At this time of the year we see organisations struggling to match seasonal demands, just look at the current winter problems in the NHS. Clearly the cyclical profile is part of the issue here, but there are other underlying issues too. Dealing with seasonal work demands is a common problem for many and varied businesses throughout the UK.
Peak periods may see you relying on voluntary overtime from your permanent staff (be careful of overuse and possible burnout) or increased use of agency staff, if available, or the use of temporary staff. These may bring the associated costs of training and recruitment, whilst spreading your skilled, trusted permanent employees more thinly.
At other times of the year, or for other industries, there may be troughs of demand, such as the period post-Christmas and New Year for many retail and hospitality organisations. Here businesses may struggle to fill working time with true value added work, or may lay people off, encourage holiday taking or simply stop using non-permanent members of staff.
In the past, delivering a guaranteed level of service at peak times meant carrying spares or simply having this reliant on essentially ‘voluntary’ overtime, i.e., the almost arbitrary line for pitching your permanent workforce level was high. This has become less practical with labour shortages, rising costs and the requirement of improved productivity. In more recent years this was addressed by an alternative option, seen especially in many manufacturing and distribution sites, where the core workforce was reduced to a lower level and the additional working hours came, when needed, from a separate group of more flexible, often lower cost, agency workers, who could be effectively forgotten about in the troughs. To employers it seemed win-win, with less cost and guaranteed attendance when required, but it all too often lead to a lack of engagement in the workforce, with poor motivation and a “them and us” culture.
In reality, if you are using traditional working arrangements in a very seasonal enterprise, it is simply a matter of the level where you pitch your establishment permanent workforce as to which of these issues is more significant. Problems may occur in the peaks if you pitch the line too low and you expect to match demand, lose-lose for business and employees? Or, if you pitch the line too high and the business may be no longer competitive or profitable?
More flexible solutions are possible which enable organisations to do more with their core workforce through managing them in a more demand responsive way by spreading the workload across a larger group of employees. The first step on this path is to understand your organisation’s demands for work.
Sounds an obvious starting point but often in practice frequently neglected!
Organisations muddle through, they think they know when they are busy and quiet, they may even put simple rules of thumb in place regarding allowed percentages for taking holidays, but the detailed requirements and underlying causes are often not examined.
Often the best place to understand what to expect in the future is by looking at the past! If data is available, can this be translated into a future business demand? Can we simply look at past years and add a growth or decline factor? For some, a better methodology may be to use some of the artificial intelligence (AI) capability now available which looks at past data, examines how various algorithms predicted more recent trends, and then uses the most accurate methodology to predict future requirements.
For certain businesses this may be a straight-forward method of forecasting demand for a product and translating it to demand for skill presence at work, and thus shift patterns and staffing levels required. Services, in general, are direct, they cannot be transported, stored, or pre-made, but for other industries it may depend very much on the nature of what we are forecasting. For a manufacturing organisation what about stockholding - can demand be smoothed by building to stock, or is it restricted by components needed for manufacture? Is stockholding too costly in terms of tied up assets or storage constraints? Is there a lifespan of the product?
Further problems may be seen if we use this very basic approach. Is the past, data following a pattern that has been constrained by historic shift patterns, i.e., is it the real demand or reflected demand? Digging further, were there any other limiting issues? Did the business fail to manufacture at times due to the cost of overtime, for instance? Could this be a time to review this policy or indeed review any other contractual arrangements?
Good practice would involve more than simple maths, but also discussion and working knowledge from the experts – your own staff. So, collaborate with employees, representatives, and unions to engage the correct number of people in any shift pattern taking account of absence sickness and holidays (ASH). Analysis may even show, irrespective of other benefits of reducing excessive working hours, that this may even be a cheaper option especially where higher overtime rates are prevalent.
Understand any reasons for absence and whether you are able to actually address it. When do they occur, who is absent, what issues are caused by the absence e.g., could multiskilling prevent additional hours requirement. Is absence repeated by specific individuals, for what reasons – they may or may not be genuine? Does it occur at specific times such as around time planned off?
If an additional person is required for approximately every nine employees. However, holiday is not normally taken evenly! Is there anything that can be done to ensure that this is planned to fit not only with workforce requirements in mind but also those of the business e.g., a blanket rule of a number of people allowed off may not be suitable if there is a period of slack – obviously encouraging, or ensuring, employees to take time off when the business doesn’t need them may at times help both parties.
If your analysis has shown that there are different requirements for people to be at work at separate times, then try and plan for them. Here we may not be looking at seasonality over a full year, it may be a much shorter period. A simple example may be where you currently have five, eight-hour shifts, Monday to Friday. However, Monday, for this example, was generally the busiest day of the week, often required extended working through overtime, with a lighter requirement the rest of the week. The response should be to build a shift pattern with a 10-hour Monday reciprocally 7½ hour shifts the rest of the week. It may be that it is possible to increase the hourly rate slightly to offset any employee losses from this overtime reduction – in reality all then become winners as the employee may be at work fewer hours and the business may well maintain better productivity. This type of system is frequently seen in finance where month-end weeks have longer shifts than other weeks.
This is the crux of what we are discussing, the reason for this whole approach. There are a multitude of working arrangements that range from flexitime to annualised hours that rely on banks of hours to allow different shift lengths to be worked in different periods of the year, month, or day. Flexitime is generally seen as a form of working aimed more towards helping employee flexibility but with care schemes can be designed to match business demands as well.
Annualised hours is, in essence, a banked hours scheme based on a year. They often go slightly further than simple banked hours as other entities such as holidays and pay are also based on a year. This allows the alignment of more of the working hours from your core workforce to be formally planned and applied in the time of year when they are required, by moving them, giving shorter shifts or more time off, from the trough periods.
Whichever form of flexibility is chosen, or even if you stay with overtime and try and spread the burden, then the problems described can be reduced through maintaining a good record of hours worked by each individual. This is just as true if the variance between peak and trough is too great to mean using only your core workforce, it may still be a useful option to utilise agency or temporary workers. Cognition of all types of hours, normal hours and overtime/banks is essential to ensure that there is a good, equitable balance of hours across all relevant employees. Workforce Management Systems ensure that planners are able to look at attendance demand and can rank employees based on a variety of criteria, such as cost (labour grade), attendance information, bank levels or overtime usage to ensure fairness, whilst making sure that people are in the right place at the right time.