Shrinkage | Meaning and Definition

What is Shrinkage?

Shrinkage, as the name suggests, is simple and corresponds to the time span during which the employees or workers are paid even after they are unable to take or handle calls. Broadly speaking, the term shrinkage is defined and includes every activity that keeps an agent away from receiving calls or off the phone. The criteria of shrinkage include offline activities, holidays and leaves entitlement, outbound calling, and breaks. Once the employee gathers all the information about being away from the phone, the total time is calculated for the above-mentioned activities against the working days annually. Generally, shrinkage is considered important in those companies and organizations which have telecalling as a significant part of their business, likely Business Process Outsourcing (BPO).

How to calculate the Shrinkage percentage?

Shrinkage refers to the process of calculating the percentage of employees unavailable to handle calls during a specific span of time or a particular time or day. Shrinkage can be calculated in two ways:

  •       Planned Shrinkage
  •       Unplanned Shrinkage


Planned shrinkage consists of leaves and week-offs, whereas unplanned shrinkage consists of half-day and absenteeism.

Calculation of Shrinkage = Planned Shrinkage + Unplanned Shrinkage.

Planned Shrinkage = [Total number of leaves + Total number of week-offs] / Total headcount.

Unplanned Shrinkage = [Total number of absent + (Half-day/2)] / Total roster-count.