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How to calculate call center utilization rates

Customer service leaders use metrics like call center utilization rates to track performance and CX. Leadership must learn the effects of these rates and how to calculate them.

Customers who reach out to customer service departments expect agents to solve their problems quickly and efficiently, but that depends on call center utilization rates.

Call center utilization rate is one of many call center metrics -- including service level, quality, adherence, net promoter score, etc. -- that offer insight into how call centers operate and the effect on both customer and employee experiences. These rates measure agent productivity, which ultimately affects overall CX. Call center leadership must observe utilization rates and ensure agents don't overwork -- or underwork -- and have the proper amount of time for trainings.

The call center utilization rate measures agents' availability to handle customer interactions. The components of this metric highlight the critical balance between having agents available to answer customer calls and the requirements for nonphone activities for agents.

Before learning how to calculate these rates, call center leaders must understand agent utilization and how it can affect businesses.

How call center agent utilization affects businesses

Customer service leaders should look at utilization rate as a measure of productivity for both agents and the entire call center. A combination of factors drives utilization rates, including the following:

  • Corporate policy, such as paid time off (PTO) allowance, breaks, etc.
  • Management discretion, including trainings, team meetings, etc.
  • Agents, such as if they take unscheduled breaks, etc.

Utilization directly affects many factors in the call center, like scheduling efficiency, forecasting accuracy, CX and cost. Call center leaders can use this metric to calculate staffing requirements to meet their target service level. Lack of a realistic target and accurate measurement or reporting of utilization rates can negatively affect both customer and agent experiences.

Call center leadership must manage utilization rates and ensure agents are not overworking and getting burned out, which can lead to turnover, underworking and wasting corporate resources.

How to calculate a call center utilization rate

The call center utilization rate represents, for all the hours that agents get paid, the percent of that time they interact or are available to interact with callers.

Here is the formula to calculate agent utilization:

(Total login time / Total paid time) x 100 = Utilization rate

Here is an example of how to calculate the utilization rate using real-world numbers:

(350 minutes total login time / 480 minutes total paid time) x 100 = 73% utilization rate

Call center leaders should understand the details of both components in this calculation and understand what is not included in each one: total login time and total paid time.

Total login time includes the following items:

  • Time spent talking with customers.
  • After-call work time.
  • Available time, or the time agents wait to answer a call.

Total paid time is the time that agents get paid for. This component doesn't include unpaid lunchtime.

A common target for a utilization rate is between 75% and 85%. However, this target varies depending on the call center's goals.

A common target for a utilization rate is between 75% and 85%. However, this target varies depending on the call center's goals. If leadership wants to offer agents extensive time for training, knowledge sharing and team-building activities, then they must lower the utilization target to give agents this time.

If a call center's utilization is over 85%, this indicates that agents stay logged in for longer periods of time, which can lead to frustration and poor customer service.

Even with multiple formulas, this calculation still leaves out some factors. Those are the following:

  • Organizational policies or those mandated by labor laws, including PTO and breaks.
  • Organizational leadership, including training, team meetings, coaching sessions, etc.
  • Agent behavior, including unscheduled breaks, etc.

If a company has a PTO policy where agents, on average, receive 15 days of PTO and state law requires them to have two 15-minute breaks daily, that accounts for 12% of nonutilized time. That percentage breaks down as follows:

  • PTO: 6% = 15 PTO days / 260 workdays.
  • Daily breaks: 6% = 30 minutes of breaks per day / 480 minutes worked per day.

Next, many activities that train and coach agents also take them away from the phone. Call center leaders commonly struggle to measure and report on nonphone activities. However, they can begin to track this time if their call center platform uses status codes to capture agents' various nonphone activities.

If agents are presumably off the phones for these activities for two hours per week, that is another 5% reduction in utilization rate. Already, this is an 83% utilization rate.

Difference between occupancy and utilization

Often, call center leaders use utilization and occupancy interchangeably or focus on one over the other. However, they should define, measure, manage and report both metrics, as well as understand their differences.

Utilization focuses on total login time and total paid time. Occupancy focuses on the relationship between total handle time and total login time to measure how busy an agent is answering calls.

Here is the formula to calculate occupancy:

(Total contact handling time / Total login time) x 100 = Occupancy

Again, call center leaders should understand the details of both factors in this calculation. Total login time is documented above, and total contact handling time includes time spent talking with customers and after-call work time.

Occupancy measures scheduling efficiency and can help balance service-level goals and agent burnout. If occupancy is too high, agents likely handle back-to-back phone calls with little or no break. If occupancy levels are too low, agents may sit twiddling their thumbs and waiting for the next phone call.

Like utilization, call center leaders should understand where to set occupancy targets and measurements. The following considerations can affect occupancy:

  • Size of center. Smaller call centers typically see a lower level of occupancy, while larger call centers see a higher level of occupancy.
  • Type of center. Different types of call centers may have different handling times. For example, some types of contact may take longer, including claims within an insurance company and reservations in hospitality. A shorter contact might include paying a bill with a utility company.
  • Type of shift. If a call center runs multiple shifts or offers 24/7 customer service, each shift has varying levels of occupancy.
  • Service-level goal. Service level and occupancy have an inverse relationship. The higher the service-level goal, the lower the occupancy.

When occupancy levels exceed between 88% and 92% consistently, agent burnout is likely to occur, and call queues may be long.

The role of BPO in call centers

Business process outsourcing (BPO) plays a significant role in supplementing staffing requirements and improving call center utilization rates.

BPO often produces higher utilization rates because specific corporate initiatives that take in-house agents off the phone don't always apply to an outsourced staff. A call center may embrace BPO for additional staff when an influx of call volume occurs -- for example, during a specific season, when a new product launches, etc.

Call centers can also embrace BPO when agent utilization and occupancy are low, like during overnight hours for the in-house staff.

How visual tools help improve training

The time allocated to agent training can improve utilization rates. Flexible workflow systems and effective knowledge management systems can reduce agents' training time.

Often, training forces agents off the phone so they can learn new workflows and procedures, which they must memorize and perform manually. Leaders can use workflow management systems to automate processes and handoffs so agents do not need to learn all the specific tasks required for a transaction.

Knowledge management systems offer easy access to information, along with recommendations on the best next step to complete an interaction. Visual assistance tools offer pictures, videos and quick knowledge links to assist agents with customer interactions and answer questions efficiently.

For example, an agent can share a knowledge base article with visuals to a customer. Visuals can help agents enable customers to understand where to locate information on their devices. Agents can receive this knowledge and improve their skills through formal and informal training, which decreases training time and increases knowledge retention.

Customers want to be able to reach a knowledgeable agent who can resolve their issues in a timely manner. Only by understanding and managing the call center utilization rate can customer service teams effectively accomplish this goal.

Editor's note: This article was originally written by Fancy Mills and expanded by Scott Sachs.

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