Resource Calculators
Kevin Crawford
Founder/Principal @ CX COps Consulting Inc. - Ready to help your business mitigate risk, enable "sad path" recovery, and deliver awesome customer experiences!
It’s time for the second in a series of brief articles focused on Customer Experience (CX) and Customer Operations (COps) topics. If you haven’t read my first article, Own Your Data , I recommend reading that first as it segues quite well into this article.
The author of the iconic novel series, “Discworld”, Sir Terry Pratchett OBE, in his book, “I Shall Wear Midnight” wrote, “If you do not know where you come from, then you don't know where you are, and if you don't know where you are, then you don't know where you're going. And if you don't know where you're going, you're probably going wrong.” Proper resource planning requires understanding your historical metrics, your current state of resourcing, and a roadmap of future plans. While this is a requirement across the board, for the sake of this article and providing specific examples, I’ll focus on Customer Support.?
Before you can start the process, you have to ask yourself the following questions (not exhaustive):
Have your eyes glazed over yet? Still with me? I know it’s easy to get lost in the details, but as someone who obsesses over numbers and metrics due to a love of taking quantitative data and telling a qualitative story, I get giddy when sharing this topic with others. It’s absolutely possible to build a quality calculator with fewer data points, but the more data you use, the more accurate you can be. The more accurate you are, the finer you can dial in budgetary requirements and projected spend.
Once you understand your data, it’s time to put it into action. With the right data points, accurate forecasts of agent utilization and future headcount needs can be calculated, but it isn’t as black and white as the output from a well-built calculator. You have to muddle through a lot of gray as there’s play in the system given a plethora of factors. There are also unknowns that can’t be sussed out from the data collected, and buffers must be put in place to account for the “slop.” It’s a messy job, but if you want to accurately build hiring plans and provide detailed justification to those with budget authority, you have to take it seriously if you want to avoid either a dearth or surplus in resources. It’s also critical to acknowledge that you aren’t putting together soulless plans, this is human staffing and real lives will be affected. If you significantly miss in your forecasts and are understaffed, your existing team will become overloaded, morale will take a hit, your SLA targets will be missed, and your CSAT will suffer. If you significantly overestimate resource requirements, you’ll have unnecessary spend, idle agents, and wasted training as you’ll be required to reduce staffing levels, meaning that staff will be transferred to other projects or laid off.
Remaining focused on the human element, it can be all too easy to get lost in the numbers when calculating headcount requirements and it’s important to remember that 100% utilization for staffing is an unrealistic, and honestly, impossible target. If there’s an 8 hour workday, there’s a lunch period, there are coffee breaks, there are bathroom visits, and yes, even a little bit of daydreaming and an unexpected brief phone call from the daycare due to a scraped knee on the playground. Life happens. I always set my calculators to 70%, but you can choose a different target, just don’t assume over 85%. If the workday is 8 hours, and utilization is set to 70%, maximum hourly output, on-task, is 5.6 hours. For simplicity’s sake, let’s just say that agents are “skilled”, or trained to specifically handle, all categories of tickets in Tier 1 Support (first touch level) via a singular contact channel.?
Some made-up, but realistic, assumptions and KPIs to work with:
Hours of Operation = 1 shift, 5 days a week
Agent Utilization = 5.6 hours per day (70%)
AHT (per response, blended) = 6 minutes
FRT (average) = 8.2 hours
FCR = 45%
Responses Per Ticket (average) = 2.3
SLA for First Response = 1 Business Day
CSAT target = 80%
Expected Contact Mitigation = 10%
Forecasted Unit Sales (1 month) = 10,000
Categories of Contacts:
General Inquiry = 20% of volume
Product Issue = 50% of volume
Billing Inquiry = 15% of volume
Shipping Inquiry = 15% of volume
Again, to keep things simple, let’s say you receive 2000 support tickets a month on average, but you have an upcoming product launch at the end of Q1 of the next year. At monthly sales sitting at 10,000, and your monthly support contacts at 2,000, you have a 20% Monthly Contact Rate. Based on forecasted, unavoidable failure rates for the upcoming product which are similar to your current product, you expect the Contact Rate to remain flat but sales in the first month for the new product to hit 15,000 and the legacy product to reduce to 5,000 as you still have inventory to sell.
Given the above scenario, let’s assume you are forecasting Q1, and the new product launches in March:
January = 10,000 (Product 1)
February = 10,000 (Product 1)
March = 5,000 (Product 1), 15,000 (Product 2)
Therefore:
January = 10,000 x 20% = 2,000 support tickets
February = 10,000 x 20% = 2,000 support tickets
March = 20,000 x 20% = 4,000 support tickets
Q1 = 8,000 support tickets
8,000 x 2.3 Responses Per Ticket x 6 minute AHT = 110,400 minutes, or 1,840 total hours of labor
1,840 hours / (31+28+31 [Jan-March days]) = 1,840 / 90 days = 20.44 hours per day of labor (average)
20.44 hours / 5.6 hours of agent utilization per day = 3.65 headcount needed rounded to 4 (you can’t have 0.65 of a person you silly goose)
But wait... you can’t just take the hours of labor, divide it by agent utilization hours, and magically have your headcount number. That would be all too easy! Remember, you have a 1 Business Day SLA, your agents are only working 5 days a week (no weekends). Tickets can be submitted over the weekend and will need to be responded to when agents are on shift, so there will be a weekend pile-up waiting on Monday! Most importantly, your inbound tickets will double in March. Also, each day is not equal. In addition to that, we need to account for some level of redundancy for PTO, emergency leave, attrition, etc. We need to go further down the rabbit hole.
Projected Daily Contact Averages (January/February at 2,000 monthly tickets):
Monday = 100
Tuesday = 65
Wednesday = 70
Thursday = 86
Friday = 60
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Saturday = 50
Sunday = 35
Projected Daily Contact Averages (March at 4,000 monthly tickets):
Monday = 200
Tuesday = 130
Wednesday = 140
Thursday = 172
Friday = 120
Saturday = 100
Sunday = 70
January and February
Monday = 100 tickets x 2.3 Responses Per Ticket x 6 minute AHT = 1,380 minutes or 23 hours of labor
Tuesday = 65 tickets x 2.3 RPT x 6 min AHT = 897 minutes or 14.95 hours of labor
Wednesday = 16.1 hours of labor
Thursday = 19.78 hours of labor
Friday = 13.8 hours of labor
Saturday = 11.5 hours of labor
Sunday = 8.05 hours of labor
BUT… we have to use the contacts from March as they are double January/February. We can’t use a blended average or we’ll be understaffed when the product launches in March.
March
Monday = 200 tickets x 2.3 Responses Per Ticket x 6 minute AHT = 46 hours of labor
Tuesday = 130 tickets x 2.3 RPT x 6 min AHT = 29.9 hours of labor
Wednesday = 32.2 hours of labor
Thursday = 39.56 hours of labor
Friday = 27.6 hours of labor
Saturday = 23 hours of labor
Sunday = 16.1 hours of labor
BUT… remember the Monday pile-up:
Monday = 46 hours + 23 hours (Saturday) + 16.1 hours (Sunday) = 85.1 hours
85.1 hours of labor / 5.6 hours of agent utilization per day = 15.19 headcount needed rounded to 16
BUT… not all of the follow-up responses from customers come on the same day because people have lives. Also, remember the FCR (First Contact Resolution) KPI? Let’s apply that to the Monday total of 370 tickets (including Saturday and Sunday). While FCR = 45% for the month, the 2.3 Responses Per Ticket includes the single response resolution tickets, which drives down the average. Some tickets take 3 or 4 responses to resolve. We COULD go deeper and break down contacts by category, by week, then by FCR % per category on average as we know the percent breakdown of total volume by category, but I’m not trying to give you an aneurysm as I’d have to recalculate the Responses Per Ticket and percentage of customers that respond same day. Let’s keep it sane and just apply the 2.3 Responses Per Ticket and figure that 30% will respond the same day and our focus remains on FRT SLA (1 Business Day Response). As Monday volume dictates total headcount needed to respond within the SLA, carrying that headcount across to the rest of the week will allow us to handle the multiple responses without affecting our ability to respond quickly as we’ll have excess utilization Tuesday through Friday.
370 tickets x 30% = 111 tickets x 2.3 Responses Per Ticket x 6 minute AHT = 1531.8 minutes or 25.53 hours
370 - 111 = 259 tickets remaining
259 x 1 response same day x 6 minute AHT = 1554 minutes or 25.9 hours
25.53 + 25.9 = 51.43 hours of labor on Monday needed
51.43 / 5.6 = 9.18 headcount needed rounded to 10
For redundancy and burst coverage, let’s add a 2 headcount buffer, and that takes us to 12 headcount at Tier 1 needed. While you won’t need the headcount for January and February, you will for March with the new product launch, and sourcing, hiring, training, nesting, and preparing agents to become production ready takes time. Making sure you have the 12 staff in place in January should ensure that you’ll continue to meet your SLA targets and keep that CSAT high!
While you may think the above got a bit nutty, it can get absolutely insane when you factor in multiple contact channels, 7 day a week or 24 hour coverage, seasonality (spikes in contacts around sales or holidays), agent skilling by contact category, escalation support staff (Tier 2, 3, and Technical), and much, much more. The great thing is that once you’ve created a calculator in your favorite spreadsheet program, you can get it to a place where it’s simply inputting a few variables and BOOM, magic comes out the other end. Making sure the calculator build is not tribal knowledge and is properly documented is crucial to avoiding unnecessary redundant effort which can be costly as building a complex calculator can sometimes take multiple days or even a week depending on the research that’s required to craft the algorithms.
Did I scare you off? I really hope not and hope that you found the above educational. As someone who has built numerous calculators over more than a decade, it took a bit to find a rhythm, but once you find it, you’ll be amazed at how accurately you can forecast resourcing needs, and trust me, your Accounting/Finance department will absolutely adore you as you will be their favorite person to work with given your fiscal responsibility.
Need help analyzing your support operations and building complex resource calculators? Have no fear, CX COps Consulting Inc. is standing by to assist! If your company is in need of advisory services pertaining to customer experience or customer operations, CX COps Consulting Inc.(www.cxcops.com ) is a consulting company with over 15 years of real world, in-market experience, from Startup to scale, in the areas of customer support, project management, staff development, quality assurance, fraud and risk management, product operations engineering, community management, and reverse logistics and repair. To learn more about what services we can provide, please reach out here on LinkedIn, or email us at [email protected] .
Thank you and have a great week!
Founder/Principal @ CX COps Consulting Inc. - Ready to help your business mitigate risk, enable "sad path" recovery, and deliver awesome customer experiences!
5 个月Found an error in my calculations as I mistakenly blended March totals with January/February. If you read this before the edits, my apologies!