What is shrinkage in BPO?

Quick Scoop: In BPO, shrinkage means the time employees are paid for but are not available to handle customer work, such as calls, chats, or tickets. It includes both planned time like breaks, meetings, and training, and unplanned time like sick leave, lateness, or system issues.

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Simple meaning

Think of shrinkage as the gap between the time your team is scheduled to work and the time they are actually ready to serve customers. In call centers and BPOs, it is a key workforce management metric because it affects staffing, service levels, and costs.

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Types of shrinkage

  • Planned shrinkage: breaks, lunch, coaching, training, team meetings, holidays.
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  • Unplanned shrinkage: absenteeism, sick leave, lateness, early departures, emergencies, system downtime.
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How it is calculated

A common formula is: Shrinkage % = (Non-productive time / Total scheduled or available time) × 100. Another way is to add planned and unplanned shrinkage hours, divide by total available hours, and multiply by 100.

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Example

If an agent is scheduled for 40 hours and spends 8 hours in training, breaks, and meetings, the shrinkage is 20%.

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Why it matters

High shrinkage means fewer agents are available at the desk, which can increase wait times and hurt service levels. It also helps managers forecast staffing more accurately so they do not overstaff or understaff the operation.

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Bottom line: shrinkage is a normal BPO metric, but managing it well is important for productivity and customer service.

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