# LEAN & MEAN: COST REDUCTIONS STRATEGIES FOR THESE UNCERTAIN ECONOMIC TIMES by Maggie Klenke and Penny Reynolds The Call Center School

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2 35 11 sec 88% 83% As you can see, staffing with 33 bodies in chairs would enable you to meet service level fairly consistently. But the loss of one person would worsen service level from 74% to 62% (or average speed of answer from 30 seconds to 54 seconds). Eliminating another person would drop service level to 46%, and the average delay would double to 107 seconds! And reducing staffing levels by three would horribly deteriorate service level to only 24%, resulting in an average delay of 298 seconds! So those callers accustomed to waiting for only half a minute in queue would now be waiting nearly 5 minutes! And service isn t the only thing that suffers. With 33 staff in place to handle the call workload, agent occupancy (the measure of how busy staff are during the period of time they re logged in and available) is in a good range at 88%. Taking one body away raises occupancy levels to 91%; taking two away results in 94% occupancy; and taking three away means staff would be busy 97% of the time during the hour. In other words, there would be only 3% (108 seconds) of breathing room between calls. Such a high level of occupancy can t be maintained for long. The likely result will be longer handle times, longer periods spent in after-call work to catch their breath, burnout, and turnover. And there s another point to consider. The reduction in staff might be outweighed by the increased telephone costs associated with the longer delay times. In this example, with 33 staff in place the average delay is 30 seconds per call. Multiply that by 350 calls per hour and that s 10,500 seconds (or 175 minutes) of delay. If we apply a fully loaded telephone cost per minute to that usage of \$.06 per minute, that s \$10.50 for the queue time. If we try and staff with 30 staff, remember our average delay increases to 298 seconds of delay. Multiply that by 350 calls and that s 1738 minutes of delay, priced at \$.06 for a total of \$ for the queue time that hour. In other words, by eliminating three staff to save money, we ve just increased our telephone bill by \$ for that hour! And this doesn t even take into account the likelihood of a longer call given the poorer than expected service levels. Telephone charges would likely increase even further. This situation is even more dangerous in a revenue-producing center. If the value of a contact is \$50, and agent salaries are \$20 per hour, it is easy to see that putting another agent on the phone will pay for itself even if the agent only answers one call per hour that would otherwise have abandoned from the queue. But even if the value of the call is only \$5, there is clearly a trade-off in determining the staffing level that will produce the highest net bottom line. The return on appropriate staffing must be argued against budget constraints. So, from three different perspectives, you can see that a simple staff reduction may not save you any money. In fact, it may cost you more in terms of poor service, excessive occupancy levels, as well as increased telephone costs. But if not a staff cut, then where should you look for savings opportunities in your center? Copyright 2002 The Call Center School Page 2

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