In my last 2 posts, I recommended using the following criteria to ensure a comprehensive approach to the schedule selection process:  (1) effectiveness, (2) efficiency, (3) sleep, and (4) employee satisfaction. This post will cover the second criterion - efficiency. 

Efficiency indicates how well the schedule utilizes the organization's labor resources, i.e. employee wages, benefits and overtime. The most efficient schedule will consume the fewest labor resources. The following questions should help you to determine a schedule's efficiency: 

1. How many employees are needed?

2. What is their average wage rate?  

3. How many hours a week do they work on average to provide the basic coverage?  

4. What is the value of the benefits they receive as a percent of wages?  

5. What is the absence rate (expressed as a percentage of the hours for basic coverage?
  

Here's an example. Suppose an organization needs steady two-person coverage on a 24/7 basis. The average wage rate is $15 an hour. The cost of employee benefits (holidays, vacation, insurance, 401K, etc.) is 40% of the wages. The average absence rate is 8%
of the normal labor hours.

Option #1. This option uses 8 employees working an average of 42 hours a week. All absences would be covered by using overtime.

8 employees * 40 hours/week * $15/hour * 1.40 for benefits = $6,720/week

8 employees * 2 hours OT/week * $15/hour * 1.5 OT premium = $360/week

8 employees * 42 hours/week * 0.08 absences * $15/hour * 1.5 OT premium = $605/week

TOTAL COST = $6,720 + $360 + $605 = $7,685

Option #2. This option uses 9 employees working an average of 42 hours a week. A week of relief coverage would be built into a 9-week schedule which should be adequate to cover most of the absences.

9 employees * 40 hours/week * $15/hour * 1.40 for benefits = $7,560/week

9 employees * 2 hours OT/week * $15/hour * 1.5 OT premium = $405/week

TOTAL COST = $7,560 + $405 = $7,965

 Option #3. This option uses 11 employees working an average of 40 hours a week. The extra coverage will eliminate the need for built-in overtime. It will also eliminate the need to use overtime for absences 4 days a week. Absences on the remaining 3 days will require overtime.

11 employees * 40 hours/week * $15/hour * 1.40 for benefits = $9,240/week

11 employees * 40 hours/week *$15/hour * 0.08 absences * 3/7 uncovered days * 1.5 OT premium = $339

TOTAL COST = $9,240 + $339 = $9,579

Option #1, which uses 8 employees working an average of 42 hours a week plus additional overtime to cover absences, is the most efficient of the three approaches since it has the lowest cost.