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Employee Work Schedules for Retail and Service Businesses
July 21st, 2015 at 3:22 pm   starstarstarstarstar      

Many retail and service businesses have found it necessary to stay open longer than 8 hours a day and more than 5 days a week. Examples of retailers include apparel, sporting goods, building supplies, household items, jewelers, stationers, and variety stores. Examples of service businesses include dry cleaners, pharmacies, auto repair, dentists, optometrists, and barbers/hair salons.


Reasons for expanding the hours of operation include the following:

  • Competition. Once a competitor changes its hours of operation, other local companies in that same line of business are pressured to do the same.
  • Customers. Longer hours expose a business to more prospects, which can increase sales. It also makes it more convenient for existing customers, which means more repeat business
  • Facilities. When the space or equipment is fully utilized, it's cheaper to increase the hours of operation than it is to rent a larger office/shop or to purchase more/larger machinery.

There are three factors that the business owners should consider when creating work schedules for the employees:

  • Coverage. What is the most effective way to match the number of people at work with the workload variations?
  • Cost. What is the most efficient way to staff and schedule the employees?
  • Satisfaction. Which approach will the employees prefer?

I've discussed these criteria previously, but only in the context of continuous 24/7 operations. Here's a link to the original article: http://www.shift-schedule design.com/Shift_Schedule_Design_for_Dummies. In this post, we will take a closer look at each factor from the perspective of businesses that are less than 24/7.

 

Coverage

Once a company selects its new hours of operation, it should estimate the workload by hour of the day and by day of the week. The best way to do this is to gather historical data using measures such as:

  • Number of jobs or appointments
  • Number of in-bound phone calls
  • Number of customer visits
  • Number of out-bound service calls

Since some calls or visits require more time and effort than others, it might be necessary to classify them into 2 or 3 categories. Each category can be weighted differently to adjust for the time required by employees. A table of the weighted data can help in the selection of shift lengths and coverage on each shift. An example is shown below. Note that Category 2 work takes twice as long at Category 1 work so it counts double in the total work volume.


Days                            Time                        Category 1                  Category 2           Total

Mon-Fri                0800 to 1200                       50                                    4                          58

Mon-Fri                1200 to 1600                       70                                    8                          86

Mon-Fri                1600 to 2000                       85                                   10                       105

Sat                       0800 to 1200                       70                                    9                          88

Sat                       1200 to 1400                       81                                    7                          95

Sat                       1400 to 1700                       92                                    5                        102


As you can see, the volume of work is not constant throughout the hours of operation. It varies by time of day and day of the week. Let's take a closer look at each of these two types of workload fluctuations.


Hourly Variations
. With this type of fluctuation, the volume of work changes by time of day. For example, the evenings are often busier than the rest of the day in many retail stores. The three typical ways to address these hourly workload variations are:

  • Staggered start times
  • Part-time employees that work shifts shorter than 8 hours
  • Multiple shifts that overlap one another

Since there are so many different situations, I'll try to give a simple example of each approach.


Example #1. An independent auto repair shop is open from 7 a.m. to 6 p.m. It opens early because the owner wants to avoid commuter traffic. Most customers don't drop off their cars until 8 or 9 a.m., so he starts one mechanic at 8 a.m. and another at 9 a.m. The first mechanic leaves at 4:30 p.m. and the second leaves at 5:30 p.m. The owner stays until 6:00 p.m. to accommodate customers picking up their vehicles after work. The staggered work hours not only extend the coverage to 11 hours a day, but they also match the coverage with the workload.


Example #2. A store that sells bicycles is open from 9 a.m. to 7 p.m. They are busiest from 4 p.m. to 7 p.m. To match the coverage with this workload distribution, they have a 10-hour shift staffed by full-time employees plus a 3-hour shift (from 1600 to 1900) staffed by part-time employees (mostly students).


Example #3. A beauty salon is open from 9 a.m. to 9 p.m. Their busiest time of day is in the afternoon from 3 p.m. to 5 p.m. They match this workload distribution by using two 8-hour shifts (0900 to 1700 and 1300 to 2100). The shifts overlap from 1 p.m. to 5 p.m. This overlap is a little longer than necessary, but it allows the company to only use full-time employees who want to work 8-hour shifts.


Daily Variations. With this type of fluctuation, the volume of work changes throughout the week. For example, many businesses that deal with the public are busier on the weekends than they are on weekdays when people are at work. The two typical ways to address daily work variations are:

  • Weekend crews
  • Custom-designed work patterns

As with the hourly variations, there are too many possibilities to cover them all, so I'll just give one example of each approach.


Example #4. A stationery store is open every day of the week. The workload is fairly light on weekdays and busier on the weekends. The owner works by himself Mon-Fri. He employs several part-time people to work the weekend shifts. It's easier for him to find people to work weekends since this is usually a second job for them. Plus it gives him the weekends off. The downside, of course, is that the manager is unavailable to supervise the part-time employees. He or she is also unavailable when the store is busiest.


Example #5. A pharmacy is open every day of the week. They tracked the volume of prescriptions filled by day of the week. Wed, Thu and Fri have almost 50% more prescriptions than other days of the week. Weekends are the lightest, whereas Mon and Tue are average. The pharmacy employs 3 full-time pharmacists. All 3 pharmacists work the 3 busy days. Only one pharmacist works on Saturday and Sunday. Two pharmacists work on Mon and Tue.


Cost

Small business owners are especially concerned with keeping costs at a minimum. That's why it's important to compare the cost of different staffing/scheduling approaches before picking one. I'll try to illustrate how to do this.


This example is a retail store that is open from 10 a.m. to 6 p.m. Mon – Sun. Using data on the number of customer visits by hour of the day over the past year, the manager established the following coverage requirements:


Mon-Sun             1000 to 1500       2 people per hour

Mon-Sun             1500 to 1800       3 people per hour


Approach #1. This approach emphasizes the use of full-time employees supplemented by part-timers. There are 3 full-time employees that provide 2-person coverage throughout the week using 8-hour shifts. There are 3 part-time employees that are used to boost the coverage from 3 – 6 p.m. The total cost is calculated below:


3 FT employees * 40 hours/week * $12/hour wages * 1.4 cost of benefits = $2,520 per week

PT employees * 21 hours/week (average) * $10/hour wages = $210 per week (note that it doesn't matter how many part-time employees are used; it's only the total hours per week that's important)

The total cost is $2,730 per week.


Approach #2. This approach emphasizes the use of part-time employees with two full-time employees who will supervise the part-timers. The total cost is calculated below:


2 supervisors* 40 hours/week * $15/hour wages * 1.5 cost of benefits = $1,800 (note that the supervisors' time counts toward the coverage requirements)

PT employees * 53 hours/week * $10/hour wages = $530 per week (note that it doesn't matter how many part-time employees are used; it's only the total hours per week that's important)

The total cost is $2,330 per week.


Based on cost alone, Approach #2 (supervisors + part-time workers) is the best. The owner has to balance the cost savings with the time the manager will spend hiring and training the constant turnover of part-time employees. Although using part-time employees often is the least expensive approach, other considerations may override this.

 

Employee Satisfaction

Although employee satisfaction is important, it should never be the starting point in the search for a new schedule. I can't count the number of times I've been contacted by managers who selected the hours of operation to justify a shift length that he or she thought employees would like better than 8-hour shifts. They often forget that longer shifts will either increase the staffing requirements or reduce the available coverage.


For example, I had a manager of a business that ran 16 hours a day (two fixed 8-hour shifts) for 7 days a week. They needed 2-person coverage. They used 6 employees working an average of 37.33 hours/week. The manager said the employees were unhappy with the schedule, so he was thinking about changing to two 10-hour shifts.


The problem with two fixed 10-hour shifts with 2-person coverage is that it would require 8 employees or the coverage would drop to 1 person for 2 days a week on each shift. The manager forgot that the extra 2 hours a day for the 10-hour shifts would increase the hours of coverage by 25%.


In most cases, shift length is not left up to employees since this is more or less defined by the hours of operation or the hours in which overlapping shifts are needed. So the choice for employees usually boils down to the preferred work pattern. Here are a couple of examples.


Example #6. A hardware store needs 4 sales people on a 10-hour shift every day of the week. This requires 7 employees working 40 hours a week. To reward the most senior employees, the manager lets them bid on the days they work. He creates two schedule options:

  • Option #1. This schedule has 4 consecutive days of work followed by 3 consecutive days off. The downside to this schedule is that only 2 of the 7 will get both Sat and Sun off.
  • Option #2. This schedule allows 3 of the 7 to get both Sat and Sun off. However, not all of the schedules feature consecutive days of work.

Example #7. An appliance repair center needs 5 people on an 8-hour shift every day of the week. This requires 7 employees working 40 hours a week. The manager creates two schedule options:

  • Option #1. This schedule requires employees to work 7 days in a row. The employees get 2 weekends off every 7 weeks. One weekend off is 3 days and the other is 5 days. All the other breaks at 2 days.
  • Option #2. This schedule requires employees to work 2 to 4 days in a row. The employees get 2 weekends off every 7 weeks. Both are only 2 days off. The other breaks are only 1 or 2 days.

In both examples, the employees are shown the two schedules. They discuss the options, particularly the pros and cons. They then vote on the option they prefer. This forces them to make tradeoffs. In Example #6, they must choose the increased likelihood of getting a weekend off. In Example #7, they must choose between more consecutive days of work with longer breaks vs. fewer consecutive days of work with shorter breaks.

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