Shrinkage is a forecast, not a number

Free visual lesson · about 5 minutes · short quiz at the end

ccPlanning academy · forecasting

Shrinkage is a forecast

Not a single number you inherit and freeze.

The big idea

One number all year is a planning error.

Shrinkage is the share of paid time not available to handle contacts. Most plans apply one figure — say 30% — to every week. But shrinkage swings, and applying the average to a high-shrinkage week under-staffs it badly.

Why it’s dangerous

It sits at the very end.

Shrinkage grosses up the requirement at the final step. Whatever error is in it flows straight through to headcount — after volume, after AHT, with nothing downstream to absorb it.

Split it · part 1

Planned shrinkage.

Holidays, training, team meetings, coaching, project time. You largely control when these happen — and you can schedule them away from your busiest weeks instead of letting them land randomly.

Split it · part 2

Unplanned shrinkage.

Sickness, no-shows, unexpected attrition. You can’t schedule it, but you can forecast it — it has its own seasonality. Winter sickness, summer leave, Monday absence. Pattern, not surprise.

How to do it

Forecast shrinkage by period.

Build it up from its components, project each forward (holidays from the leave plan, sickness from seasonal history), and produce a shrinkage figure per week — higher in leave-heavy and flu season, lower elsewhere.

The optimism trap

Don’t forecast the shrinkage you wish you had.

It’s tempting to plan on the target sickness rate, not the real one. Optimistic shrinkage looks efficient on paper and under-staffs you in practice — every single week it’s wrong.

See the swing

The same average, two very different weeks

Suppose the base workload needs 100 productive heads. At a 30% shrinkage assumption you roster about 143. But a leave-heavy August week might really run at 42% — that same workload needs about 172.

Apply your flat 30% to that week and you’re ~29 heads short, every day, while the volume forecast sits there looking perfect.

The takeaway

Split it, pattern it, forecast it by week.

Planned vs unplanned, built from components, projected by period — and honest about the real rate. Shrinkage is the last thing the requirement touches, so it’s the last place you want a lazy number.

Now test yourself ↓

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Slides done? Here’s the same idea in a bit more depth — the part worth keeping.

In depth: the last number is the riskiest number

Shrinkage is the share of paid time that isn’t available to handle contacts — leave, training, sickness, breaks, meetings, coaching, the lot. It’s the final operation in the staffing sum: you work out the workload from volume and AHT, then gross it up to cover all that lost time. Because it sits at the very end, with nothing downstream to absorb it, an error in shrinkage doesn’t soften — it passes straight through to the number of people you ask for. That’s what makes one inherited percentage, applied flat across the year, quietly the most expensive shortcut in the plan.

Split it into two very different things

Planned shrinkage — holidays, training, team meetings, project time — is largely yours to control. You decide when it lands, which means you can steer it away from your busiest weeks instead of letting it fall randomly across the year. Unplanned shrinkage — sickness, no-shows, sudden attrition — you can’t schedule, but you can absolutely forecast, because it has its own seasonality: winter sickness, summer leave, the Monday absence bump. Treating it as an unpredictable surprise is a choice, not a fact.

Build it up, by period, honestly

The discipline is to construct shrinkage from its components and project each one forward — holidays from the leave plan, sickness from seasonal history — to produce a figure per week rather than one number for the year. Higher in leave-heavy and flu season, lower in the quiet months. And forecast the shrinkage you actually have, not the one you wish you had: planning on the target sickness rate instead of the real one looks efficient on the spreadsheet and under-staffs you in the room, every week it’s wrong.

The principle to remember: split it, pattern it, and forecast it by period — honestly. Shrinkage is the last thing the requirement touches, so it’s the last place you want a lazy number.

Shrinkage is a forecast, not a number