Utilization Rate in the Contact Center
In this new article, I’ll discuss another KPI that helps to explain how our labor costs are impact by an agent’s effectiveness. UTILIZATION is a concept that many people misunderstand and even confuse with OCCUPANCY. If you want to learn more about this other idea, be sure to read my previous article about Occupancy.
I wrote an article on Occupancy the other day, and in it I defined it as the amount of time Agents spend handling calls including what they do after their call.
And we defined the formula as below:
Occupancy % = Total Handle time / (Total Handle time + Total Avail time )×100
In order to understand Utilization, we need to start with understanding what is the definition and calculation of it.
So, what is Utilization?
UTILIZATION is the total time spent logged in your contact center. This can be different from when you are actually in the office as employees spend a substantial amount of time on various tasks such as training or administrative work.
To calculate Utilization, we can use the below mentioned formula:
Utilization % = Total Logged-in Time /Time Total Shift or Paid Time×100
Other way to calculate your utilization is:
Utilization %= Total talk time + Total Hold Time + Total Wrap + Available Hours) / Paid Hours×100.
Utilization%= Total Billable Hours/Total Paid hours×100.
So, occupancy will only tell you how busy your agents are in a certain period of time while they are at work, which will help you determine if you have the right number of people at the right time. Utilization includes your employee’s logged-in time and reportable paid hours. You should aim for an utilizaton target between 79% and 86% – but this might depend on other company decisions, like investments in training or engagement activities.
Here some of the examples of internal shrinkage:
- Training, 1×1 Coaching or Upskilling time.
- Team Huddles Sessions
- Unplanned breaks – bathroom break
- Project time off phones
- Engagement Activities, Townhalls, Focus groups, etc.
- System issues or System downtime
On below example you will learn how to calculate the Utilization %.
- Total Logged in Time = 2,610 min
- Total Paid Time = 3,000 min
Utilization Rate % = 2,610/3,000×100= 87%
Track Utilization is very Important
It’s important to keep track of your Utilization because Utilization will help you see the percentage of time that an agent is logged in and available for assistance during any given pay cycle.
If your Utilization is on 72% that means you’re spending 72% of the time paying an agent to handle calls, which is directly linked to your financial cost. It’s important to increase Utilization as much as possible without neglecting offline activities.
You would expect that the agent you hire to take calls spends most of his or her time doing it, so if he or she hits their target for taking calls, you can better manage costs.
Utilization Target ratio
A target for utilization is a targeted ratio that tells you how much production capacity your labor should be putting towards quantities and what percentage of time the labor should be used for productive time. In other words, it will help you to analyze how much efficiency you can gain by either changing the number of staff available, or an efficient schedule of how many hours to work as employees.
Monitoring metrics like proximity, travel time, and commute duration can help your company-you’ll find that it can save you from high employee turnover or attrition.
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