15 + 15 = 26? LEARNING TO LOVE CALL CENTER MATH

By Bob Cecchini
Senior Consultant

No, it is not a misprint. It’s call center math, and if you’re interested in reducing the cost of running your call center, it is math you need to understand. The basic principle behind this strange math is that if you combine two small call centers into one larger one, you could handle the combined call volume at the same service level using less staff. It is called the pooling principle. Here’s a simple example to illustrate the point.

The first call center receives 65 calls per half hour, and the second call center receives exactly twice as many. The handle times and service levels are the same. If you had two call centers, each receiving 65 calls per half hour, you would need 30 full-time equivalent (FTE) staff—but if you combined them into one larger call center, you could handle the same call volume with only 26 FTEs. That’s a 13 percent savings in staffing cost.

The potential cost savings are even greater with smaller call centers, especially if you can consolidate several of them. In the example above, if there were three small call centers, you’d need 45 FTEs, but if the calls were pooled into one larger center, you’d need only 38 FTEs. The savings would be increased to 16 percent. If the small call center took only 40 calls, you’d need 10 FTEs. And if you consolidated three of them, you’d need 24 FTEs instead of 30, a savings of 20 percent.

In the table, you can see that staff productivity improves from 4.3 calls per half hour to 5.0 and that occupancy increases from 72 percent to 83 percent. For those of you unfamiliar with occupancy, it’s the time spent handling calls as a percentage of total time available to handle calls. So, at 72 percent occupancy, the staff spends 28 percent of their time in available mode waiting for calls to arrive.

As you consolidate small call centers into larger ones, the occupancy increases and you need to be careful. If occupancy gets too high, agent stress increases. Sustained periods of high occupancy will result in agent burn-out and increased turnover. Even minor turnover increases will likely negate any consolidation benefits. Typically, you want to keep occupancy below 85 percent.

In fact, if you are running an extremely large call center with occupancy that’s consistently in the upper 80s, you may be able to reduce turnover by splitting it into two or three smaller ones to get the occupancy below 85 percent. So, if you are responsible for two or more small call centers, you now know the upside of consolidating them. The downside normally involves training staff on new systems, products, or call types, but sometimes it’s as simple as removing arbitrary geographical boundaries that separate the smaller call centers.

If you don’t have the tools to do the call center calculations above, please contact us. We’ll be able to give you an analysis in just a few minutes.