Where Is Your Contact Centre Spend Going?

As workforce management calculates the number of staff required to support a contact centre, they have to look at 4 critical factors.

The first is the full-time employees (FTE) required to do the actual work. In a perfect world, this would be your final number. However, that number has to be grossed up, significantly, to get to the total number of heads you actually have to employ to effectively run a contact centre. The other factors that cause this number to balloon are: Lost time, Shrinkage, and Idle Time. In some contact centres, the FTE required for the actual work is only 50% of the employees being paid!

Let’s take a look at those other factors one by one…

Lost Time:

Lost time is the time that employees are being paid, but the time isn’t worked or tracked. An example of this is where employees log into a phone system, but are paid through a separate payroll system. Another example is time not worked during the shift (e.g. an employee logs out for 10 minutes and no exception is put into the system).

Most companies report shrinkage based on exceptions into the workforce management (WFM) system. When you see a schedule adherence number of 90%, did the employee work 100% of their schedule, but only 90% of it at the right time? Or did they only work 90% of their schedule? This gap needs to be recorded as part of lost time.

These gaps can be addressed in a few ways. First, tie together your WFM system and your payroll system. If payroll is driven from actual work scheduled and worked, this gap becomes much smaller. Also, report on the % of schedule worked, not just schedule adherence. Often schedule adherence is seen as “big brother” and not addressed as it should be. But when you pay time not worked, this has a direct impact on the financials and customer service.


Most contact centres track shrinkage, which is the time you pay agents to not be in direct production. Some examples of shrinkage are training, meeting, coaching, sick, and vacation time. The amount of time agents spend in shrinkage is generally between 25% and 35% of their work week.

So how is shrinkage measured?

Shrinkage is generally measured using exception codes from your WFM system. Each reason for an agent to be off the phone is assigned a particular code. This coding allows the WFM and operations teams to do an analysis of the reasons why people are off the phones. It’s a critical component to forecasting the ongoing FTE required as well.

How should you analyse shrinkage?

Because most operations have dozens of exception codes, it’s best to categorise shrinkage into buckets to assess. When creating these buckets, you want to put together logical groupings to help manage. For example, many contact centres will have 3 large buckets: Discretionary, Non-discretionary and Value-draining.

Let’s look at each of these:



Discretionary shrinkage represents time that employees are not in direct production as a result of management or business practices. This may be investment or enrichment time (coaching, training), or offline work time (e.g. special projects, admin). The business needs to decide just how much time it can afford to have in this bucket. This time can be throttled up or down based on how the company is doing financially or based on how the service levels are performing. This is an important lever in managing the operations.


Non-discretionary shrinkage is time that management has little or no control over. Examples of this are paid time off (usually this is a corporate policy), sick time, or any government regulations that require agents to be out of production. Non-discretionary is often a “cost of doing business”. This time needs to be planned for in the forecast in the baseline.


Value-draining shrinkage is time that has little or no value. This bucket contains pretty much anything not covered in the first two buckets. A great example of this is systems’ outage time – your computer or phone system isn’t working. Another example is “lost time”, which is time that isn’t tracked. This should be an area of focus for operations. It generally runs 2%-4% in a typical call centre.

Idle Time

The last factor that drives staffing is Idle Time.

Idle time is available time when agents are on the phone, ready for calls, but not occupied. The metric used to measure this is Occupancy, which is the inverse of Idle Time. If you have 80% occupancy in your contact centre, it means you have a 20% Idle Time. Some of the key factors that drive down Occupancy are: Service Level Targets (e.g. 80/20), Inflexible Workforce (employees can’t be moved as the demand changes), Schedule Constraint (inability to schedule the employees efficiently), and Ineffective Scheduling (not measuring and managing the WFM system’s effectiveness).

For all of these measures, it’s important to benchmark your performance as well as that of the industry and set targets to improve them. Even a factor that seems like a hard constraint such as service level should be looked at. Changes in service level can have a dramatic impact on cost, for better or worse. Take a look at how service levels correlate with customer satisfaction. You may find you’re over-servicing.

So where does that leave us?

The actual cost to staff a contact centre is driven by several manageable factors. Each of these can be actively measured and managed. Ensure you are actively setting targets for each of these, and that you understand the downstream impact these have on other areas of the organisation. All of these can be quantified so you understand the dollar value of a change versus any other impacts a change may have. You likely have several points of productivity, and therefore financial savings, just sitting there waiting for you!

With thanks to Charles Watson at injixo

Published On: 10th Jun 2016 - Last modified: 22nd Mar 2017
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