what is shrinkage in bpo

Shrinkage in BPO refers to the time for which agents are being paid but are not available to handle interactions. It is a workforce management metric that is important to measure because BPOs need to factor shrinkage into their forecasts to ensure they will be adequately staffed. Shrinkage can be both planned and unplanned as a result of internal and external factors. Some examples of planned shrinkage include agents being scheduled for staff meetings and trainings, while unplanned shrinkage can be due to agents calling out sick or on vacation. Shrinkage can be calculated as a percentage using the formula: Shrinkage = [(Total Hours External Shrinkage + Total Hours Internal Shrinkage) / Total Scheduled Hours] x 100. To reduce shrinkage, BPOs can use modern workforce management solutions to monitor adherence in real-time and quickly address problems that arise to get agents back on track with planned schedules.