Question 1

What is planned vs unplanned shrinkage?

Accepted Answer

Planned shrinkage includes scheduled activities like vacation, holidays, training, meetings, coaching, and breaks — time the business controls. Unplanned shrinkage covers sick/absent, tardiness, no-shows, and FMLA/leave — events that are harder to predict and manage.

Question 2

What is the industry average shrinkage rate?

Accepted Answer

Total shrinkage typically ranges from 28-36% depending on industry. Banking averages 34%, telecom 31%, insurance 33%, BPO 28%, and healthcare 36%. The split is roughly 60% planned and 40% unplanned.

Question 3

How do I reduce unplanned shrinkage?

Accepted Answer

Focus on the top drivers: sick/absent (attendance policies, wellness programs), tardiness (schedule flexibility, commute support), and no-shows (engagement initiatives, exit interview analysis). Track trends by team and tenure to identify systemic issues vs individual performance.

Question 4

Why does this matter for staffing?

Accepted Answer

Every 1% of shrinkage requires roughly 1% more FTE. A 200-agent centre at 30% shrinkage needs 286 FTE. If shrinkage rises to 35%, that jumps to 308 FTE — 22 additional headcount. The Deep Dive helps you identify exactly where the waste is.

Question 5

How often should I recalculate shrinkage?

Accepted Answer

Monthly at minimum. Planned shrinkage is relatively stable but unplanned fluctuates seasonally — sick rates spike in winter, no-shows increase around holidays. Quarterly deep dives against industry benchmarks keep your staffing model accurate.

Shrinkage Deep Dive

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