Shrinkage is a term used in different contexts, but it generally refers to a decrease in size, value, weight, or quantity of something. In accounting, inventory shrinkage occurs when a retailer has fewer items in stock than in the inventory list due to clerical error, goods being damaged, lost, or stolen between the point of manufacture and the point of sale). This affects profit, and retailers may increase prices to make up for losses, passing the cost of shrinkage onto customers). Shrinkage can also refer to the loss of inventory or cash from a business due to factors such as theft, damage, or administrative errors, which can have a significant impact on a companys bottom line, reducing profits and leading to cash flow problems. In the context of workforce management, shrinkage is the amount of “over-scheduling” necessary to have the right number of agents working at any given time of the day, taking into account factors such as sick leave, time off, and training.