# Shrinkage | Part 3 | WFM Calculations - In-Office Shrinkage

Updated: Jan 3

In our previous article, we got visibility on shrinkage from employee perspective along with various components attached to it.

Let's get into mathematics- how do we calculate shrinkage during FTE estimation?

Before we get going, there are some pre-requisite:

__https://www.scribblr.in/post/let-s-understand-fte-definition__

__https://www.scribblr.in/post/shrinkage-part-1-in-office-shrinkage-ios__

__https://www.scribblr.in/post/shrinkage-part-2-out-of-office-shrinkage-oos__

If you have gone through the above posts/article, please move forward:

As suggested earlier, shrinkage breaks down into two components - **In-office shrinkage and Out of Office Shrinkage**.

These components are represented by percentage value so as to arrive at FTE requirements. Let’s understand this by an example:

Let's take an employee Ms. Nina who works for ABC company in India:

Ms. Nina starts her day ay 14:30 IST and works until 23:30 IST.

=> Shift Length: 9 hours

During the course of her work, she is allowed to take the following breaks:

Short Break - 1 for 15 mins

Dinner Break for 30 mins

Short Break - 2 for 15 mins

=> Total break time: 1 hour

During this time, Ms. Nina is also scheduled for Team meeting of 15mins and Coaching of 15mins every day to discuss any process change or operational decision of different work roles.

Now lets calculate In-Office Shrinkage using the above data:

Total Shift Length - 9 hours

Breaks - 1 hour

Team meeting - 15 mins

Coaching - 15 mins

__IOS formula:__

In-office Shrinkage = 1 - (Total staffed time/Total scheduled time)

Let's understand Nina's FTE Definition for a week

=> (9 hours X 5 days) - (1 hour X 5 days)

=> 45 hours - 5 hours

FTE Definition = 40 hours

Remember In-office Shrinkage formula:

In-office Shrinkage = 1 - (Total staffed time/Total scheduled time)

In this case:

Total scheduled time = FTE definition = 40 hours

Unproductive time = Team Meeting + Coaching

=> (0.25 hour X 5 days) + (0.25 hour X 5 days)

=> 1.25 + 1.25

Unproductive time = 2.5 hours

Total staffed time = Total scheduled time - unproductive time

=> 40 hours - 2.5 hours

=> 37.5 hours

In-office Shrinkage = 1 - (Total staffed time/Total scheduled time)

=> 1 - (37.5/40)

=>( 1-0.9375) *100

In-office Shrinkage = 6.25%

*The above example is for illustration purpose only.*

*Below is an excel attachment with workings to understand In-Office Shrinkage better:*

The in-office shrinkage calculations varies between different companies, location and country's rules and regulation.

###### DO IT YOURSELF:

Mr. George is working for ABC company in PHP; Can you find the IOS using the following criteria?

Total Shift Length - 9 hours

Breaks = 1.5 hours

Meeting - 30mins every day

One-on-one - 30 mins every week

Please share your answer on the comments section below: