What is the "best" schedule?
If your group needs a new shift schedule, you naturally want to find the best possible schedule. But how do you know what's best? And how do you come up with options for the group to consider?
Let's start by exploring three things a good schedule must do: (1) optimize the coverage, (2) minimize the labor costs, and (3) maximize employee satisfaction.
The primary reason for having a schedule is to deploy the staff as effectively as possible. Generally, this means consistently matching the coverage (i.e. the number of people at work) with the workload.
The first step is to find an indicator that reflects the volume of work at different times of the day. For manufacturing, it might be production levels. For call centers, it might be the number of inbound calls. For retailers, it might be the number of people entering the store.
You'll want to collect this data by hour of the day for each day of the week. You can average the results for the past 12 months. If the work volumes vary by season, you'll need to calculate the average for each period separately.
The next step is to determine the coverage requirements. Some organizations use industry standards while some use historical experience to decide how many people are needed to handle the volume of work at different times of the day and on different days of the week.
If the work volumes are relatively constant, you'll want a schedule that produces level coverage, e.g., 3 people scheduled to work on each shift. If the workload varies on a regular basis, the coverage should vary in a similar fashion, e.g., 3 people from 7 a.m. to 7 p.m. and 2 people from 7 p.m. to 7 a.m.
Once you've established the minimum coverage requirements, the next step is determine which shift length or combination of shift lengths fits best. Let's look at a couple of simple examples:
Obviously, this can get a lot more complicated than these three simple examples. Call centers and airports often have coverage requirements that vary by hour of the day, with different patterns each day of the week. They may need multiple shift lengths with staggered shift start times. They also may have to slightly over-staff for one or two hours to enable the use of traditional shift lengths. For more information on dealing with a highly variable workload, please see: http://www.shift-schedule-design.com/Variable_Workloads.
Here are the most common issues I've encountered regarding coverage requirements:
The common theme here is selecting a shift schedule because it has a desirable shift length or work pattern without consideration of the work volumes. This may be tempting, but it's not going to optimize the coverage. The search for a new schedule must begin by examining the group's workload distribution. Is it truly constant? If not, how does it vary throughout the day and throughout the week. A solid understanding of the coverage requirements should be the starting point for all schedule design efforts.
Labor costs are comprised on the following elements: (1) number of employees, (2) wage rates, (3) benefit costs, (4) average hours of work, and (5) overtime. For scheduling purposes, wage rates and benefit costs are essentially fixed, whereas the other three components are not.
Number of employees, average work hours, and overtime are basically substitutes for one another. Increase the staff size and one or both of the other two elements will go down. Increase the average hours of work and staff size and/or overtime will go down.
Costs cannot be minimized if you focus on one component and ignore the other two. Here are two examples:
1. If you eliminate overtime from the schedule (i.e. reduce the average work hours), you may need a larger staff and more overtime to cover absences. I have discussed this previously, e.g., http://www.shift-schedule-design.com/Overtime_Issues and http://www.shift-schedule-design.com/Blog?m8:post=24-7-schedules-with-no-built-in-overtime, so please check out these articles for more information.
2. If you reduce the overtime needed to cover absences, this may require a larger staff and more overtime in the schedule itself. I have addressed this topic previously (http://www.shift-schedule-design.com/Blog?m8:post=how-to-cover-absences), so you may wish to read this post too.
Let's look at three examples of calculating the labor costs. 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 LABOR COST = $6,720 + $360 + $605 = $7,685/week
Option #2. This option uses 9 employees working an average of 42 hours a week. One full 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 LABOR COST = $7,560 + $405 = $7,965/week
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 LABOR COST = $9,240 + $339 = $9,579/week
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. Interestingly, the schedule with no overtime (Option #3) is much more expensive than the other two approaches. If the organization already has 9 employees, they probably should choose option #2 since this would reduce or eliminate the need to use mandatory overtime to cover any absences.
Surveys of shift workers rate the importance of different schedule features:
You’ll notice that several of these features are related to different aspects of time-off. The primary way to improve time-off is to adopt longer shifts. This will increase the total days off and the number of weekends off. It also may allow the creation of longer breaks, i.e. more consecutive days off.
Although this gives you a feel for you what the average shift worker wants from his or her schedule, how do you know what will satisfy your employees? I’ve outlined a process that you can read here: http://www.shift-schedule-design.com/Schedule_Selection_Process. Basically you show them different scheduling options and let them vote on the ones they like best. The key points are to involve them in selection process as often as possible and give them multiple options so they can compare different approaches and patterns.
Many organizations adopt a work pattern (e.g., 6-on-3-off or 4-on-2-off) they copied from another group or found for free on the Internet. They show it to the employees, who think it's great. The problem is that the new schedule may have been intended for a different pay week. Sometimes this can result in the loss of maximum weekends off (see http://www.shift-schedule-design.com/Blog?m8:post=the-importance-of-pay-weeks).
Now that you understand the three key features of a good shift schedule, you probably want to know how you can use them to come up with the best possible schedule for your group. Here's an outline of the schedule design process that we follow along with a simple example to illustrate the steps:
Crew / Week Mon Tue Wed Thu Fri Sat Sun Hours
A / Week 1 - D10 D10 D10 D10 - - 40
B / Week 2 e6 e6 e6 - - D10 D10 38
C / Week 3 D10 - - e6 e6 e6 e6 34
Key: Crew Size = 4 Average 37.3
D10 = 10-hour day shift (0900 to 1900)
e6 = 6-hour evening shift (1500 to 2100)
The way the schedule works is that Crew A begins in Week 1 of the schedule. When they finish that first week, they drop down to the second week of the schedule. When they finish the second week, they drop down to the third week of the schedule. When they finish that third week, they go back to Week 1 and start the 3-week cycle over again. All three crews are working the same schedule. They are just in different weeks.
Unfortunately, many people approach this process in reverse. They start by picking a shift length and work pattern first. For example, “We want a 12-hour DuPont schedule, so our employees will get a one week break every month.” They don’t consider the fact that they have 7 employees (which will result in inconsistent coverage since the DuPont pattern is designed for 4 crews) or that they don’t need as much coverage on the weekends (whereas the pattern is intended to provide the same coverage every day of the week).
Conclusions
We have discussed the three major components of a good schedule: (1) optimized coverage, (2) minimal labor costs, and (3) maximum employee satisfaction. We also showed the four steps involved in designing the schedule: (1) work volumes, (2) coverage requirements, (3) shift length, and (4) work patterns. Skipping steps or working in reverse most likely will result in the adoption of an inappropriate or costly schedule.
The thing that's most distressing is that many people are unaware of these points and thus end up adopting inferior schedules. They may even brag about how great their schedule is, when in reality they could have saved a ton of money, improved the coverage, and/or increased employee satisfaction with a different schedule. If you want to find the best possible schedule, and you want to choose from multiple approaches and patterns, contact us today.