Month: June 2016

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 a 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 and 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.

Call Us and We Can Help

Call or text us today at (415) 763-5005 to discuss your operations and how we can help you solve your shift work problems. You can also complete our contact form and we will call you.

Since President Obama signed (28 May 2016) legislation raising the minimum bar for salaried people to qualify for overtime, I have been getting two questions: (1) What does this mean and (2) How does it affect my shiftwork operation.

The answer to the first is fairly straight forward. If you have a salaried person at your facility that is being paid less than $47, 476 a year, then you must pay overtime at the rate of time and one-half for all hours worked in excess of 40 in a pay week.

The second is less clear. My hope is that a few observations on my part will help you to see the impact on your operation.

First of all, I will be speaking to the role of direct supervision of hourly employees in a shiftwork operation. This is often an industrial setting but need not be so.

Supervisors are typically salaried. Sometimes they are home-grown in that they come from the existing hourly workforce. Sometimes they are brought in from the outside.

This new overtime rule means that if you are paying your supervisors less than about $26 an hour, then you must pay them overtime when they work over 40 hours in a week.

Let’s be clear, someone coming to work for a wage or any other benefit represents an agreement between two parties: (1) the employer and (2) the employee.

The employer says “I will compensate you this way if you work here.” The employee says “I will work there for this compensation.”

To this extent, the law may be self-correcting. Employers faced with paying overtime may offer a lower starting salary while employees, may accept a lower starting salary knowing that overtime will be added to it.

Now, “compensation” can mean a lot of things. Historically, being promoted to a supervision role means that you get more money per hour. However, this does not always correspond to “more money overall.” Frequently, supervisors get a higher hourly rate (paid as salary) but then lose out on what may have been a significant amount of income from overtime; overtime they are no longer eligible for. There is no shortage of people that have turned down salaried roles because they didn’t want the pay cut.

Management often argues, correctly, that the compensation for supervision goes beyond wages. Salaried positions often make “decision-makers” out of “decision takers.” For many, the draw of a position of responsibility can be huge.

Salaried positions sometimes pay overtime-type wages if you come in on a day off while not paying it if you work a longer than scheduled day.

Salaried positions sometimes offer compensatory time off if you work extra hours.

Managers hire a salaried person and tell them “This amount of salary includes compensation for the expected extra hours you will work.” In other words, they are saying that they are building the overtime wages into the offered salary.

Maybe there is a company car or free lunches or a better vacation.

Probably one of the biggest reasons someone will take on a salaried position is that it represents a stepping stone to something even bigger; perhaps a promotion to the level of really big dollars.

In the end, it still comes down to the agreement. Compensation = Filled Position.

If you are paying your supervisor less than $47,476 per year, then I have to say, “You get what you pay for.” I know that can be harsh in certain markets that only provide the thinnest of margins. Still, good leaders are hard to come by. There is competition for them and if you don’t pay them enough, they will leave for greener pastures.

Of all the companies I have worked with over the last 28 years, probably none of them paid less than the $47K bar set for overtime wages (in today’s dollars). Discussion about this law states that it protects 4.2 million salaried employees. In truth, they may be protected but are probably not affected.

In short, the impact of this law is far more political than practical. Chances are great that you will be unaffected in some major way.

Call Us and We Can Help

Call or text us today at (415) 763-5005 to discuss your operations and how we can help you solve your shift work problems. You can also complete our contact form and we will call you.

5 Signs that you may need a new shift schedule

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.

The impact of overtime on salaried personnel