Free Video Conference Consultation

During this time of uncertainty caused by the Covid-19 virus, we here at Shiftwork Solutions have asked ourselves, “What can we do to help our shiftwork communities get through this?”

Last week, we shared some “out of the box” type ideas to consider in your battle against Covid-19. We’ve received several positive responses to this post. Additionally, companies contacted us to discuss the steps they are experimenting with to balance demand and resources.

We’d like to keep up our support by popular demand.

We are offering a free video conference call with one of our shiftwork experts. You can drive the agenda and discuss your shift work, operation, and staffing related questions, including:

  • Considering higher overtime to use as few employees as possible?
  • Are you struggling with the “Ramp-Down” or “Ramp-Up?”
  • Are you thinking about shorter work weeks to keep as many employees as you can?

There are any number of issues that we would be happy to discuss with you. This includes your stories of success or of things to avoid.

To set up a Video Conference Call, send us an email at contact@shift-work.com

How to Manage Variable Workloads

How to maintain the right amount of coverage and minimize the costs

by Dan Capshaw & Bruce Oliver- Shiftwork Solutions LLC

Does the demand for your company’s product(s) follow a seasonal pattern or exhibit other periodic variations? As long as the changes in demand are not “permanent,” there is no reason to hire enough employees to cover the peak workload requirements. If you did, you would have to either lay them off when demand dropped, or retain and pay them during periods when they were not needed. Paying for this “idle” time can be very expensive.

Here are four options frequently used to maintain the right amount of coverage and minimize the costs:

  • Planned overtime
  • Temporary employees
  • Discretionary work management
  • Planned time-off management

Planned Overtime

Planned overtime is the most flexible option of the four. It allows you to vary the coverage from a fixed number of employees. Although the overtime is usually paid at a higher rate, it is not an on-going cost. You pay for it only when the extra capacity is needed. Thus the incremental cost of increasing coverage is relatively small.

When you hire more employees, the added cost includes both wages and benefits, and you pay these “loaded” wages even when the workload drops and the people are no longer needed.

This means you can minimize your costs by covering the majority of the workload variations with overtime.

The major drawback comes from higher levels of overtime over an extended time period. When overtime exceeds 20% of the total hours for a sustained period, it can have adverse effects on morale, safety, and productivity.

Temporary Employees

Fortunately, overtime is not the only mechanism that we can use to match the coverage to varying production demands. Another alternative is to use temporary and contract labor to cover 10% or more of the labor required to run a typical manufacturing organization. While the problems associated with using temporary labor are well documented, the ability to economically flex up and down by 10% without affecting the rest of the workforce should not be ignored.

Discretionary Work Management

Another way to address variable workloads is to use discretionary work (such as training) to fill in for the slow periods. Discretionary work needs to be done at some point during the year, but its timing can be matched to the availability of resources to perform that work.

Suppose you have a significant drop in demand around the holiday period in December and January. These months would be an ideal time to build in some extra training. In fact, this is an ideal time to hold training that is best done when the entire crew needs to be together.

Other discretionary work, such as special maintenance or cleaning activities, can also be scheduled for these slow periods. One of the goals of discretionary work during slow periods is to convert potential idle time into productive time. Using “busy work” to fill idle time will not reduce operational coverage costs unless that work must be done to keep the plant operational.

Depending on how much discretionary work exists, it may be worthwhile to increase staffing slightly to allow more unassigned time to perform the discretionary work. The risk of doing this is that when the discretionary work cannot be matched to the built-in idle time, costs rise.

Planned Time-off Management

Employees take planned time-off for vacations and floating holidays. This time-off typically is more than 5% of an employee’s scheduled work hours over the course of a year. During peak production periods, employees taking time off are usually replaced by other employees working overtime. During non-peak periods, there is no need to use overtime to replace these absences, so idle time is reduced.

The objective of managing this planned time-off is to encourage personnel to take their time-off during slow seasons, and not to take it off during periods of peak production. Three ways to do this are:

  1. Restrict the number of people that can be on vacation at any one time. During peak production demand seasons, time-off controls can be tighter than they are during the non-peak seasons. This effectively shifts planned time off to the non-peak seasons.
  2. Schedule plant shutdowns during the slow months and require unnecessary personnel to take a vacation. This uses up vacation, reduces production hours, and allows for maintenance to be performed.
  3. Schedule personnel to take a vacation even if the plant is operating. In other words, if employees have not chosen a vacation time that meets the business needs, schedule it for them (with their input). This allows management to substitute vacation hours for idle hours.

For all three of these methods, the biggest risk lies in the employees believing that their time-off is restricted for arbitrary reasons. Therefore, when one or more of these methods is used, management needs to carefully explain why the needs of the business require time-off to be managed. Equal application of the planned time-off management techniques will reinforce the message that the rules are established to help manage seasonal workload and other business issues.

Managing planned time-off effectively can allow you to increase staffing so that more work is performed on straight time and less on overtime. Like discretionary work management, if planned time-off is not managed effectively, it can exacerbate the variable workload problem.

Summary

To summarize, the best practices for managing variable workloads are to:

  1. Use overtime to cover the majority of workload variability that exists.
  2. Use a 10% buffer of temporary employees to flex your capacity up and down to match the changing workload (but only if the skill requirements allow it).
  3. Minimize actual idle time by planning discretionary work and training to be performed during the slow periods.
  4. Manage planned time-off so that more time is taken during slow seasons than during peak demand seasons.

Call Us and We Can Help

Call or text us today at (415) 858-8585 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.

11 steps you can take today to keep your employees safe and your shift work operation going

In light of the rapidly evolving COVID-19 virus situation, I’m going to make recommendations that would normally seem unusual.  Typically, we plan and create shiftwork structures for long-term success.  We look at costs, employee engagement and a wide range of best shiftwork practices.

Today, I want to focus on short term actions: what can plants do today to keep their doors open and keep their employees safe?

Consider these ideas:

  1. If you are running three 8-hour shifts a day, drop down to two 10-hour shifts.  Use the 4 hours of downtime to clean/sanitize.
  2. Don’t have shifts start/stop right after each other.  For example, if you run two 10-hour shifts, make the four hours of downtime occur as two sets of two hours: two hours between each shift.
  3. Eliminate face-to-face turnovers. Consider digital alternatives; perhaps passed along online.
  4. Ask for cooperation in a time of unusual circumstances.  For example, many parents will now have childcare issues.  Look for volunteers to swap shifts to accommodate those that need different shift times for the time being.  Allow employees to donate PTO to a coworker that really needs it.
  5. Stagger breaks and lunches to minimize too many people being in the break/lunchroom at the same time. 
  6. Ensure adequate self-cleansing equipment is readily available; not just at entry points but at every workstation.
  7. Hold training on “best practices” for staying healthy (cough into elbow etc.)
  8. Encourage people to stay home if they are sick.  Put any attendance “point system” on hold.  See our post on the cost of paid time off.
  9. Incentivize people to take vacation now.  For example, if they take vacation off between now and the end of May, you will allow them to take 50% more days off with pay.  Remember, vacation taken now is vacation that will not be taken when you need people as you ramp back up later.
  10. Take advantage of extra downtime to upgrade/repair equipment.  Get as much done now as you can so that when you ramp back up, you are firing on all cylinders.
  11. Lead by example.  Keep social distances.  Be seen as always following sanitary practices.

The COVID-19 crisis will pass.  When it’s over, you want your workforce to still be with you.  Additionally, taking care of your employees creates goodwill within the community.  The right steps now can help you get through these hard times while emerging as the employer of choice going forward.

Call us today if you’d like to keep your employees safe and your shift work operation going. We can help you tackle short term and long-term challenges.  We can help.  (415) 858-8585.

How to be thorough when assessing the true cost of paid sick leave

The health and well-being of the employees is the companies’ top priority. As news about the coronavirus (COVID-19) continues to develop, giving employees more paid sick time gets in the focus.

Although Congress has just passed (March 18, 2020) a major package including an expansion of paid sick days and emergency paid leave for a subset of workers, the bill is not universally applicable to all sizes of businesses and all employees.[1]  

Knowing the actual cost of paid time off can help companies assess the financial impacts of giving more paid time.  

So, what is the cost of the paid sick days? 

Calculating the cost of additional paid time off is relatively straightforward for companies with both 40 hour or 24/7 schedules.

Let’s start with this: there are 52 weeks in a year.  This represents 2,080 hours of work if your workers are on a 40-hour schedule and 2,184 hours of work if they are on a 24/7 schedule (per person before unscheduled overtime).  For example, increasing paid time off by 3% is equivalent to giving employees an extra 62 to 65 hours of paid time off every year.

However, most employers would continue the calculations as follows: “I just gave one person 64 more paid hours off.  I also now need to pay someone else to cover those 64 hours at an overtime rate. Thus, this cost me 64 pay hours plus 1.5 times 64 pay hours for a total of 160 pay hours!”

What’s amiss with this latter way of thinking? There are three inaccuracies with this calculation: 

  • First of all, the 64 hours that you are paying the person to be absent were going to be paid to him/her if she was at work so this is not an “extra” cost. 
  • Secondly, there is an extra cost to pay someone overtime to cover the newly created opening, however, overtime generally costs about 10% to 15% more than straight time; much less than the assumed 50% additional cost.  The reason for this is that while people get paid at a higher rate when working overtime, they don’t earn extra medical benefits, vacations, holidays, etc.  Those costs are associated with straight time wages, not overtime wages.  The liability for these costs is incurred when companies hire someone, not when someone works overtime.
  • And finally, the statement includes no consideration for what would happen if you didn’t give people paid sick time.  What is the cost of a sick person coming to work?  How many others will become sick? How well does a sick person perform?  How does a person view their company when they have always been there when needed and now that they are sick, they are on their own?  How are you viewed as a prospective employer if you don’t pay for sick days but the plant across the street does? The consequential costs of not providing paid sick leave are harder to measure, yet can be substantial.

There is another consideration with regards to paid sick time: How will it be administered? 

  • People shouldn’t be able to schedule it in advance because then it becomes a vacation instead of sick time. 
  • A use-it-or-lose-it policy encourages people to take all of their sick time every year.  A buy-back policy encourages people to come to work when sick so they can get a check at the end of the year when they sell the time back.
  • Carrying sick time over is probably the best idea, however, some companies don’t like carrying an ever-increasing paid sick time liability on the books, even though there is no additional cost.   There are several ways to make this more acceptable.  For example, let employees carry over as much time as they want, then when they retire, the company can buy back the unused sick time at a reduced rate.  This allows a worker to build up a huge store of sick hours that are available for use if they ever get seriously sick.  When they retire, they may have a year’s worth of sick time that is worth half a year’s wages. 

I’m not advocating for or against increasing paid sick time.  These guiding posts are here to help you make informed decisions ― about a subject that needs careful and accurate considerations.

Call us today to discuss your questions. (415) 858-8585.

[1]: https://www.vox.com/2020/3/18/21185065/congress-coronavirus-tests-paid-sick-days

What does the New Year Bring to a Tight Labor Market?

During our 30+years of cross-industry experience we have found that once unemployment drops below 6%, companies find it hard to staff adequately to meet production demands.  At the current 3.6% unemployment rate [1] a labor shortage is the single biggest production problem many companies are facing. For as many as eleven states, unemployment falls to between 2.3% and 2.9%.[2] What this means, is that almost everyone who wants a job has a job.  No wonder, if you ask any production or human resource manager: “What was the biggest challenge last year?” they will almost certainly give some version of “It’s becoming harder and harder to find employees in this ever-increasingly tight labor market.” They are most likely fighting this battle on two fronts:

(1) Getting quality employees to join their company

(2) Keeping those employees satisfied enough to keep them from leaving.

When it comes to attracting quality employees, the beginning of the year, however, represents an opportunity to jump-start your hiring efforts to hire quality employees ― without “poaching” from the company down the street.  According to the BLS, more than 600,000 temporary jobs were added for the holidays nationwide in 2018.  Most of these new hires were let go by February of 2019.  Given this seasonal pattern for the new year, we can expect that there are going to be a lot of people looking for work this January and February.  Keep this in mind as it may be a good idea to strike while the iron is hot. 

When it comes to keeping quality employees, it is always preferred to keep them rather than trying to constantly replace them.  When you slow down turnover, you immediately take a huge burden off of your recruiting and training efforts.

How to do that? Here are some insights for a shift work environment

  • Why Your 12-hour Schedule is More Attractive than You Think?
  • What is important about work-life balance?
  • What do you need to know about overtime?
  • 12 Unexpected Insights: do you know what you don’t know?
  • Why should you consider changing your shift schedule?

Our experts at Shiftwork Solutions have looked at the reasons why employees leave companies, such as inclusiveness, work-life balance. Their workforce survey is an integral part of their solutions which leads to happier employees who feel valued and are instrumental in delivering on growth targets.

Give us a call at (415) 858-8585 and talk to an expert for free.  We can help you to succeed.

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Footnotes:

[1] Bureau of Labor Statistics (BLS), January 1, 2020

[2] Local Area Unemployment Statistics (LAUS) January 1, 2020

Have you Made Your Business Resolutions Yet?

If you want happier employees this year, you may consider doing some things differently than last year. Otherwise, if you do what you did, you’ll get what you got. Employee engagement, better-work life balance, and improved communication might be at the top of the wish list. But what comes after establishing these resolutions? How to execute on those? You may start collecting a set of SMART goals1 that support the resolutions the best. However, before starting to jot down your goals for the year, let us borrow James Clear’s thoughts on goal setting. Clear, the author of Atomic Habits, claims that “goals are good for planning your progress and systems are good for actually making progress. Goals can provide direction and even push you forward in the short-term, but eventually, a well-designed system will always win. Having a system is what matters. Committing to the process is what makes the difference.” 2  

An example: if you’re a writer, your goal is to write a book by a certain date. Your system is the daily writing schedule you follow. Committing to writing a blog every day is a process that makes a writer confident (s)he is going to get to his/her ultimate goal of publishing the book.

It is also true for a shift work operation. Goals are useful and needed for setting a direction, but you need a system in place to make progress. Deploying a vetted, transformed shift work system is the way to achieve many of the high priority goals.  Changes in the outcome require changes in the process.

If some indicators have revealed that workforce and schedule related changes are needed for your business success, you might be ready to implement some change. A well-designed, transformed shift work system will ensure that the desired changes happen, and your resolutions come true. It will support numerous underlying goals, which include:

  1. Reduce employee turnover
  2. Improve overtime distribution policies
  3. Reduced absenteeism
  4. Increase employee involvement
  5. Improve work-life balance
  6. Eliminate unnecessary labor costs
  7. Improve communication with the workforce
  8. Adjust supervision: optimal direct-reports ratio
  9. Increase time for maintenance
  10. Fully staff all non-day shift positions
  11. Improve shift turnovers
  12. Identify workplace issues that employees find problematic
  13. Solve staffing needs for a seasonal workload
  14. Maximize productive time per line
  15. Maximize employee schedule satisfaction
  16. Build training time into the employee work schedule
  17. Implement interactive electronic employee schedule management system
  18. Increase schedule flexibility
  19. Improve technical support for non-day shift operations
  20. Increase workforce involvement in problem-solving exercises

That is how the right schedule in place can bring about happier employees. Side effects may include improved responsiveness to customer demands, an increase in revenues, a good grip on overtime, product quality improvements, and more effective communication with the workforce and within teams.  

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If you have questions or want to find out more, contact our team.  Call or text us today at (415) 858-8585 to discuss your operations and how we can help you achieve your goals. You can also complete our contact form and we will call you.

Shiftwork Solutions’ Consulting Services creates a shift operation framework that enables business operations leaders to increase production and attract a skilled workforce into a custom-designed schedule. Our experts bring in best practices from wide-ranging industries with complex operations to tailor solutions for specific operational needs. Our data-driven processes, communication centered approach and project execution bring about the changes needed to improve business operations and production output, and reduce per-unit costs, while workers feel empowered to help the organization achieve its goals.

Footnotes:

1. SMART ― specific, measurable, achievable, relevant, and time-based.

2. James Clear on goal setting https://jamesclear.com/goal-setting

What is the Worst Shift to Work? Night Shift? Afternoon Shift?

The night shift is difficult physically, but the afternoon shift can be hard on your family and social life.

In my last post, I talked about shift workers’ preferred shift, which is the day shift, and the implications of that preference on worker satisfaction levels.  An obvious follow-on question to the preferred shift assignment is to understand shift workers’ least-preferred shift.
Over the last 23 years working with shift work operations, I have observed that there is often one least preferred shift at a site, and it is either the night shift (also known as 3rd, graveyard, or sometimes the hoot-owl or hoot shift) or the afternoon shift (2nd or swing shift).  Which shift is least preferred at a particular site is typically driven by the demographics of the workgroup and the work environment.

Here are the overall results from our database of survey responses to the question “What is your least-preferred 8-hour shift?” : Least preferred 8-hour shift.

 

From a sleep management perspective, most shift workers have more trouble getting enough good-quality sleep on the night shift.  This makes it less desirable for facilitating high alertness.  On the other hand, it allows the people on night shift to meet other obligations in their lives like managing childcare, going to school, working a second job, and spending time with their families.

Afternoon shift allows many shift workers to manage their sleep patterns better (second shift workers get more sleep than either day shift or afternoon shift) so they often feel better on this schedule than on a night shift schedule.  The main downside to the second shift is that it requires work during the “prime-time” evening hours when family and friends are available.  For parents, this can be a deal-breaker since it may mean that they almost never see their families during the workweek.

This difference of opinion on the least desired shift is an opportunity when it comes to staffing your shift schedule.  On an 8-hour schedule, it is often possible to give an overwhelming majority of folks either their first or second choice of shift assignments and avoid the least desirable shift.  All it takes is some flexibility in the shift-bid system and sufficient cross-training of the workforce to meet the skill requirements on all shifts.

Call Us and We Can Help

Call or text us today at (415) 858-8585 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.