As one year ends, another begins, and it’s
a good opportunity to assess what has happened over the last year and consider
what we can do to improve next year. Personally we tend to do new year’s
resolutions, things like “I will not eat chocolate” or “I will go to the gym
every week”. But a company can also have New Year’s resolutions too.
The first thing is to assess the problems
and consider which one will have the biggest impact. In our experience the
biggest impact on an operation is holidays. You might not think 28 or 33 days
has much of an impact. But consider if the company has 10 employees all with 33
days of holiday in an office hours’ environment, that means that there are 330
days of holiday to accommodate and there are only 260 days when you are
working. Clearly everyday at least one person has to be on holiday. So even
with 10 people on average you are always operating one person down.
When you have shift workers the problem becomes
even bigger because you need to think not only about the effect an absence has
on the shift itself but also the impact to the adjacent shifts. Companies can
quickly find that they are continually missing targets while their overtime
bill is sky rocketing and they don’t know why! Yet when we analyse the
operation, we always start with the holidays. A quick assessment of how holidays
have been taken and are covered reveals that managers forget to consider the
effect holidays make to the operation, so they haven’t got adequate cover in
place or they have the cover but it is in the wrong place.
The Saving can be Substantial
Let’s go
through a typical problem. You have 10 people on shift and you need 10 on shift
to operate effectively. 10 people with 30 days of holiday is 300 days of
holiday per shift. You have four shifts so that’s 1,200 days of holiday.
So here is some simple maths; if 40 people
are on a 40-hour week with 30 days of holiday each, how many shifts is that if
they are working 8-hour shifts?
Each day of holiday is one fifth of a
working week, or 8 hours (40/5=8). If each shift is 8-hours then they each get
30 shifts off per year. Nice and simple.
If they are working 12-hour shifts, then they
are each entitled to 20 shifts of holiday (each day is 8-hours so it’s 1.5 days
of holiday for each shift).
So how many people do you need on each
shift to fit in everyone’s holiday?
Sounds like a simple question, and most
people would give the answer to be two. That’s because on average you have 1.15
of a person off each shift. So you would round up to two. That means that now
you have 12 people on shift. So how many will be on holiday on the average
shift? With 10 people the answer was 1.15, however when you increased the
number of people you also increased the amount of holiday. So now you have 1.38
off each shift on average.
So is two the correct number?
Let’s look at what would happen over the
year. So you have two extra people coming in each shift. So that’s 4,160 hours
of holiday resource (2x40x52=4,160). That’s per shift, so in total, you have
16,640 hours of holiday resource. That’s a lot of hours.
You are covering 2,880 hours of holidays
per shift or 11,520 hours for the operation. So that gives you a spare capacity
of 5,120 hours or about 45% of the holidays.
So in theory yes two extra on shift would
give you the correct number to cover for holidays.
However, in practice you run into problems.
When do people like to take holidays?
- Summer
- Christmas
- Good weather
- Weekends
- School Holidays
People don’t take holidays like robots,
they take holidays when it’s convenient to them. So during the summer and
Christmas companies say, we recognize that people want to take more holiday so
we will allow two people off every shift and then cover for a third with
overtime.
Sounds like a good policy, however you have
now given mangers carte blanc to use overtime to cover for absences and
holidays.
From the manager’s point of view, they have
a quota to meet so if they need to bring someone in on overtime, that is a
small cost compared to missing their quota. So they bring someone in on
overtime. Then have you ever tried to refuse someone’s holiday request. It’s
not an easy thing, and now they have the resources to bring someone in on
overtime. So what happens is during the summer it is not uncommon to only have
half of the original shift in and half covered by overtime.
Hence while you started out with the correct
number, you now find that you have a high overtime bill which is completely unnecessary.
So what’s the solution?
Well there are two, you can go down the
route of a holiday management plan. This sets out the rules, to minimize the
disruption that holidays cause. It’s very effective and when used correctly
will ensure that you have the correct number on shift at all times.
However, it does require someone to manage
it, at least one full time equivalent per fifty people. And really you should
spread the job between three people, so that they can have holidays too.
The alternative is to introduce holidays
included. Holidays included shift patterns are where everyone’s holiday is pre
rostered into the shift pattern at the start of the year. This time is not
randomly allocated, it is given in good quality chunks of time off in a way
that the shift workers would like. So they have a week off regularly, and a two-week
holiday in the summer. They always get whole weekends off or a minimum of three
days between shifts. We’ve set up hundreds of holidays included shift patterns
for companies around the world. So once a year you need to spend a week or so
setting up next year’s shift pattern, and then that’s it. The shift pattern
runs itself. So now you have no holiday problem.
Or contact us directly at alec@oranalysts.com or by phone on (+44)
01636 816466 and find out how we can help you have a more efficient Happy New
Year.
