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.Ă‚  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.

How will a new schedule impact your Employee Handbook?

Measure twice, cut once.

This adage is as applicable to a schedule change as it is for those in the carpentry trade.

Make one mistake and either be prepared to live with it or face the uphill battle of yet making another major change to your workplace.

There are all types of pitfalls.  You can put in the wrong schedule (yes, not all schedules are the same).  You can alienate a section of your workforce.  You can use the wrong staffing model.  You can overlook an opportunity.  Or you can put in the wrong policies.

This last mistake, the “policy” mistake is a big one.

Let’s take a look at a going from a 5-day schedule to a 7-day schedule.

To begin with, you will need “process” policies. The workforce will want to know “how” you are going to do things.  How will you decide who goes to what shift?  How will you pick the shift times?  How will you pick the schedule?  Does seniority count more than skills?  Should temporary employees participate?  Will there be a trial period?  This is a list that can seemingly go on forever.

Once the schedule is in place, will you have policies ready to support it?

If your answer is “Yes, our 5-day policies will work on a 7-day schedule,” then the answer is “No” your policies are not ready to go.

You will need to look at the following, at a minimum:

  • Overtime pay
  • Holiday pay, Holiday premiums, Recognized Holidays
  • Shift Differentials
  • Breaks
  • Jury Duty
  • Partial vacations
  • Vacations
  • Overtime coverage
  • Training
  • Shift Swaps
  • Absentee coverage
  • Attendance policy
  • Pay week hours
  • Payroll system settings

Let’s just take a look at vacation; possibly the simplest policy to address.  If you go to a 12-hour schedule, will employees still be able to take off full weeks or will they change to blocks of days?  Will they be able to take single days off and how much will their account be charged when they do and how much will they be paid?  Will vacation count towards hours worked for overtime calculations?  Can they carry over or sell back time at the end of the year?  Suppose they have some vacation left but not enough to take a week or even a full day off, what do they do?  Can they combine vacation time with other types of PTO?  Suppose I am on vacation (12-hour shifts) and a holiday falls during my time off, will I get 8 hours or 12 hours of pay?

Be ready to address your policies ahead of time if you want to have a successful transition.  They should be ready to go before the change takes place.  Remember to get your IT people involved as well.

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