Labor Scheduling: The Need to Cost with Experience

By Pat Dittamore

With many competing views on how to effectively write the best schedule, should labor dollars be the only contributing factor to managing an effective workforce and staying fiscally responsible? When dollars are the only factor considered when scheduling a workforce, there will certainly be flaws in the final product. How can you expect newly hired low wage teammates to have the knowledge, speed, or the dedication as employees that have had years of experience? Experienced employees have consistently performed to your standards and helped build your business, however sometimes the new employees come in with better, innovative ideas on how to expedite and complete tasks quicker and more effectively.

Costing a schedule presents many issues and sometimes you have to look at whether an employee who makes 2-3 times what a newly hired employee makes can out-produce that many extra hands if you spend the same dollars to get the same tasks accomplished (sometimes that could mean replacing 8 hours with 24 hours). Conversely, leadership and knowledge cannot be overlooked. That stable but costly teammate is the one who consistently trains the lower wage employee, accomplishes high job knowledge tasks, and his or her input is invaluable to the growth and stability of your company.

When looking at any solution there has to be a balance. Employees have to be assigned to the best possible areas to succeed, thereby creating a stable workforce. Constant employee turnover damages business; every new employee has an upfront cost, and there will always be a training and knowledge lag that causes that low rate, however so attractive to ultimately be costly.

Any scheduling solution that only keeps labor cost to a budgeted minimum will fail, and any solution that cannot take the cost of schedule into its plan will also meet the same fate. There has been a long and ongoing discussion on which solution is best, and the ultimate solution must fall somewhere in the middle.

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