In retail, the term "shrinkage" euphemistically refers tostock which "disappears" before it can be sold.  It is product that theretailer bought, but can't sell because it is has been stolen or lost.  Inthe call center, the inventory is labor and shrinkage is agents who are beingpaid but not working.  This occurs when agents are not at their stations,not logged in, not "in rotation," or employ some trick to block calls.  Three metrics help track, explain, and understandagent shrinkage:

Adherence measures the time agents are scheduledcompared to the time they actually work (logged in time divided by scheduledtime).  Since schedules are developed to match traffic projections, whenthe schedule is not fully followed, the result is understaffing.  Ideally,staff should adhere 100% to their schedules; in reality, this is not the case.  Most call center managers are shocked todiscover their adherence rates.  It can represent a huge unnecessary cost,as well as contribute to lower service levels.

Several factors account for low adherence levels.  Thefirst is scheduled breaks, lunches, and training.  This is the onlyacceptable contributor to adherence discrepancy.  Depending on the lengthof breaks, the best resulting adherence will be around 90%.  The second consideration is absences, latearrivals, and early departures.  The third area is unscheduled breaks ordistractions that cause agents to leave their positions.  It is notuncommon for call centers to have adherence rates around 75%, although well-runoperations will be in the low 90s.

Availability measures how much of that time agentsare ready, or "available," to answer calls.  It is calculated by dividing timeavailable (also called "on time," "in rotation," or "ready") by loggedin time.  Agent availability is strictly within the control of agents, determinedby their willingness to be ready to answer calls.  Although the ideal goalof 100% availability is achievable, 98% to 99% is more realistic.

Occupancy is the percentage of time agents spendtalking to callers compared to the time they are turned on or available (talktime plus wrap-up time divided by agent "on" time).  One hundred percentoccupancy means agents are talking to callers the entire time they are loggedin.  To achieve this, calls must continuously be in queue.  The resultingefficiency is great, but caller wait time can be lengthy.  Therefore, 100%occupancy does not produce quality service, plus leads to agent burnout andfatigue.

Interestingly, ideal occupancy rates vary greatly with thesize of the call center.  Smaller centers can only achieve a low occupancyrate (perhaps around 25%) while maintaining an acceptable service level. Conversely, large call centers can realize a much higher occupancy rate (90%and higher) and reach that same service level.

Call centers with poor adherence, availability, andoccupancy rates can literally spend twice as much in labor to produce the sameservice level as a comparably sized well-run call center.  Calculate your center's adherence, availability, and occupancy numbers– and then take steps to improve them.  Don'tlet agent shrinkage lead to profitability shrinkage!