Research has found around fifty percent of managers make uninformed decisions without realizing the sweeping impact of staff costs – or if you like, they manage the business with the same outcome as flipping a coin. You hire qualified or staff with ability (they are not the same thing) but on balance they are the lifeblood of your business, working each day to represent your product, service, and brand in the best possible light.
Many approach shift pattern design as an “admin” chore, unaware of the many complexities, risks, and unforeseen consequences poorly designed and executed shift patterns can bring down upon a business. For example, the relationship between staff costs and revenue. The cash you spend to bring in cash – I know, it’s faintly vulgar to talk about such things, especially in the context of people, but after your third or fourth ‘failure’ you will acquire deeper insight.
A business with around a 100 staff deployed on extended or 24 hour working will cost the business around $5.74m (£3.59m). It can be higher, or lower, but this is based on the median weekly pay of a western developed nation. Deploying a bank resource of 100 nursing professionals at premium contract rate will consume the order of $81.1m (£54m) a year. So if you are involved in shift pattern design, and ultimately workforce deployment, you will be managing a few million in assets for even a modest operation.
It is the exponential nature of staff costs that create the ‘shock and awe’ for the unsuspecting manager. For example, paid and unpaid breaks can make a difference of around $0.5m (£342k). Being asked to design working arrangements that factor in overtime hours for reasons other than they are needed (a prevalent practice in certain sectors) typically cost a further $1.7m (£1.1m). The costs for 100 staff is now $7.9m (£5.2m). You could test this by trying to induce a 28% business overhead without generating revenue at the next performance review and see what happens.
When you read about job cuts followed by profitability it is by then the only correction they see left open to them. The irony is smaller doesn’t mean efficient, they are probably still inefficient and now with a reduced capacity to be productive. Paid breaks and institutionalized overtime are simple concepts. Mention could be made about a mismatched staff supply which will easily divert a further 30% or more of costs down the ‘sink’ with no appreciable benefit. Getting costs under control with a coordinated and structured staff supply is now a must have in today’s business planning.