Archive for August, 2008

Read about punching in and out (and payroll), and labor schedules before reading this post.  Both posts contain information that will make this article make more sense.

Labor Metrics Help Control Payroll and Labor Costs

At the end of the week, time and attendance values will be collected to calculate wages and payroll for the normal “work week”. A side-by-side comparison of the actual schedule (time and attendance values) and the theoretical labor schedule will reveal a variety of metrics that can be used to manage the workforce. This practice of comparing the actual schedule against the theoretical labor schedule is commonly called “Actual vs Theoretical” or “AvT”. For example:

• Which employees routinely arrive for work on time? Consistently reliable employees are valued employees, arriving at work on time, and are the real workhorses of the business. Make sure to reward them for their efforts.

• Which employees are routinely late for work? This can cause a labor shortage during shift changes, and can disrupt other employees. These employees may need to be disciplined for routine tardiness.

• Which employees are routinely early for work? This increases the payroll expense, reducing profit for the business. Disciplinary actions may be required for these employees.

• Which employees do not show up for work, or routinely call in? These employees may need to be counseled and warned that they risk termination, as they are unpredictable in their work habits and lower morale for other staff members.

• Which employees are always available when another employee does not show up? These employees are willing to work on their days off – and should be rewarded for their efforts to keep the business running.

• Which positions are prone to high turnover? Turnover is extremely expensive to a business, and identifying areas with high turnover is the first step to take measures to reducing turnover.

• Which staff members are most tenured? Tenured staff are dedicated team members and should be rewarded for their efforts. Every effort should be made to increase the tenure of employees while reducing turnover and increasing profits.

• Which is more costly, the theoretical or actual schedule? How much difference exists between the two schedules?
  • If the theoretical schedule is more expensive, management is over-scheduling the work force and may be sending employees home without cause. This often indicates aggravated employees and increase turnover – decreasing profit for the business.
  • If the actual schedule is more expensive, management is not scheduling enough work in advance, and is then forced to call employees on their days off. This situation can also create aggravated employees and increase turnover. It often results in unnecessary over-time.

The ideal work environment has a 0% AvT ratio - employees worked when they were scheduled and management accurately identified the business requirements.

Labor, especially in retail and hospitality, is the largest expense which businesses directly control. Comparing metrics such as Actual vs. Theoretical allows management to maintain control of the business, thereby increasing profit. Many metrics can be compared manually using Microsoft Excel spreadsheets, but sophisticated scheduling software such as TimeForge, can calculate many of these metrics quickly and easily.

Are complicated employee scheduling practices taking up precious time at your business? Are you making the best possible labor schedule? How much turnover is created because of bad, or late, schedules? Did you know that TimeForge can reduce turnover, improve retention and increase profits at your business? Sign up today for a free trial!

August 21, 2008 – Lubbock, TX – It happens on every Friday of every work week in hospitality, restaurant, and retail businesses around the world. Employees call and want to know when they are scheduled to work during the upcoming week, but the manager hasn’t posted the schedule. Staff members are not able to plan their personal lives without the work schedule which creates conflicts and leads to employee terminations and resignations as soon as the schedule is posted. With labor scheduling software tools, management can reduce schedule conflicts, minimize turnover, and improve profitability at their business.

Managing a labor force requires scheduling part-time and full-time employees properly before they are needed for work and also tracking when employees clock-in and clock-out. Good managers reduce the difference between the theoretical work schedule and the actual hours worked while maximizing sales at the business. Improper employee scheduling leads to one of two circumstances:

1. More employees are scheduled to work than are necessary - increasing payroll costs and reducing profits. Employees may be cut from the schedule without working their scheduled hours.
2. Not enough employees are scheduled to work - decreasing sales and reducing profits. Employees must be called in to work, creating frustration and high turnover among personnel.

Neither option is desirable and the key to avoiding both situations is to monitor and refine the schedule at your business. As experienced managers know, building an accurate schedule takes several hours a week and must consider all of the following items:

• Availability sheets
• Communication and request log books
• Shift swaps and trading
• Minor rules
• Scheduled breaks
• Lunches
• Employee notifications
• Training and certifications
• And many other factors …

Using TimeForge, a web-based labor management system, managers quickly build accurate schedules while reducing turnover, enhancing communication, and improving retention. The recently updated TimeForge provides more time saving features, new pricing plans, and now includes a powerful Daily Log.

With a comprehensive labor management tool, payroll expenses are reduced and employee turnover is continually monitored. TimeForge keeps managers out of the back office and puts them back on the floor where they can directly influence the profits of the business.

About TimeForge
TimeForge, www.TimeForge.com, develops easy-to-use software products to manage employee scheduling, time and attendance, and communication logs. TimeForge’s web-based product suite is designed to meet the demands of the retail and restaurant industries, providing solutions for both independent and chain operators.

New and existing TimeForge users received a major upgrade on Thursday night, as the TimeForge system was updated to provide more flexible scheduling, new time and attendance functionality, and brand new Communication Log features! Some of the new features include:

• Availability Requests have been upgraded and are now easier to use. Outstanding employee availability requests are presented as part of the schedule making process and employees are constantly informed of any changes to their availability.

• Never accidentally schedule staff before or after closing the store! Open and closing times can be configured while making the schedule, and warnings are displayed when staff are scheduled before the store is open or after the store is closed.

• Employees are automatically notified by text message when management approves a shift swap.

• Export punch-in and punch-out times to payroll for easy processing. TimeForge has partnered with CompuPay, a leading provider of payroll for small-to-medium retailers and restaurants. Hours can be exported to CompuPay with a single click!

• Easily identify which employees need to work in specific stations or sections, and schedule these positions with a single click. No more typing “Section 1” or “Pizza” or “Lane 3” when making schedules!

• In accordance with state and federal laws, each position (or job code) can have multiple pay rates, depending on the time of day. Always make sure that employees are paid appropriately!

• Employees can now search for a shift to pick up, or can pick up any shift that has been given up shift by another employee – if approved by management.

• Support for delivery drivers is now included! Drivers can enter tips and mileage for their shifts directly into the TimeForge Time and Attendance module.

• Support for break and meal periods has been enhanced, and managers can now create specific break and meal periods for each shift when building the labor schedule.

• Decisions about your business that include the weather can now be made directly from TimeForge. TimeForge includes weather forecasts on the “To Do Today” page.

• New reports! New TimeForge reports include summary reports for time and attendance, as well as several new scheduling reports.

• Are employees asking for the ability to print the schedule, or a copy of the request log? A setting inside of TimeForge will allow employees to print their own copy of the schedule, breaks, or requests.

• Does your shift need more information than TimeForge normally provides? You can now enter shift notes directly on to the schedule while building shifts!

• Significant improvements to TimeForge Attendance were made – time and attendance entries can be sorted a number of different ways, and a note can be entered for each attendance entry.

As always, feedback on the new TimeForge functionality is always appreciated!

We previously discussed that employee scheduling is hard, time consuming, and costly to a business. Where possible, businesses should use software tools to automate labor scheduling – saving time and money while improving profits makes a lot of sense! Once the employee schedule or the theoretical labor schedule, is complete, it is posted for all employees to see.

What’s the Difference Between Schedules and Timecards?

The time and attendance system is one crucial aspect of managing labor. This system tracks the “actual schedule” worked by staff members. Each employee should have their own “timecard”, although computer systems have improved these paper systems over the years. At a bare minimum, this can be a paper card which has the time and date the employee arrived and the time and date the employee left, printed or stamped on the card. At many businesses, the Point Of Sale (POS) system or Property Management System (PMS) has a built-in time and attendance system which may be sufficient. More sophisticated time and attendance systems are available from payroll vendors, Human Resource (HR) software vendors, and best-of-breed labor management providers like TimeForge.

As each day of the theoretical labor schedule progresses, the following cycle likely occurs:

• An employee arrives at the business

• Before beginning any work, the employee clocks-in (or punches-in) to a time and attendance system, and management must be mindful of early and late clock-ins, and buddy-punching.

• The employee performs their work

• The employee may be given break periods, or meal breaks, some of which may be paid or required by law. These breaks should be recorded for Labor & Industries Audits (L&I Audits), corporate compliance, and to secure against potential labor lawsuits.

• The employee clocks-out (or punches-out), declaring any tips (if necessary), from a time and attendance system

• The employee leaves the business

Use Timecards for Payroll, Schedules to Plan Labor Costs

It is important to pay payroll expenses from the time and attendance system, and not the theoretical labor schedule. If management pays the employee directly from the theoretical labor schedule and the employee arrived later than scheduled, then the business is paying too much to the employee – reducing profit. If the employee arrived earlier than the theoretical labor schedule suggested, the business will not lose any money by paying from the schedule - however, a number of regulations are violated by not paying the employee for actual time worked. Employees, in all industries, are notorious for arriving to work 15-minutes earlier than scheduled, or leaving 10-minutes later than scheduled, requiring that employers pay appropriately for worked time. To ensure compliance with regulations and to reduce the loss in profits, the correct way to pay employees is with the clock in / clock out times from the time and attendance system.

Is employee scheduling complex at your business? Are you making the best possible labor schedule? How much time is thrown away while making a schedule every year? Did you know that TimeForge can reduce turnover, improve retention and increase profits through employee scheduling at your business? Sign up today for a free trial!

Although employee work schedules sometimes appear simple to create, building a “good” labor schedule is extremely difficult using traditional methods such as Microsoft Excel or pen-and-paper.  Managers must build a schedule so that qualified employees are available to meet the forecasted demand for service or goods.  And a good schedule accurately reflects projected sales for the upcoming week or month, providing adequate work hours for employees.

Labor Schedules Take Time to Create

The employee schedule informs employees when to arrive at work, and in some cases, when to leave.  In other cases, employees are “cut” from the schedule based on demand (or volume) at the business.  In almost every case, the labor schedule is created by management staff in the back-office or at home after hours – a point of discontent for most managers who must work longer hours and weekend hours to build schedules.

The steps to create a labor schedule reads like a long list of tasks, occupying several hours of management time every week:

1. First review the manager’s log book and estimate or forecast upcoming sales and the demand for labor.
2. Next check the employee request log and availability sheets as well as individual work preferences while remembering which employees are minors or restricted in working.
3. Look-up required employee certifications; for example, an ABC license is required to serve alcohol at a restaurant or necessary certifications to dispense medications.
4. Identify trustworthy and experienced personnel to open or close the business.
5. Try to fairly distribute shifts while meeting employee minimum hour works, but do not exceed a maximum number of hours.
6. Make sure that employees are not likely to receive overtime if someone fails to show up on the schedule.
7. Identify convenient times to provide break and meal periods for staff members who are required to receive breaks.
8. Calculate the likely cost of payroll, being mindful of budgetary constraints – if the cost is too high, start over.

Juggling all of these factors to create a good schedule for the workforce is a complicated task that can consume more than ten-percent of a manager’s time throughout the week.  In many cases, especially in owner-operator businesses, this schedule is posted late in the week for the upcoming week.  Posting the schedule late causes problems with employees and creates higher turnover and reduces tenure at the business – reducing overall profits!

The final version of the labor schedule, which the manager has likely spent hours creating, may be bulk-emailed out to the employees (if the manager used a tool such as Microsoft Excel and a schedule template to build the schedule), or more commonly, printed and posted on a wall in the back of the business (inside the management office, store room, or kitchen).

Theoretical Labor Schedules are Important for Staff

This posted work schedule is the “theoretical labor schedule” - it is the necessary labor needed to operate the business and meet expected customer demand.  The posted work schedule will change throughout the week as employees fail to show up, swap shifts with other staff members, arrive early or late, or business requirements change and employees are cut or added to the schedule.  The posted schedule should be saved and archived (as it was created by management) for later comparison to worked hours, and for issues arriving from Labor & Industries audits, availability conflicts, labor disputes, or even lawsuits.

Is your scheduling complex?  Are you making the best possible schedule?  How many thousands of dollars do you spend making schedules every year?  Did you know that TimeForge can reduce turnover, increase retention and increase profits through employee scheduling at your business? Sign up today for a free trial!