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.

___________________

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.  

_______________________

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.

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

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

As 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 in this with regard 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 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 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.   It’s 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? Is 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 skills in San Francisco, you may need to “grow your own.”  Can you scale back with seasonality by using shorter workweeks 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 less 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 to 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 ensure 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.

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.

The difference between “a schedule” and “your schedule”

The number one way that companies find a shift schedule is to hold a meeting and ask, “So, does anyone know of any shift schedule patterns?”

There are several false assumptions built into this methodology.  One is that all schedules are created equal; that any schedule that covers the hours needed is as good as any other schedule.  Another is that the workforce, having been allowed to choose between a couple of patterns will be satisfied that their needs have been considered.  Also, there is the one-size-fits-all idea which says that if one area goes to a 24/7 schedule (for example) then all other areas must follow suit.  There is the staffing assumption that you must staff to allow for ZERO overtime and that all areas of the operation must increase or decrease staffing levels in lock-step; that is to say, if a new schedule covers 40% more hours you will need 40% more employees across the board (including supervision, quality, maintenance, etc.)  Finally, there is the assumption that policies for things such as holidays and vacations, which worked for your old schedule, will also work for your new schedule.

There are actually many, many more issues that are overlooked or swept under the carpet in the name of expediency, but I think you get the picture.

The right schedule is one that is implemented using the old carpenter’s adage of “Measure Twice and Cut Once.”

Taking the time to do a schedule change right will not only save you from problems down the road but will likely result in immediate productivity gains and cost decreases which are not realized by the “Who knows a schedule pattern” methodology.

Here are my thoughts on just a couple of the “assumptions” mentioned above.

Employee participation is more than just allowing them to select between a couple of patterns.  Participation means they know why a change is taking place.  They are educated about what schedules can do (and can’t do).  They are given a wide variety of options that span the range of what is available instead of just a few similar patterns.  They are allowed to have meaningful input on things like overtime levels, start times, the day on/off patterns and more.  They are given “perfect” information about their final options in such a way as to allow them to discuss the options with their families before making a choice.

One-size-does NOT-fit-all:  You may have an operation that absolutely needs to go to 24/7 (for example).  In some cases, this means a “balanced” schedule across all days of the week where every day has the same number of people in production.  However, suppose one or more areas can keep up with the 24/7 production by only running one shift a week; should they go to the 24/7 schedule?  What about maintenance?  Should they have a “balanced” schedule or should the labor be moved to parts of the week that maximize production?  Remember, maintenance is at its peak performance when production is at its lowest.  (It’s hard to fix equipment while it is running.)  What about quality, engineering, and office staff?  These areas rarely need to go to a 24/7 schedule (in their entirety) when production does.   The “Best Schedule” is usually a collection of schedules that allow all areas to operate and support each other seamlessly.

Staffing is where most companies make the most costly mistakes.  They either over-staff and thus, pay for labor they don’t need or they under-staff and run the risk of high fatigue and turnover that typically come with a worn-out workforce.  Staffing is not guesswork.  There are mathematical solutions that will tell you what the optimal staffing level is for your site.

As for policies, let me just say this: “If you think your 5-day policies will all work just fine on a 24/7 schedule – you are wrong.”

If you decide to “go it alone” let me at least offer you this: Give me a call when you get stuck.  So long as I don’t have to pick up a pencil, I’m free.  So don’t make a mistake because you didn’t have someone to go to. 

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.

6-day schedules (part 3)

This is the third in a series about 6-day schedules.  I recommend you read 6-day schedules (part 1) and 6-day scheduled (part 2) before going forward with this one.

Today’s post will begin the focus on a 12-hour schedule pattern for covering 24 hours a day, six days a week.

The premise behind this schedule is that you still only want to use three crews to cover six days, but you would rather not hire more employees.  Because of this, everyone will still have to work 48 hours a week (changing schedules does not change total hours worked.  Only changing staffing or the workload does that).  This schedule allows people to get their weekly 48 hours in by only coming to work for four days a week.

Let’s look at a quick comparison:

8-hour shifts: Work 6 days @ 8 hours and get one day off per week.  Total hours worked – 48

12-hour shifts: Work 4 days @ 12 hours and get three days off per week.  Total hours worked – 48

Picture2

This pattern can be worked as either a fixed schedule, a rotating schedule or and oscillating schedule.  The way it is shown here is as an oscillating schedule.  This is a schedule that has both “fixed” and “rotating” features.  In this example, the crews labeled “Days” and “Nights” are working fixed shifts.  That means they are always on Days or Nights.  The crew labeled “Day-Night” actually rotates between Day shift and Night shift (Nights on Mondays and Tuesday and then Days on Fridays and Saturdays).

There are several benefits to this schedule over a traditional 6-day, 8-hour pattern.

Employees will like it for a variety of reasons.  All will appreciate the extra days off.  The Day shift people will like having every weekend off as a 3-day weekend.  The Night shift people will like having 3 days off in a row, even though they are Sunday through Tuesday.  The rotating crew will typically be the junior-most crew.  As the junior employees, they could be looking at years before they have enough seniority to get to the Day shift.  In this schedule, they work the Night shift for 2 days and then do not have to return to nights for another five days.

On the downside, the nature of the work must always be considered when looking at 12-hour shifts.  In nearly all cases, if someone can do something for 8 hours at a time for 6 days in a row with a single day of rest in between, then they can do that same thing for 12 hours at a time for 4 days a week with three days off per week to rest.

Most companies that go to 12-hour shifts will find that they need to rework some of their pay policies.  For example, if you only pay up to 8 hours a day when someone goes on jury duty, you may want to rethink that policy.

In 6-day schedules (part 4) I will return to the 8-hour idea.  We will look at a way to add people in a less-than-full-crew increment to reduce overtime.

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.

Staffing, overtime and your schedule

One of the most common and misunderstood issues surrounding schedules is the relationship between staffing, overtime and the schedule itself.

The reality is that a schedule has no impact on the quantity of overtime your site is experiencing.

Overtime is a function of (1) How much work is there to do and (2) How many people do you have to do that work.

Your schedule only tells you “when” the overtime will occur.

If you take a look at all the hours it takes to get a job done, and then look at how many people you have to do the work, you will know how many hours per person will be needed.

If you have 4,200 hours of work to be done next week and 100 employees to do it, then everyone will average 42 hours of work for an overtime rate of 5%.  Notice that the schedule played no role in determining this figure.

So where does a schedule come into play?

In most cases, a schedule will tell you “when” the overtime will occur.

For example, if your schedule has short shifts (i.e. 8 hours or less), the overtime is typically worked before or after a regular shift.  There are two reasons for this.  First, the shift is short enough that you can add hours to it without adversely impacting safety or productivity.  Secondly, the shorter the shift, the more days of work your schedule will have.  This means you have fewer days off.  The fewer days you have off, the more you want to protect them.  Therefore, if you have to work overtime, you’d rather do it on a day when you are already at work rather than giving up one of your preciously few days off.

If you have longer shifts (i.e. 10-hour or 12-hour shifts) then overtime is much more likely to occur on a regularly scheduled day off.  There are two reasons for this.  First, the longer the shift, the fewer hours you can add before the shift become too long and begin to adversely impact alertness, safety, and productivity.  Secondly, longer shifts have many more days off.  More days off has the impact of lessening the value of a day off, (In much the same way that diamonds would be less valuable if they were laying around everywhere.)  This means that it is less painful to give up a day off when you have a lot of them.

There is one condition where the schedule can play a role in the “quantity” of overtime – When you have the wrong schedule to begin with.

The wrong schedule can cause you to take the “perfect” number of people and put them in less than perfect locations.  For example, if you have the right number of people but your schedule causes you to be overstaffed during some time periods; you will then be understaffed during other time periods. This will cause overtime.  More importantly, they will cause Idle Time when you are overstaffed along with the Overtime for when you are understaffed.  Both of these conditions create high avoidable costs that can be eliminated with the right schedule.

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

The Impact of Local Unemployment

More often than not, companies come to us when they are out of capacity.  Overtime is high and the workforce is becoming tired.  Absenteeism is leading to under-staffing and more overtime.  This is the type of death-spiral that does not right itself unassisted.

Improved shift scheduling can help.  However, one component is often to bring in more straight time hours – hiring more employees.

Given the currently high national unemployment rate, it can be hard to imagine that this would be one of the hardest parts of a schedule change.  Certainly, there are plenty of people out there looking for work, right?

Possibly.

Areas with high unemployment can be viewed as a “buyers market”; one in which a person is selling his time and the company is buying that time.  Since there are a lot of people willing to sell their time, the market is flooded and therefore, the buyer (the company) is in a stronger position when it comes to setting wages.

However, if manpower is scarce, this changes.  It becomes a “seller’s market”; one in which the person selling his time has more power and control over wages.

Where is the tipping point?

This is hard to precisely identify as it depends on the skill set you are looking for.  You may be in a high unemployment area but the skills you need are scarce so it will feel like a low unemployment situation.

However, most companies start to see the change when unemployment drops to about 6%. Above this number, it’s relatively easy to find labor.  Below this number,  labor starts to get scarce.

When unemployment drops below 5% companies really start to feel the pain.  Basically, everyone that wants a job already has one and those remaining are unemployable for some reason

Companies need to be prepared to sweeten the pot when this happens.  Wages alone will not attract and retain quality employees in a tight labor market.  Get creative with your schedules.  Have different schedules that offer appeal to different demographics.  We had one company actually place ads in the local newspaper touting the fact that they had several types of schedules to fit all different types of lifestyles.

Thinking outside of the box when it comes to work schedules is a low-cost way to attract and retain the people you want and need.

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