Fundamentals of capacity planning

Tue May 21, 2024

When WFM professionals hear the word capacity planning, they automatically feel proud about their job. That is the power of Capacity Planning!!

Many analysts aspire to become a capacity planner one day, because of the challenge, fun and satisfaction the planning activity provides. It feels like control of the main resources of the entire project is in our hands which makes us feel superior about WFM and the planning.

So, what is Capacity Planning?

The term is self-explanatory which says that we are going to plan the capacity. Capacity is in terms of FTE Requirement, Call Handling Capacity etc.

The word planning indicates future. Therefore “Capacity Planning” is a process of making plans of requirements for the future.

Why is it so important?

There is a famous quote which says “An hour of planning can save 10 hours of doing”. The future of business should be foreseen to prepare for all the possible causes which may affect the smooth operation of the business.

This includes the number of staffs required, what will be our call handling capacity in the future etc.

Depending upon the planning, the management will take necessary actions to solve any requirement deficit. For e.g. we may hire a batch of new agents to handle to higher call volume anticipated on third month from now.

The hiring decision taken will change the planning of many departments such as Hiring, Training etc. and hence becomes highly important.

On the other hand, the cost will increase as more people are added which will also be of Finance Department’s interest.

In short, the WFM’s execution of accurate capacity planner is very important as the major business decisions lie on it which in turn affects the decisions of other departments too and also impacts the profitability of a business. This adds a lot of weightage on the WFM department and it is viewed as most required skill by many organizations.

We hope now you can see, why WFM professionals feel proud about Capacity Planning!!

Let’s look at the steps for Capacity Planning Process below

The first step in Capacity Planning is to find out the future FTE requirements. The forecasted volume and AHT along with shrinkage, attrition and other factors are used to find out how many people are required in the future.

Post that, we will find out how many people are currently present in the process and by comparing both required Headcount and Present Headcount, the decisions will be taken whether or not to hire new people. Sometimes we may have deficit just for one week which can be managed by Over Time.

Next, we will look into the factors required to build a capacity planner along with their uses

• Forecasted Volume and AHT – This will tell us how many people are required. The requirement can be derived either by using Erlang or Linear Workload method.
• Shrinkage – This is simply the buffer component which we anticipate for the future to protect the operations against any unforeseen headcount shortage. The shrinkage can also be used to plan for any special event such as new product release, holidays etc. Shrinkage if not planned effectively may lead to over or under staffing which may cause discomfort for either customers or for the business.
• Attrition – Not all the people will stay in the company forever, they will switch over the job for multiple reasons. A good capacity planner should take attrition into account so that he/she can identify how many people should be hired to fill the attrition positions. Many businesses may have identified attrition pattern such as Holiday seasons, College Graduation season, Months of Loyalty payment etc. This has to back filled with new agents to fill the gap
• Training Duration – As we do the capacity planning to anticipate the future hiring, it is also important to find out what would be the contribution of new agents in terms of call handling capacity. We hire agents either to fill the attrition gap or to fill the higher volume requirement. But depending on the training duration, we have to precisely inform the management when an agent should be hired and when he/she would start taking calls. Therefore, Training duration is important for the precise details of hiring timelines.
• AHT Learning Curve – Not all the agents will become proficient in handling customers from Day 1, some may take longer time to understand and some shorter. Therefore, it is very important to have an AHT Learning Curve which will be pre-decided by the operations team. This will help us understand what will be the duration for an agent to become proficient. The AHT learning curve is required since this will increase the overall AHT as new agents are hired. If the AHT increases, the requirement will increase and the call capacity will decrease. If we know exactly how much this would happen, we can plan for Over Time or shrinkage reduction etc., to meet the requirements. Basic example of AHT glidepath is 600 secs in 1st month, 500 secs in 2nd Month, 400 secs in 3rd Month and 300 secs (Target AHT) from 4th month onwards.

Capacity planner becomes good and precise only if it is worked along with operations team, training and hiring team. They may have some constraint in terms of training, hiring etc. which needs to be considered by WFM while building the planner. Basis all those, we have to look at the requirements and recommend necessary action to be taken by the operations team.

Finally, don’t forget to track the actual performance

It is very important to track the actual performance and compare it against what was planned to find out the gap and why it happened. These answers can help us understand the changes which needs to be done for the future planning for better anticipation of the future requirements

If you are interested to gain in depth knowledge about this topic then kindly submit a training request by following this link