Reduce unneeded overtime; create a more flexible workforce;
and match labour to customer demand. These are the challenges
that face modern management as companies seek to reduce the
amount they spend on labour, while at the same time try to
increase the quality of their service to customers and clients.
In grappling with this dilemma, many companies are looking
at the ways in which they schedule their employees for solutions.
This concept, sometimes called "labour optimization," is
an attempt by companies to use sophisticated new software
that lets them forecast their labour needs and coordinate
their scheduling around the data surmised.
In a retail setting, for example, companies are using labour
optimization to plan their schedules so that they can be
adequately staffed when customers need them, and not
over-staffed when
there are few customers around. While retail is perhaps the
largest industry participating in this growing trend, many
companies in industries such as banking, transportation,
manufacturing, and healthcare are also modifying and
improving upon the way
that they schedule their employees. Managing labour costs is a concern for any company; particularly
as changing business conditions are forcing companies to innovate
the way that they manage “human capital.” At the
same time, new technologies are enabling companies to schedule
their employees more efficiently, and with greater flexibility.
The technological advances now available in this realm were
highlighted in a recent study by IBM. As the study notes, although
various software programs can be tailored to specific industry
settings, many have a core set of abilities and functions,
including to:
1) Forecast demand for services using historical data
2) Create work schedules that balance workload against employee
availability, skill sets, shift flexibility, costs and service
level requirements
3) Assign employees to schedules, incorporating employee preferences,
bidding and shift trading
4) Provide real-time information that enables supervisors and
analysts to assess and monitor schedules
5) Provide managers and employees with self-service access
to schedules and the ability to submit preferences
6) Develop “what-if” scenarios to model changes
in demand, labour rates or service level impact.
Many of these labour-scheduling applications can be integrated
with other company systems, such as time and attendance, and
payroll and skills management to provide a company with a more
complete understanding of the “availability and cost
of its human capitol.” Software companies such as Workbrain,
Kronos and CyberShift Inc. have created scheduling-optimization
systems that integrate data ranging from the number of in-store
customers at certain hours to the average time it takes to
sell a product, and help predict how many workers will be needed
at any given hour.
Yet despite the available technology, most companies have
not taken the initiative to upgrade their labour-scheduling
systems.
In a 2005 study of the retail industry, the Aberdeen Group
(a technology consulting company) found that only 14 percent
of companies used an automated labour-scheduling system to
forecast their upcoming labour demands. According to the
study, 36% of
organizations used spreadsheets alone to do their labour scheduling,
and a staggering 20 percent were still on a paper or whiteboard
system.
The reasons given by organizations for not upgrading their
labour-scheduling systems ranged from: competing IT priorities;
the assertion that existing labour-scheduling systems were already “good
enough”; and problems integrating systems with older
ones.
Yet, in an economy that is becoming increasingly more service-based,
companies are seeking ways to differentiate their services
from their competitors, and staffing and scheduling issues
are (for better or for worse) an integral part of this effort.
According the Wall Street Journal, “Staffing is the latest
arena in which companies are trying to wring costs and attain
new efficiencies.”
Case Study: Wal-Mart’s
Flexible Work Schedules
Wal-Mart, the largest private employer in the US, caught
media attention recently when it announced that it would
start to use a new computerized scheduling system this year,
moving many of its 1.3 million workers from “predictable” shift
scheduling to a system based on the number of customers in
stores at any given time. As stated in the Wall Street Journal,
this change promises “greater productivity and customer
satisfaction for the huge retailer but could be a major headache
for employees.”
Using a software system that breaks down the sales data
for all its retail outlets in 15-minute increments and then
creating
scheduling plans to match this data, the company is staking
a high cost on becoming more efficient. It is also setting
an example for other companies to follow. As Andrew Leonard
writes in Salon.com: “Whenever Wal-Mart makes a move,
the world snaps to attention.”
Yet Wal-Mart is not the first company to initiate this change.
Other companies that are experimenting with what IBM calls
the “next-generation” labour management programs
include large retailers like Payless Shoe Source; RadioShack
and Mervyns LLC. At the end of this month, Payless expects
to implement its system in 300 out of its 4,000 stores. Much
like Wal-Mart, Payless executives will be able to track individual
store sales, transactions, units sold and customer traffic
in 15-minute increments. Scheduling workers is then made
after the data has all been crunched.
Not Without Controversy
labour optimization is both a controversial and emotional,
issue, and it brings up many questions about the ethics
of reducing costs at the expense of people. As Charles
Fishman, author of “The Wal-Mart Effect,” writes
in Salon.com, “Scheduling people is not, in fact,
like scheduling electricity purchases or scheduling the
arrival of trucks at a loading dock. You can’t “optimize” them
if their work lives spin their personal lives into chaos
and uncertainty…the morale and attitude that people
come to work with each day really matters to your business – and
affects your business.”
Reflecting these same sentiments in an anonymous letter
to CNNMoney.com, a group of Wal-Mart workers from Pensacola,
Florida, expressed concern that their lives would be “turned
upside down” if Wal-Mart goes ahead and implements
its new scheduling program (currently it is only being piloted
at a select number of stores).
“
While working an ever-changing Wal-Mart schedule, how can
one arrange day care for young children? The scheduling will
make continuing education extremely difficult,” the
letter states.
George Whalin, CEO of Retail Management Consultants, warns
in the same article on CNNMoney.com that the system works
best when there’s give and take between management
and employees “People have lives,” Whalin said. “It’s
not realistic to dictate to your employees what shifts
they’ll
work.”
Good Timing, the study on labour optimization by IBM, addresses
these issues and warns companies about the difficulties
inherent in any major labour force change. As one retailer
participating
in the study expressed: “From the beginning, we recognized
since we were playing with employees’ time and money,
we had to be sensitive to the needs of our culture.”
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