Category Archives: absenteeism

Staffing? <-Good Question

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Considerations for answering – How Many Do I Hire?

I’m a shiftwork expert so my posts are always centered on shiftwork operations.  That doesn’t mean that there isn’t something that a non-shiftwork operation might find helpful.  My hope is that every reader of every post is able to find value.

Most of my work, about 70%, is with companies that want to expand their operations while minimizing capital investment.  Basically, I help answer the question “How can I get more out of the equipment I already have?”

Once that’s been determined, my bread and butter is “process and implementation”.  I help them find where they want to go.  I valuate that destination and then I help them to get there.

One question is always “How many people do I have to add to get to where we want to go?”

There are short and long answers to this question.

If you are running three shifts, Monday – Friday and want to go to a 24/7 operation, you need to add 33% more operators.  You will also need to add another supervisor.

That was the short answer.

Here is the longer one…

This is really more of a list of considerations rather than The Long Answer.

First we have to land on an overtime number.  This is more than just creating an arbitrary goal of so many days or hours of work in a row.  Try answering the following questions for a start:

  • How much overtime do you want to have?
  • What does overtime cost (cost to company not income to earner) as opposed to fully loaded straight time?
  • What is the workforce’s appetite for overtime?
  • Is the process seasonal in that sometimes you need more people than other times? What is the level of operator specialization?
  • What is your turnover?
  • What is the lead time between needing a new hire to having a fully trained person?

The overtime issue is a big one since, with a fixed workload, overtime is a function of staffing.  More people = lower overtime.

If production is going to run more days, what does this imply for support operations?  Will quality, maintenance and sanitation requirements be expanded? Often the answers is something like this:

  • Quality will be affected slightly.  They will need more people but not 33% more.  Maybe something like 10% more.
  • Maintenance will actually become more efficient as you no longer have to be staffed at a level where you can fix everything on a weekend.  When running 24/7, maintenance is often spread out on the more productive weekday shifts.  This may actually lower your maintenance staffing.
  • Sanitation crews sometimes drop to zero staffing.  This is because 24/7 operations no longer sanitize in accordance with a fixed day or time of day schedule.  Instead, they run for as long as they can and then the operators simply become sanitors and clean up their own lines; starting back up as quickly as possible.

You don’t need 33% more Plant Managers, HR Managers or Engineers.  There is definitely a “cheaper by the dozen” affect when it comes to many of the higher level non-direct labor positions.

Clearly, if production goes to a 24/7 pattern, not everyone at the plant needs to do so as well.  In fact, there is a good chance, depending on your operation, that not all of production needs to go.  It’s not unusual for some lines to go to 24/7 while others remain on a 5-day schedule.  In some instances, running your high volume equipment more hours will actually take fewer people instead of more if you are able to retire some of you older, more labor intensive capital.

So there you have it….the longer answer.

The point here is that you need to do your homework.  Look at the fully loaded cost of a single employee.  Hire too many and things start to get expensive in a hurry.  My rule of thumb is to initially staff lean when in doubt.  If you are wrong, you can use overtime until you get the staffing right.  Coming in with too many people to start with will cause “income shock” to those that just lost all of their overtime AND you run the risk of overstaffing which is expensive and only fixable by painful layoffs.

If you have any questions, you can reach me at:

Jim@shift-work.com

(415) 265-1621

 

 

5 things H.R. needs to know about shiftwork

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Let’s start with this – My intent with this post is NOT to tell H.R. how to do their job. Rather, I want to round up many of the issues surrounding shiftwork in an effort to put the spotlight on those I have found to be most important to H.R. professionals.

So, let’s get to the list…

#1: No one is going to come to H.R. to tell you how much they like the schedule they are currently working.  When people are unhappy, they complain. When they are happy, they are quiet.  This means that people coming to your office to complain about the schedule will ALWAYS out number those that come by to tell you they love it.  Just be aware that listening to those that come to you is not a representative sampling of your workforce.

#2:  What the average shiftwork wants or what a nearby plant is doing has little bearing on what you should be doing with your schedule.  After nearly 30 years in the business, I can tell you exactly what the average shiftworker likes and doesn’t like; and yet…I have never met an average shiftworker.  Everyone is unique.  In the same way, your business is unique from the company down the street.  What works for one company is not necessarily what will work best for you; even if you are in the same industry.

#3: As a service organization, H.R. works for several different interests including: planning, production, maintenance, quality, administration and leadership.  All of these have different functions and thus often require different shiftwork structures and outcomes.  Serving several masters is no easy task.  All need to be heard.  All need to be tended to.  Remember, if H.R. was easy, no one would need you.

#4: Recruiting and retention of skilled employees is always affected by the shift schedule being used.  Supervision, absenteeism, vacancy coverage and overtime will also be impacted.

#5: Process is everything when it comes to changing a shift schedule.  How you communicate plans and ideas as well as how you solicit input from affected parties will determine the ultimate level of success you experience with your change.

Jim Dillingham, Partner

(415) 265-1621

Jim@shift-work.com

5 Signs that you may need a new shift schedule

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Shift schedules rarely fail overnight.  Typically, there are plenty of warning signs; signs that tell you to take action before it’s too late.  Here are the 5 biggest warning signs.

#1: You have idle equipment while still not producing enough to meet customer demands.  There can be a lot of reasons for this; nearly all of which point to a schedule that does not have the right people in the right place at the right time.  Product flow, staffing, maintenance and production order variability can all be addressed with the right shiftwork structure.

#2: Maintenance is blaming equipment availability for a downward trend in equipment up-time.  You can’t fix something while it’s running.  The result is often and solution like “We’ll wait until the weekend to fix it.”  This is fine until you find that leaving too much to the weekend ends up with an overly fatigued maintenance group with not enough hours on the weekend to fix everything.  Scheduling equipment, like scheduling people, can improve maintenance accomplishment while still getting the production hours you need.

#3: Absenteeism is going up as overtime starts to wear down your workforce.  As overtime goes up, two things will happen.  First of all, your workforce will start to get tired.  Secondly, they will notice that they are now making a lot of money and can afford to take time off.  This is a “death spiral”  situation in that it is self-perpetuating and will only get worse.  Staffing will impact overtime but to do so effectively, you must have a shiftwork structure to support the newly resized workforce.

#4: Local competition for labor is causing problems with recruitment and retention.  I can’t tell you how many times I’ve heard something like “Amazon just opened a mega-facility down the street and is hiring all of our employees away from us.”  The right schedule, one that is a good fit for your workforce as well as your business can help with this.  If wages are a concern, look for ways to get overtime to that 20% of your workforce that wants all they can get.  Overtime costs your company about the same as fully loaded straight time.  This means when you pay overtime, your employees make 50% more but your cost per hour is virtually unaffected.  Don’t lose your workforce because of wage pressures or quality of life issues.  The right shiftwork structure can help.

#5: Productivity metrics are dropping as equipment runtime-hours are on the rise.  If you are running more an more hours with the same old schedule, then you are probably seeing an increase in overtime.  While overtime is not a bad idea in many instances, it can eventually lead to worker fatigue.  This is especially true if you spread it evenly across all shifts.  Remember, not all employees want the same amount of overtime.  As fatigue goes up, so will accidents, quality issues and absenteeism.  You make find, for example, that running 6 days a week yields more output than running 5 days.  However, if you didn’t change schedules, a 20% increase in runtime will yield significantly less than a 20% increase in output.

In summary, don’t underestimate the impact of having the right shiftwork structure.  Fixing this issue is often the most expeditious and cost effective way of improving your overall operations.

For more information, call me, Jim Dillingham, at (415) 265-1621 or drop me a line at Jim@shift-work.com

How many people does it take to staff your schedule? (Part 2)

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There is a short answer and a long answer to this question.  Here is a link to the short answer.

Now for the long answer:

Take a look at the “short answer” in the previous blog post.  That is a good place to start.

The following should be considered to refine the number you get using the “short answer”:

  1. The cost of full time labor matters.  How much does it cost you to pay someone for an hour of straight time?  How much does it cost you to pay for an hour of overtime?  I am not talking about “how much an employee receives.”  I’m talking about cost-to-the-company.  If you do the analysis correctly, you should find that the two costs (overtime and straight time) are within 10% of each other.  This is important because the amount of overtime you use will play a big factor in staffing levels.  For a fixed workload, the higher the overtime, the lower the staffing level you need.

  2. How much training does it take to qualify an employee for a position.  It is likely that there is a wide variance on this with regards to different positions.  Do Not use and “average”.  If you need an astrophysicist and a box stacker, an average will give you a bad number (4 years of post-graduate study for the physicist and 5 minutes for the stacker = about 2 years, on average, to train an employee).  Long training times lead to an increased use of overtime and less reliance on other labor options such as temporary help.  If your workforce is staffed with highly  skilled people, whose skills are easily transferable to another nearby company, then you will have to bend a more towards compensation scheduling and employee preferences for overtime so as to not lose these people.

  3. How variable is your workload?  If your workload level is flat, you will still have some fluctuations in staffing as people are on vacation or FMLA etc.  When staffing fluctuates, you have have extra staffing available or you can use overtime or you can reduce production.  Cost, degree of variability, employee preference and the nature of your operations will all play a role in determining how you staff for variability.   Its worth noting here that the most expensive option is to over-staff or staff for peak production as this leads to frequent over-staffing which is costly. A highly variable workload tends to mean lower staffing and higher overtime.

  4. How available are alternative sources of labor?  It your workforce pro-overtime or overtime-adverse?  Is temporary or part time labor available? If you are in Memphis and need temporary, highly skill forklift drivers, there are temp. agencies that can give you all this type of labor that you want.  However, if you need those same temporary skill in San Francisco, you may need to “grow your own.”  Can you scale back with seasonality by using shorter work weeks or voluntary layoffs?  Note: If the answer is no, the staff to the lower end and use overtime when things get busy.

  5. What about support activities?  Things like maintenance, engineering, quality shipping/receiving and administration all need to be staffed appropriately as you grow (or shrink).  There is no simple formula for how to staff these as there is often not a “straight line” relationship between staffing numbers in operations and staffing numbers for support areas.  For example, a 30% increase in operation staffing does not mean you need 30% more CFO’s.  In some areas, you may actually find that you need fewer support staff.  For example, maintenance struggles to fix everything on the weekend but if you go to a 24/7 schedule, maintenance can now take place any time in the week; including weekdays where it can be performed more efficiently.

  6. Are you LEAN?  It’s “old school” to think you should stockpile between cells in a value stream ensure you never run out of product either upstream or downstream.  Instead, just-in-time is what modern operations strive for.  Many companies can maximize or throttle production using staffing alone.   This may mean you staff an area below its maximum capacity to enure it does not outrun its value stream neighbors.

  7. What is the opportunity cost of lost time?  This must be a consideration if you are going to staff with as few people as possible.  You may save a lot of money by having fewer maintenance specialists but then you might lose even more money if you suffer downtime because you are understaffed.

Staffing is at least as important as that next piece of equipment you are considering.  The right number of the right people will impact your cost structure at several different levels.  It will impact labor costs.  It will impact quality.  It will impact volume.  It will impact turnover and absenteeism.  It will impact your ability to respond quickly to your customers.

If you have any questions, please give me a call.

Jim Dillingham, Partner

(415) 265-1621 or Jim@shift-work.com

Covering a 12-hour vacancy

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There is no doubt that shiftworkers prefer 12-hour shifts over 8-hour shifts. It’s not that they like being at work for an extra four hours. They like the additional 91 days off a year.

Therein lies the problem.

With so many days off, it seems that the crew you need to get in touch with for absentee coverage is always gone.

8-hour shifts offer the following two conveniences: First, you can always ask an 8-hour person to stay over. They are already at work so contacting them simply means walking out to their work station and tapping them on the shoulder. Secondly, they are at work on 75% of the days of the year. If you need to change their schedule on a specific day, the chances are good that you just go out onto the work floor and tell them. They are probably there.

12-hour shifts have neither of these advantages. You don’t want to ask a 12-hour person to stay over for 4, 8 or even 12 hours. Also, they only work 50% of the days in the year. So, if you want to go out on the floor to tell them their schedule is changed, there is a 50/50 chance that they are on a day off and not on the floor.

The single biggest reason, by far, that companies on 12-hour schedules contact us is because of problems with absentee coverage.

People are on their days off when you need them. Your supervisor makes one call after another until someone answers their phone and is willing to come in. This is a time consuming process that takes your most expensive asset and turns it into a telemarketer.

There is a solution.

Shiftwork Solutions and Shifthound have partnered together to develop software that greatly simplifies absentee coverage on 12-hour shifts. While it works with all types of shifts, 12-hour schedule tend to have the biggest problem and would thus have the biggest benefit.

The program takes advantage of the overwhelming prevalence of cell phones, text messages and the internet.

For example, if there is a last minute opening, a supervisor can send out an overtime request to an entire crew that is schedule off. Instead of making one call after another, everyone is notified in moments.

We know that about 20% of all shiftworkers will work all of the overtime they can get. If an entire crew is notified of an overtime opportunity, the positive responses should come in quickly. They can accept overtime via text messages, email or online through the Open Shift Management program.

For more information about this product, call our office at (415) 763-5005.