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

Things to Consider when Changing Shift Schedules

by Jim Dillingham, Partner, Shiftwork Solutions

It’s amazing how something that looks so simple can be so hard. After all, what could be easier? Just post a new schedule on the bulletin board and implement it on Monday. Or post a couple of schedules and let the workers choose the one they want. How could anyone object to that?

Many managers are perplexed when something as simple as changing shift schedules causes so much strife among the workforce. The best place to start is with an understanding of the underlying issues.

A significant effort is usually required to identify the type of schedule that will satisfy the business requirements. Once this daunting task has been accomplished, the biggest challenge still remains. How do you get widespread support for the new schedule?

One factor increasing the complexity is that managers and workers look at the schedule from different perspectives. Show a copy of a shift schedule to a group of managers and they will immediately check whether the schedule provides all of the coverage their operation requires. Hand out the same schedule to a group of shift workers and they will begin to do things like count their weekends off, calculate the best times for vacation, see who works on Christmas, etc. Managers judge a schedule by its coverage; shift workers judge a schedule by the time-off it provides.

A second (and more significant) difficulty is that the shift workers will not agree on what a good schedule is. Beauty really is in the eye of the beholder. A shift schedule that one worker believes is perfect may spell disaster for another. Some managers believe (or hope) that since everyone works at the same site doing the same work, they should all be comfortable with the same type of shift schedule. Unfortunately, it just doesn’t work that way.

Shift workers have strikingly different lives away from work. Some have second jobs and some are students. There are single parents and people with civic, religious, or social organization responsibilities. Think of the variety of activities your people participate in, such as youth sports coaches, bowlers, hunters, skiers, golfers, etc. If you have 500 shift workers, they will have 500 different uses for their time off. Because of the diversity of activities, responsibilities, and interests, some will want to have lots of time off each day while others will prefer more full days off. You will find some who want partial weekends off (if they have to work a weekend at all), and others who would rather work full weekends so they can have full weekends off at another point in the schedule. The bottom line is that when you change a shift schedule, you impact the lifestyles of your workforce, and because of the diversity of lifestyles, not everyone will be affected in the same way.

Consider these before deciding about the new schedule

Still want to change schedules? Keep the following three principles in mind, and you will go a long way towards smoothing the transition:

  • Clearly define the business case for changing the schedule. Among the drivers can be changing demand or customer requirements, organizational or cultural change, new business imperatives (such as new strategic direction), or technology improvements. You don’t want to change schedules if you don’t have to ― once you make the change, you want to be sure it was the right one (or you get to do it again later!).
  • Communicate with the workforce. Tell them why and when things are going to happen. Left in an information vacuum, the workforce may perceive that the schedule change is arbitrary, or “management is out to get us”.
  • Actively seek input from the shift workers. Use a methodology that allows everyone to have input before the change takes place. Be careful not to pay a disproportionate amount of attention to the few individuals who claim to speak for everyone else. In most cases, they are speaking for themselves.

Consider these before introducing the new schedule

Once you know what the new schedule is going to be, it’s time to think about how you’re going to handle the following considerations:

  • How will current pay and work practices be affected? Mistakes are long-lived, even when corrected. Once you give something away, it’s difficult to take it back. Vacations, shift differentials, bereavement, and holidays are a few of the policies that will need to be reviewed.
  • When are you going to implement it? Small changes can be implemented quickly while major ones (e.g., going from 5 to 7 days of coverage) may require giving the workforce several weeks to prepare. Certain times of the year are better for implementation than others. For example, it is probably not a good idea to change schedules in the middle of the holiday season.
  • Resource assignment: who will be assigned to what shift? Skill balance and length of service are the types of issues that need to be considered. This is an especially “hot topic” for a fixed shift operation.
  • What will the overtime policies look like? Even if overtime levels remain unchanged with the new schedule, the distribution of the overtime may be different. For example, on an 8-hour schedule, overtime is typically worked by coming in before or staying after the normal shift; on a 12-hour schedule, overtime is usually worked on a day off.

Changing schedules can be a rough ride. That’s why a lot of companies decide not to proceed and may forego the potential business benefits of a schedule change – often measured in $M. If you and your management team are committed to making the change, follow the three principles and take the four considerations listed above into account. You’ll be glad you did, and so will the rest of the company. 

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.

Reducing Employee Turnover

A case study

Problem

This food processing company was experiencing severe problems with employee turnover. The underlying cause of this turnover problem was excessive overtime.

Located in a small town with several other labor-intensive companies, the company constantly competes for labor, often operating with less than a full complement of personnel. This staffing shortfall was resulting in substantial overtime which, in turn, created an even higher turnover. Overtime policies allowed senior employees to accept or decline overtime work as they saw fit. When the senior employees chose not to work overtime, the newer employees were forced to work tremendous amounts of overtime, especially during the undesirable periods (i.e. on weekends). The high overtime levels meant that new hires frequently worked long stretches of days in a row causing them to seek greener pastures.

Action

Employee preferences: Employees wanted predictability, a choice in the type of schedule they worked, and reasonable time off to spend with their families.

Business requirements: A business analysis indicated that considerable productivity improvement would be realized if most of the operation changed from a combination of high production on weekdays and limited production on weekends to moderate, steady production seven days a week.

Implementation: In the end, two schedules were implemented. One schedule was a traditional 5-day schedule using 8-hour shifts. The second schedule, used by half of the operation, was a 7-day shift schedule using 12-hour shifts.

Employees on the 7-day schedule were protected from working a scheduled weekend off. They also received about 10% more income and 78 more days off than those on the 5-day schedule.

Interestingly, the company had no problem filling the employee positions on the 7-day schedule. The increased predictability, income and number of days off actually made the 7-day schedule more popular than the 5-day schedule.

Results

After six months on the new schedule, the workforce was surveyed to provide a “before and after” picture. Using indices to measure performance, the change is shown below:

  1. Communication: +5.5%
  2. Management’s openness to workforce input: +13.8%
  3. Employees feeling that they are a part of the company: +11.9%
  4. General quality of work environment: +21.1%
  5. Facility rating relative to other companies in the area: +21.2%
  6. Schedule predictability: +40.6%
  7. Schedule flexibility: +47.5%

These improvements in employee perception pertaining to the company and the work environment resulted in a greater than 50% reduction in turnover.

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.

Are Maintenance Workers Really Different than Other Shiftworkers?

By Bruce Oliver and Dan Capshaw, Shiftwork Solutions LLC

Many maintenance managers will tell you their workforce is different than other shift workers — that their attitudes and behaviors are not the same. Recognizing, understanding, and accounting for how maintenance personnel evaluates shift schedules are essential to finding a schedule that will satisfy their needs and give you the required coverage to meet your business needs.

When it comes to shift schedules, what makes maintenance workers unique? Using our database of over 20,000 employee surveys, we compared the responses of maintenance personnel with those of the average shift worker surveyed. The database includes information on the following topics:

  • Demographics
  • Health and alertness
  • Working conditions
  • Shift schedule features
  • Overtime

Let’s look at the maintenance worker results for each of these categories and compare them to the overall shift worker results. If our assumption that maintenance workers are different is true, we should see some differences in the results.

Demographics

Almost 98% of the maintenance workers are male. This is a sharp contrast with other shift workers, 76% of whom are male. The maintenance field is clearly dominated by men. A graphic comparison of the two groups is shown in Figure 1.

Maintenance workers have worked 43% longer in their current department than the average shift worker (8.6 years for maintenance vs. 6.0 years for the average shift worker). Unlike production workers who can quickly learn a new job in another department such as quality control or the warehouse, maintenance workers tend to stay in their specialized trade. They usually are paid more and spend more time working weekday day-shifts, which also may influence their reluctance to transfer to other departments.

This finding has two important implications for maintenance workers:

  1. Maintenance personnel expects to stay in their jobs, possibly for their entire careers. If they are required to work on a schedule they don’t like, they may see little opportunity to correct the schedule. This makes the stakes and consequently the emotions high when alternative schedules are considered. In fact, the shift schedule is so important that a substantial percentage of maintenance workers said they will quit their jobs before changing to a new shift schedule (24.7%).
  2. Since maintenance skills are often transferable to other companies, maintenance workers are able to change jobs to another maintenance job in a different company. Losing people because of your schedule is expensive. Of course, this also means that an attractive schedule can be a very effective tool for recruiting and retaining the best maintenance personnel.

Health and Alertness

The opinions and preferences of maintenance workers and other shift workers are aligned when it comes to health and alertness. They have similar sleep patterns and habits (e.g. alarm clock usage and their hours of sleep while working various shifts are almost identical), and their self-reported alertness is similar.

Working Conditions

Maintenance workers also gave similar responses to those of the average shift worker on all facets of the work environment except the need for training. As shown in Figure 2, more maintenance personnel feel their employer doesn’t train nearly enough (65.8% from maintenance vs. 55.3% of the average shift workers). Maintenance employees are well aware that training can make their jobs faster and easier. They also often believe that more training for employees in other parts of the organization will reduce the number of breakdowns.

Shift Schedule Features

There were only a few schedule features where maintenance workers’ preferences differed from the average shift worker. As shown in Figure 3, a larger percentage of maintenance people prefer fixed shifts (88.3% from maintenance vs. 82.9% among all shift workers). Most maintenance workers are assigned to weekday day-shift since most preventative maintenance work is done during this time. Minimal staffing is needed for corrective maintenance on nights and weekends. The likelihood of maintenance workers getting the shift they want is pretty high, so it is understandable that more of them want fixed shifts.

Maintenance personnel gave lower ratings to the importance of keeping their current crew members together (maintenance = 3.11 vs. average shift worker = 3.71 on a 5-point scale where 1 is lowest and 5 is the highest possible rating). Unlike other job functions that require extensive teamwork, maintenance work is given to individuals or small groups. Maintenance work often requires a high degree of independence, making the individual team member composition less important than the team skill composition is to the success of the organization.

Overtime

One interesting difference noted between maintenance personnel and the average shift workers is their preference for time-off instead of overtime. When asked, “If you had to choose between more time-off or more overtime, what would you choose?” 70% of the maintenance workers said “More time-off” in contrast with 61.4% of the average shift workers. This is shown in Figure 4.

Maintenance personnel are paid more than other shift workers, so they are not as dependent on overtime. In addition, maintenance workers work most of their overtime on weekends, since many companies push the maintenance work to the weekends. Since weekends are the most desirable time off, it is not surprising that maintenance personnel will choose to have more time off instead of more overtime. To them, asking if you want more overtime is like asking if you want fewer weekends off.

Conclusions

The survey results reveal only a few differences between maintenance workers and the general shiftwork population. The most significant difference is the lack of mobility within a company coupled with the high mobility to move outside the company. Shift schedules are always important to shift workers, but if the only apparent choice to improve a schedule is to change companies, the importance to maintenance personnel is even greater. The nature of the job attracts strong, independent personalities, so when emotions run strong, discussions can be intense. This passionate response to schedule changes explains why so many managers perceive maintenance workers to be significantly different than other shift workers – even though their overall schedule preferences are very similar.

Since maintenance work can occur anywhere in the facility, maintenance workers have many opportunities to come in contact with employees from other departments. That puts them in a perfect position to support communications along the grapevine. It is therefore incumbent on the entire management team not only to be aware of the maintenance team’s differences but also to understand their unique and valuable roles in the organization and use shift schedules that work well for their maintenance team while still meeting their business needs.

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.

Considerations in Changing the Work Schedules of Non-Exempt Employees

by Bruce Oliver, Consultant, Shiftwork Solutions LLC (Republished with permission from the Society of Human Resource Management)

Organizations change the work schedules of their non-exempt employees for a variety of reasons:

  • Change the hours/days of operation to match the demand for their products or services.
  • Fix problems such as high absenteeism, hiring/retention issues, or excessive overtime.
  • Improve efficiency (e.g., lean manufacturing) or lower the operating costs.
  • Respond to employee requests for change or complaints about the current schedule.

Responsibility for gathering relevant information, identifying alternative schedule options, and implementing the new schedule is often given to the Human Resources (HR) manager. Since information on the subject is surprisingly scarce, this responsibility can be quite a challenge. It’s not something you do every day. Few people have the expertise to design a schedule for a group that works more than five days a week or more than one shift a day. Once you realize that schedule design is not the only step in changing schedules, nor the most difficult, you easily can be overwhelmed.

Despite the difficulty, this is a great opportunity for HR managers to orchestrate a significant change in the organization. As an HR manager, you are uniquely qualified to do this. You tend to have a broader perspective than line functions such as production or maintenance. You have more experience in communicating with employees. Your on-going role as a company steward has trained you to protect organizational interests while addressing employee concerns.

It is essential that you understand what is involved in changing work schedules. This paper provides a broad overview that will help you get started. Although every situation will have its own unique issues, as long as you address the following six considerations you will have a much better chance of reaching a successful outcome:

  • Change Process
  • Coverage requirements
  • Available resources
  • Schedule constraints
  • Employee preferences
  • Company policies

Change Process

In today’s tight labor market, organizations simply can’t afford to lose employees. Changing work schedules is an easy way to alienate the workforce and increase turnover. To ensure widespread support for the change, you need to have a plan for involving the key stakeholders and keeping them informed throughout the entire change process.

That sounds simple enough, but it’s actually the most difficult part of changing schedules. People are resistant to any kind of change. When it comes to work schedules, even a minor change can make a significant difference in employees’ lives. For example, changing the time that the work starts by 15 minutes may seem trivial, but it can have serious repercussions for people who commute in a carpool or use public transportation, parents with daycare requirements, and individuals with hundreds of other personal commitments built around their work schedules.

Key elements of the change process include:

• Prepare a clear business case. What are the reasons for the change? What are the consequences of not changing? Is the cost of changing less than the cost of not changing? A compelling justification can make a huge difference in garnering support.

• Identify key stakeholders. Who will be working on the new schedule? Who are the other interested parties? What types of concerns might they have? How might they benefit from a new schedule?

• Decide how to involve the stakeholders. How will the management team and the union be involved? How will employees participate? Which aspects of the new schedule are not open for debate? Should employees whose schedules may change at a later date be included at this time? Involving all key stakeholders whenever possible is critical to gaining widespread support for the change.

• Develop a communication plan. How will you explain the business case and its implications? How will you communicate progress: company-wide meetings, newsletters, bulletin boards, emails, the company web site, flyers, handouts, banners, crew meetings, or something else? Keeping employees updated throughout the process is essential.

• Announce the date of a schedule change. Will the change be made on a trial basis? If so, how long will it last? How will you decide whether to continue with the new schedule? When will other groups change? Establishing deadlines will demonstrate a commitment to change and alert employees who doubt that anything will happen.

Many larger organizations have found that the use of an outside facilitator is helpful in managing the change process. A neutral party helps to avoid the appearance that management is manipulating the workforce into doing something they don’t want to do. Finding an expert with broad experience in navigating the pitfalls associated with changing schedules will ensure a smooth implementation.

Coverage Requirements

How many employees do you need to show up at different times of the day? What skills do they need to have? Are these numbers the same all week? Answer this and you’ve defined your basic coverage requirements.

Determining the coverage requirements appears to be relatively straightforward for organizations with a workload that remains constant throughout the day and throughout the week. They need the same number of employees in each position to show up on every shift. In retail businesses, this is usually a function of the number of customer calls or visits. In service businesses, this is related to the number and types of service calls. In manufacturing, agriculture, construction, and mining, it may be related to the type of equipment, the number of machines, and/or the process followed.

Determining the coverage requirements for support organizations can be more difficult, however. If the business is changing from operating 5 days a week to 7 days, how does this affect the maintenance, warehousing and shipping groups? Do they need to work 7 days a week too? Each situation is different, so don’t overlook these other functions.

Organizations with variable workloads have a more challenging problem with their coverage requirements. Call centers, for example, may have a substantial increase in customer calls every evening. Retailers have more customer calls in the late afternoons, evenings and weekends. Manufacturers may have certain processes that run for only a few hours every day. These companies need to boost their coverage during the high workload periods to meet the demand.

Ideally, your schedule will match the number of employees with the workload throughout the day and throughout the week. You may be tempted to average the workload over an entire shift when it actually changes from hour to hour. Likewise, you may assume the workload stays the same each day of the week when it fluctuates from day to day. If the volume of work is excessive for just a few hours, employees and productivity/service levels will suffer. If the work volume is low, employees will be less productive or idle during this period of time. In either case, the business will incur unnecessary costs. Possible solutions include:

  • Schedules that have increased coverage on the busier shifts.
  • Schedules that have increased coverage on the busiest days of the week.
  • Different shift lengths to increase coverage when the shifts overlap.
  • Staggered shift start times to gradually change the coverage as each shift starts or ends.
  • Overlay shifts to add personnel during busy periods.

Available Resources

How many employees are needed to satisfy the coverage requirements? How many hours will they have to work each week? In addition to the base coverage, you need to consider absences such as vacations, illness, training, etc. Additional staff and / or overtime may be needed to cover these situations. Even though you think you have sufficient personnel, if a number of employees want to take a vacation at the same time, this could leave you short-handed. If someone takes a leave of absence due to health problems, pregnancy, or family care, you may not be able to replace them. The use of temporary employees may help, assuming you can find someone with the necessary skills.

Schedule Constraints

Schedule constraints include legal considerations (e.g., state laws requiring overtime to be paid after 8 hours of work) and union agreements (e.g., limits on the number of consecutive days worked). There are also company policies to consider. For example, your company may require that all employees rotate so they spend an equal amount of time on every shift.

These are referred to as “constraints” because they limit the number of possible schedules. If you need an 8-hour fixed shift schedule with a maximum of 5 days worked in a row, you’ll be hard-pressed to come up with a schedule that gives you a lot of weekends off or long breaks. Without the constraint on the number of consecutive days worked, you would have a lot more options to choose from. Without the fixed shift constraint, you would also have more choices. If there are too many constraints, it may be necessary to add more workers, increase overtime, or sacrifice some coverage.

Employee Preferences

There are several ways to identify the employee work schedule preferences. In smaller groups, it may be possible to simply show employees several different schedule options that satisfy the coverage requirements. This will generate a discussion of the good and bad aspects of each alternative, hopefully leading to an agreement on the “best” schedule for the group.

In larger organizations, gathering employee preferences is rarely this easy. Anonymous questionnaires may be required to ensure that everyone’s opinion is reflected, not just the more vocal employees. Multiple steps may be necessary to explain why the change is needed, ascertain general schedule preferences, identify and review possible options, and discuss the implications of each alternative. There are two things you should keep in mind when using this multi-step approach. First, avoid getting too specific early in the process. Second, take time to educate employees about new schedules.

If you initially ask employees what specific type of schedule they prefer, you may get something that isn’t practical or doesn’t meet the business requirements. For example, employees may select a 10-hour shift schedule, not realizing that this would boost the staffing requirements substantially and double the coverage for six hours every day while the shifts overlapped. It’s better to begin by asking the question in general terms, e.g., “Would you be willing to work long shifts in order to get more days off?” This will allow more flexibility in developing schedule options. It will also prevent employees from getting their hopes set on a schedule that is not appropriate for the business and the distribution of the workload.

Since employees may not be familiar with different types of work schedules, some education about schedules may be necessary. This step will open the door to more possibilities. It will also reduce the tendency of people who will immediately reject anything that differs substantially from the current schedule. For example, employees may not consider 12-hour shift schedules because they think the shifts are too long. However, once they realize they would get twice as many scheduled days off and up to half their weekends off, they may be more receptive.

Company Policies

Most companies start with pay policies that were originally designed for eight-hour, Monday through Friday schedules. The policies are usually designed to minimize costs for normal operations while providing premium compensation when the employees are asked to work outside of their regular schedule. They also provide an easily understood way to compensate the workforce for holidays, vacations, and other paid time-off.

When you change employee work schedules, you need to tailor your pay policies accordingly. If you don’t change, there is a good chance that the old policies will:

  • Increase in labor costs.
  • Be illogical, and therefore difficult to understand.
  • Appear to be unfair to different workgroups, lowering morale.
  • Create situations that take pay away from employees, and give them extra pay in others, usually resulting in even lower morale.

There are two points to keep in mind when matching pay policies with the new schedule. First, you should ensure that the workforce has the ability to make as much money on the new schedule (for the same hours of work) as they make on their current schedule. Second, you should protect the company from increased labor costs caused by the wrong pay policies.

Common problems that result from using old pay policies with new schedules are as follows:

  • Unbalanced workweeks. This results in overtime in some weeks, and less than 40 hours of work in others.
  • Vacation tracking and pay. Traditional vacation systems often track vacation time in days or weeks. This no longer works when a day is not eight hours long, or a week is not five workdays.
  • Holiday pay policies. This is one of the most difficult issues to solve and explain to the workforce. You need to answer questions such as: How do you handle holiday pay if an employee was not scheduled to work on that holiday? Should they be paid for eight hours, or the number of hours they are scheduled to work?
  • Double-time. Old policies usually result in either the employee losing the double-time opportunities they had in the past, or significantly increasing double-time costs to the company.
  • Overtime and absence coverage. How do you cover an absence if you are working 12-hour shifts? How do you distribute overtime fairly?
  • Breaks, lunches, shift differential, attendance systems, meal pay, shift assignment, overtime distribution, and many other policies can also come into play when you change schedules.

Summary

Changing employee work schedules is not a simple task. There is a lot more involved than simply finding a work pattern that matches the new hours of operation or accommodates a preferred shift length. The six major considerations are the change process, coverage requirements, available resources, schedule constraints, employee preferences, and company policies. Skipping any one of these can result in implementation delays, unhappy employees, damage to your relationship with workers and the union (if you have one), poor business results, and higher costs. However, with proper planning, preparation, and communication, it is possible to produce a win-win result for employees and the organization.

Changing your organization’s work schedules may be one of the most important tasks you undertake in your career. Not only is the schedule vital to the performance of your company, but it is also an integral part of your employees’ lives. The time and effort you invest will increase the chances of achieving a positive outcome for everyone affected by the new schedule.

Call or text us today at (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

Best Practices in Shift Work Operations (Part 2 of 10)

Operators and Sanitors should be the same people.  The sanitation process associate with all food manufacturing processes is often a time-thief.  It takes away from valuable production time. Many such operations will have a separate sanitation crew that specializes in sanitation but is not skilled or staffed to run the lines.  This has two negative impacts.  First, the sanitation crew needs a regular schedule, and this is often accommodated by shutting down for an entire shift to let them come in and do their job.  In such cases, it is possible to complete the sanitation process in a partial shift but is metered across an entire shift by using fewer sanitors.  The result is that they may be sanitizing about only 16 hours of runtime when they could run 24 or 40 hours or more without needing to sanitize.  The second negative impact is that if sanitation finishes early, there are no operators present to run the equipment; lines sit idle until the next shift starts.  If operators are sanitors, you can run for as long as you want as there is no longer a designated sanitation shift.  Also, when sanitation is needed, you can perform using an entire production crew and then start right back up immediately.

Do not overstaff.  From a labor cost perspective, there is only one number that matters – Adverse Cost. This is the additional cost you pay for not being perfectly staffed.  If you are perfectly staffed, this cost is zero.  If you are understaffed and have to pay overtime, the Adverse Cost is the difference between your lowest cost option (paid when perfectly staffed) and the cost of overtime.  Since overtime is about 5% to 10% more costly than straight time, your adverse cost is at extra 5% to 10% you had to pay because you were understaffed.  If you are overstaffed, the Adverse Cost is 100% of the cost of that labor since the perfect staffing would have been zero as the position need not have been filled at all.  Thus, the cost of overstaffing can be an order of magnitude greater than the cost of understaffing.

Listen carefully for the term “unfair”.  This word has a far different connotation than say, “I am unhappy.”  When an employee says, “unfair” they are starting to take a particular circumstance and making it personal.  People will complain if they are unhappy.  They will quit if they feel they are being treated unfairly.

Perception matters more than reality.  People respond to conditions as they believe them to exist.  Whether they exist or not is unimportant.  Pay is a good example of this.  If employees are the best paid in the area and have the best compensation package around, they will still perform as if they are underpaid if they believe they are underpaid.  In other words, they will underperform because of perception.  The cure for this is open communications. 

20% of your workforce will work all the overtime you can give them.  This is an extremely useful fact.  So many companies struggle with overtime; generally having to pass out more than the workforce is willing to take on.  However, if you have a fixed amount of overtime and can funnel it to people that want it, you will end up forcing less on those that don’t.  It’s often a tendency to think that complaints about too much overtime means that everyone is complaining.  Knowing this is not the case will allow you to temper your response by taking action to lower overall overtime without eliminating it. High overtime employees have a symbiotic relationship with a company.  The company provides the overtime hours and the employee gladly provides the needed coverage.  It will serve you well to keep these high overtime employees satisfied so they are there when you need them.

This is continued from Part 1 of Best Practices.

Call Us and find out how we can help you optimize your shift work architecture.

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.

Best Practices in Shiftwork Operations (part 1 of 10)

Whenever we meet with a leadership team at a facility, the question always comes up, “What are other sites doing that works?” The second most asked question is, “What are other sites doing that doesn’t work?”

Operations managers want to hear the answers with regards to other operations while Human Resource managers want the answers with regards to employee issues. In short, they are looking for Best Practices. To address this area of interest, we are creating a 10-part series on Best Practices in Shiftwork Operations. This is the first installment.

  1. Avoid rotating shifts.  If you want to chase away potential employees, tell them you have rotating shifts.  More than 80% of all shift workers prefer fixed shifts.  More than 60% of all shift workers want fixed shifts even if they know that they won’t be assigned to their favorite shift.
  2. Don’t start earlier than 6:00 am.  Our research has shown that starting an hour earlier than 6:00 will result in 20 minutes less sleep per night.  In other words, if shift workers have to get up earlier, they go to be earlier, but by a smaller amount and thus, shorten their sleep period.
  3. Pay 10% to 15% shift differential for non-day shifts.  A shift differential is an incentive to get people to work a shift they would normally avoid.  The smaller the differential, the fewer people you will get that voluntarily work a non-preferred shift.  The shift differential paid by a neighboring facility is unimportant.  You are not competing with them for labor.  You are competing with your very own Day shift for Nightshift labor.
  4. Don’t pay weekend premiums.  Linking premium wages to a day of the week will lock you into paying premium wages for those days – forever.  Instead, link premium wages to consecutive days of work or total hours worked.  You have control over those.  You can lower overtime by hiring and thus, reduce premium wages.  No matter how many people you hire, if you now pay a premium wage for Sunday, for example, you will continue to pay premium wages for Sunday.
  5. Don’t use a weekend crew.  A weekend crew with fall under one of the following 2 groups, neither of which is sustainable: (1) Pay for weekend people is proportional to hours worked.  Since they work fewer hours, they get less pay.  This will result in a high turnover within weekend crews.  Low skill levels, high absenteeism, and low company loyalty are typical characteristics. (2)  Pay full wages and benefits to people only working partial weekly hours (typically 24 weekend hours).  This will get your skilled people to the weekend but it will increase overall labor costs by as much as 25% since it will now take 5 crews instead of 4 crews to staff a 24/7 operation.

Call or text us today at (415) 858-8585 to discuss your operations and how we can help you transform your work environment. Or, complete our contact form and we will call you.

5 Things Human Resource Managers Need to Know About Shift Work

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 some of the most important aspects of shift work that seem obvious but are easily overlooked.

So, let’s get to the list…

#1: Beware of the lone messenger.  No one is going to come to H.R. to tell you how much they like the schedule they are currently working on.  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 outnumber 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:  Your company is different from other companies.  What the average shiftworker 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 shift worker likes and doesn’t like; and yet…I have never met an average shift worker.  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: Know who your stakeholders are.  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: The impact of Shift Schedules can be far-reaching.  Recruiting and retention of skilled employees are always affected by the shift schedule being used.  Supervision, absenteeism, vacancy coverage and overtime will also be impacted.

#5: Managing the change to a new schedule: when it comes to DOING it, HOW is as important as WHAT, WHY, WHERE and WHO.  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.

For conscientious HR leaders, to whom employee engagement is a strategic priority, Shiftwork Solutions LLC will help improve retention and work-life balance. Shiftwork Solutions LLC is a change leader, known for maximizing employee engagement with the insights of its comprehensive employee surveys ― deployed in a managed transition process. Our solutions promise to attract and retain a skilled workforce into a custom-designed schedule. Employees will feel valued and will be instrumental in delivering on growth targets.

Call or text us (415) 858-8585.

When should Management consider a Shift Schedule Unsustainable?

Most production managers have been there. Demand is higher than their ability to supply ― without the use of overtime.  The logical, and possibly, the best solution in the short-run is to go ahead and produce more by using overtime hours.

What is going on when you ramp up overtime?  What are the costs?  What are the benefits?  Most importantly, if using more overtime is a good decision now, is it still a good decision going forward?  In other words, are the cost-to-benefit rewards consistent over time?

The benefits in the short run should be clear – you are meeting the demands of your customers. Furthermore, you are doing so without additional capital and at only a small inconvenience to your employees. The cost of such an action, using overtime, is minimal.  The actual labor cost of a fully-loaded straight time hour and an hour of labor paid at the overtime rate are probably comparable.  The workforce is likely to tolerate a reasonable amount of overtime.  In fact, our database indicates that you should expect about 20% of your workforce will take all the overtime they can get.

What about the long run?  What happens if you start running your operations every Saturday instead of just a few?  What happens when you start running through the weekend?  In other words, your employees work Monday – Friday, then they work the weekend and then, they work Monday – Friday again. That’s twelve days in a row!

Business leaders recognize occasional overtime is not a problem but they are equally certain that overwhelming overtime is.  The question becomes, “When are you going to do something about this?”  When have you crossed the line from “Overtime is Reasonable” to “Overtime is Out of Control?”  This line can be fuzzy when you cross it but looking back, you will see that you are on the wrong side and possibly have been for some time.

Expect these things to happen as your schedule ― packed with overtime ― becomes unsustainable:

  1. Employees will begin to complain about never having a day off
  2. Absenteeism will begin to go up as employees find ways to get time off and have plenty of overtime income to finance missed work
  3. Recruiting new employees into a high overtime schedule will be difficult
  4. Turnover will increase as your employees seek “greener pastures”
  5. Quality will begin to suffer as sleep deprivation begins to affect performance
  6. Productivity per labor hour will drop
  7. Safety incidents will begin to rise
  8. Labor costs go up as performance per labor hour drops
  9. First level supervision will become less supportive of management goals as their overtime goes up in parallel with their workers
  10. Total productivity begins to drop as the workforce tires and vacancies become difficult to fill
  11. A significant portion of the workforce will begin to rely on their overtime to make ends meet, making them resistant to lowering overtime levels

The above symptoms tend to blossom as time goes by and are often ignored in their infancy.  (This is understandable as the very genesis of the situation is one where you are scrambling to find a way to meet your production numbers. You had higher priorities.) Eventually, a shift schedule, inundated with overtime, will reach the point when you ask yourself, “How much longer can we keep this up without creating new problems?” (Points 1-10.)  This is when you realize that your current shift schedule is unsustainable.  Yes, you can hold it together with “duct tape” solutions, but you can never make it do well what it was not intended to do.

If you resort to replacing overtime hours with straight time hours (hiring more people) but you don’t change your schedule, you will end up overstaffing where you already have coverage ― while adding no new hires where you currently have no staffing.  Labor costs will go up and high overtime will remain unaffected.  In short, you added straight time hours but the hours didn’t land where you needed them to.

If you want to reduce overtime without overstaffing you need a new schedule.  

At Shiftwork Solutions, we create custom-designed schedules that enable business leaders to increase production, attract a skilled workforce and keep costs under control. Our data-driven processes, communication centered approach and project execution bring about the changes needed to improve business operations and production output, reduce per-unit costs, all while creating an environment where workers feel empowered to help the organization achieve its goals.  Our experts bring in best practices from wide-ranging industries with complex operations to tailor solutions for specific operational needs. Call or text now at  (415) 858-8585.