shrinkage is the amount of minutes per day that agents are being paid
to be on the phone when they are not actually working or available to
receive calls or work on customer related issues.
How to track and manage shrinkage?
Shrinkage can be a major factor in failing to meet service level
targets. Call centers that take shrinkage parameters into account in
their forecasting and scheduling typically achieve higher service levels
at lower operating costs. They often do that by including all call
related activities into the forecast and schedule planning process. Here
is an example of how to track and manage shrinkage as part of the
workforce scheduling process:
For more information about shrinkage, please also read the following two blog posts:
In addition, you can download our whitepaper about tracking and improving schedule adherence - it should provide some valuable insights into the relationship between shrinkage and agent adherence.
Shrinkage is the time (or percentage of time) agents are not productive due to breaks, meetings, training, vacation, illness, absenteeism, etc. Most of these events can be build into the schedule, however there is one aspect of shrinkage that cannot be really planned for and it is related to adherence. Adherence is a measurement of the time agents are scheduled to work compared to the time they actually work. If agents leave early, start later or take longer breaks than specified in their schedule, it causes shrinkage that has an immediate impact on service levels and other call center metrics due to under-staffing.
How to reduce shrinkage?
Well, it's not realistic to totally eliminate "unplanned" shrinkage, however, in most cases in can be reduced to an acceptable level. One major reason for "unplanned" shrinkage is out-of-adherence. Often, call centers don’t have the necessary visibility into what happens at any moment in time and what is supposed to happen based on the published schedule. If you are still struggling with adherence issues, please read this educational whitepaper “Strategies for improving call center schedule adherence", and you will learn about proven practices on schedule adherence that have resulted in increased availability and reduced shrinkage.
The increasing complexity of call center configurations with multiple locations, many time zones, more demanding customer interactions, and new communication channels make it more difficult to manage shrinkage. You cannot any longer manage the shrinkage in today’s complex centers just by standing up and looking out across your center or using a manual/spreadsheet based approach. Here are some of the challenges centers need to overcome:
- Distributed call centers and home agents make it more difficult to manage and track breaks, attendance, exceptions, etc.
- Multiple communication channels (phone, email, chat, social media, etc.) make it more difficult to manage shrinkage without appropriate tools to forecast, schedule and track adherence for each channel.
- Some call centers have no effective way to forecast and schedule non-call activities such as breaks, meetings, unplanned discussions – resulting in shrinkage.
Therefore, shrinkage becomes more of an issue for call centers that don’t leverage WFM solutions. Usually, they don’t have the necessary visibility into what happens at any moment in time and what is supposed to happen based on the published schedule. Learn more about how to reduce shrinkage by watching the on demand webinar "Strategies for improved call center schedule adherence". In this educational webinar, industry expert Penny Reynolds from the The Call Center School, shares proven practices on schedule adherence that have resulted in increased availability and reduced shrinkage.
Many companies underestimate the sheer volume of shrinkage. Here are two suggestions on how to reduce shrinkage:
1. Increase forecast and schedule accuracy by including all activities into your schedule:
- Call time and after work related to calls
- Outbound if triggered by inbound calls
- Chat (if important to your business)
- Breaks, lunch
- Admin or research work
- Outbound calls
- Other unproductive time
2. Monitor schedule adherence and work with your agents to improve over time
- Monitor in real-time
- Run reports and share with the call center team
Many companies underestimate the sheer volume of shrinkage (paid time but not taking calls). For example, in a 30 agent contact center 20 minutes of out of adherence status 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, you would be losing $150 per day, $750 a week or $39,000 per year.
While it is not possible to recover all lost time, imagine 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.
How can you reduce shrinkage? There are three key elements involved:
- Create a better match to call volume with agents’ availability;
- Increase forecast and schedule accuracy by including additional parameters;
- Monitor and improve schedule adherence, if possible in real-time.
Many centers underestimate the sheer volume of shrinkage (paid time but not taking calls). For example, in a 30 agent contact center 20 minutes of out of adherence status 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, you would be losing $150 per day, $750 a week or $39,000 per year. While it is not possible to recover all lost time, imagine 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. How can you reduce shrinkage? There are three key elements involved:
- Create a better match of actual call volume with agents’ availability
- Optimize schedule by including all relevant parameters such as breaks, training, etc.
- Improve schedule adherence by educating your agents, monitoring performance and providing incentives.