Industry

In many locales, labor laws for the service industry severely limit the number of hours that a non-exempt employee can work.  Hours worked can be limited by the industry, age, job description (position worked), hourly rate, holiday, length of shift, or even the day of the week.  If your business works with service unions, these rules can become even more complicated, requiring that managers spend time tracking breaks and meal periods and indicating whether or not employees wanted to take their break.  Some states and insurance companies perform regular Labor & Industries audits, imposing heavy fines or insurance premium increases for non-compliant businesses.

Careful managers schedule around these frequently changing and complicated rules, ensuring that their business is compliant with all applicable labor regulations.  However, businesses can inadvertently land themselves in hot-water when employees fail to show up, quit, or are terminated for otherwise legitimate reasons.  Inexperienced managers, overburdened by other areas of schedule creation can forget about these rules, which are not core to the “making money” aspect of their business.  Stiff fines and lawsuits are the result of failing to be in compliance.

In uncertain economic times managers must be able to schedule labor correctly in a consistent manner, keep employees happy, and reduce fines imposed by legislative authorities, such as the Department of Labor.  Businesses should seek to use cost-effective computer systems, such as TimeForge, to ensure that proper scheduling techniques are utilized.  Effective scheduling software will be able to schedule meal and break periods, accurately calculate overtime costs, and archive previous schedules for managerial review.

Labor & Industries (L&I) audits are common in some US states (California, Washington, Oregon, and New York are especially common) in restaurant, food-service, retail, construction, and hospitality-related industries.  These audits are performed by the state or by insurance companies to verify that the business has complied with all applicable regulations.  Audits focus on unpaid overtime, minors working too late or too early, break and meal periods that are not properly documented, and other violations.  Rule infractions can be punished with stiff fines and/or insurance premium increases.

Make sure that all employees are aware of the applicable rules for the city, county, and state / province.  Follow federal / national rules (where applicable), corporate rules, and insurance regulations (if applicable).  Where possible, automated scheduling systems should be utilized to enforce these rules reducing the administrative burden placed on managers - allowing management to work on other pressing issues such as training, customer service, and management tasks which cannot be automated by cost-effective technology solutions.

We are a few months late getting this bit of news to all of our users — but we were featured (for the second time) by Accuvia, in their monthly newsletter, Foodservice Tech Advisor.  In August, Accuvia featured TimeForge in their annual Back Office issue, featuring some of our recent improvements as part of their industry updates.  The newsletter mentioned important update features such as:

• Fingerprint and Biometric support
• Improved Attendance Reports
• Tracking employee tips and mileage
• Scheduling by Department

More can be read in their actual newsletter, located here.

Are difficult employee schedules practices taking up time at your business? Did you know that TimeForge can reduce turnover, improve retention and increase profits at your business? Sign up today for a free trial!

We previously discussed the Wall Stree Journal article about Starbucks recent change in labor scheduling at most of their stores.  The change has been initiated by management to address issues of slower sales in the economy, save on labor costs, and to reduce turnover by providing more hours to (fewer) employees.

It seems that Starbucks baristas and others have written about the changes to the program on the Starbucks Gossip blog.  The first blog post / thread discusses the original WSJ article and its implications on the coffee shops and retail experience.  The second blog post / thread, discusses that a side effect of the new labor system is that baristas are allowed to make bad drinks - in order to save 5 seconds per drink.  That probably isn’t the desired side effect of an improved scheduling system.

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!

In many businesses, employees are perceived as a required evil – payroll is a liability that is necessary to be in business.  Unfortunately, in many service oriented industries (such as retail, food-service, and hospitality industries), this attitude harms the business by increasing turnover, deflating morale, complicating legitimate hiring practices, and increasing employee training costs.  These problems are systemic in many organizations, creating dissension between salaried managers and non-salaried employees and increasing turnover.  Another, better, way to view employees is as assets to the business.

Training Costs Money Too

All new employees, even experienced hires, must be trained appropriately.  Employees should be trained in the corporate vision, customer service, and the details of their specific job.  Duties that each employee is responsible for performing will need to be demonstrated by a competent manager or trainer, and then must be repeated by the newly hired staff member.  Training entry-level workers can often take more than a week of management time, and properly training salaried managers may occupy several months.  In addition to the management time utilized training employees, new hires must be paid during their training.  Make sure that training is streamlined and hiring practices are refined to reduce the cost associated with hiring.  Consider Internet based tools to assist staff training, where appropriate.

Employees Become Lucrative Assets Over Time

Employees are expected to learn new skills while working, often referred to as “on-the-job training”.  Most work-related skills can be learned on-the-job, including new equipment skills, customer service skills, and business skills.  These new skills are passed to employees through interaction with managers and other employees at the business, and is the foundation of many promotions.  Hourly wage workers can grow into Assistant Managers.  Assistant Managers can climb the ladder to become General Managers.  General Managers become District Managers, or Vice Presidents.  Each employee becomes a trusted asset, and finding a replacement for an employee that leaves the business will always cost more than the direct salary of that employee.  In addition to training costs, there is an obvious and direct cost when employees are absent and customers are not adequately served.

Keep Assets (Employees) in Mind While Scheduling Work

When scheduling employees, managers should remember that employees are assets necessary to help the business grow and profit.  Employees that excel at certain job duties should be scheduled where their talents can improve business profitability.  Employee requests for time off, changes to the work schedule, and holidays should be honored where possible – and the business should establish rules and regulations to facilitate constant communication between employees and managers.

Turnover Is Expensive — Really, Really Expensive

Turnover is not cheap.  Indeed most managers under-estimate its cost and the learning curve of working in a new restaurant.  Approximately 70% of the cost of turnover is the loss of productivity before an employee leaves, as the employee’s attitude toward the business becomes detached and fewer customers are served.  Turnover in most hospitality-related industries (restaurants, bars, clubs, hotels) averages around 100% annually – meaning that a store with 30 employees has hired 30 employees in the last twelve months!  Using a cost of $2,000 per staff member, that is an annual turnover expense of more than $60,000!  Reducing turnover should b e a primary concern for any business.

Internet-based scheduling tools, such as TimeForge, can assist managers when building and maintaining labor schedules.  These tools can allocate labor appropriately for your business, track employee availability and time off, meal and break periods, and alert employees when their scheduling needs are, or are not, met.  Your business will not always be able to cater to your employee’s needs, but constant communication between salaried managers and hourly-wage employees will reduce turnover at your business and preserve the value of your employee assets.  Payroll may be a liability, but employees are business assets.

According to the Wall Street Journal, the largest coffee retailer, Starbucks, is changing its scheduling system to have fewer employees work longer hours at its various locations.  The goal of the new scheduling program is to reduce labor costs for the chain, while improving sales through customer familiarization with the on duty staff members.

Will the plan work?  It’s very possible.  With smart and accurate labor scheduling, Starbucks should be able to reduce turnover and keep employees happy while lowering their labor costs.  However, if Starbucks begins over scheduling employees, the plan may actually backfire on them — creating higher levels of turnover, decreased profits, and lowering sales.

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!

Managers are More Expensive than Non-Salaried Staff

In many industries including retail, hospitality, food-service, hotels, and manufacturing, salaried management staff are usually several times more expensive than non-salaried staff at the same business. In many cases, one member of the salaried staff can be more expensive than five or six non-salaried staff members. In addition to their hourly-wage, managers are eligible for benefits such as life insurance, health insurance, expensive overtime, or additional perks like free food or discounted merchandise rates.

Schedule Managers to do Management Tasks

Businesses should ensure salaried managers perform managerial tasks while on duty, and leverage non-salaried employees for work-related duties that do not require a manager. Some tasks that managers may be charged with during a regular work day could include performing quality control, placing vendor orders, building employee schedules, training employees, processing payroll, and working with customers. Whatever management does while at work, make sure that it is something that is representative of their cost to the business.

Managers should be able to jump in and work when other non-management staff members do not show up for work or unanticipated spikes in demand require more line workers. This ability implies that the business does a good job of cross training employees, and the business is not overly reliant on any one staff member. However, if it is common practice for managers to mop the floors or clean bathrooms because other staff members do not show up, than a re-evaluation of hiring and staffing practices is recommended.

Managers are routinely asked to create efficient schedules for their business on a weekly, bi-weekly, or monthly basis. Accurately scheduling the work force several weeks in advance provides employees with a defined work schedule and allows managers to estimate upcoming expenses (payroll is often the largest expense in retail, restaurant, hospitality, and similar industries). During the process of preparing an accurate schedule, managers will check employee availability, review request logs, consider federal/state/local and corporate regulations, update employee work preferences, revise employee capabilities and training, make overtime considerations, ensure minimum work hours all while maintaining budgets and other business requirements. The entire schedule process commonly occupies a manager for 10% of every week, costing the business at least several hundred dollars each week!

Changing the Employee Schedule Uses Manager Time, Which is Expensive

In addition to creating the schedule, managers often change the schedule on a daily basis. Employees may become available (and want more shifts), suddenly be unavailable (illness or termination) and not able to work, or forget when they need to be at work. Shift swapping is also common in many industries and requires a manager to spend time on each trade – employees give up shifts that were assigned to them originally, or pick up shifts that others cannot work. A shift or request log may be used for employee initiated shift trades. Managers cannot monitor theft, interact with customers, train employees, or perform quality control at the business if they are in the back-office working on a labor schedule.

To ensure that management staff time is spent appropriately, use technology tools to perform tasks that can be done by computers. Software tools such as TimeForge improve staff retention, and decrease the amount of time that scheduling labor consumes. TimeForge includes a number of additional tools that will assist managers in time management, including a daily manager log book, payroll processing, and other similar tools.

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!

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!

During economic booms, such as those witnessed during the last few years, many businesses focused on increasing sales while their operations lagged behind.  Operational aspects such as inventory control, portion sizing, reducing turnover, improving employee retention, and training are all import details of hospitality and retail businesses that can be swept under the rug in good times.

Jim Sullivan, the chief executive of Sullivision.com recently penned “In hard times, control costs instead of hiding your inefficiencies by just pumping up volume” at Nation’s Restaurant News.  Although his article is meant for restaurants, it is also applicable to retailers, hotels, and other similar businesses.  Jim covers a number of issues, including one aspect of running a business that is often forgotten in the day to day operations:

Remember, all money is not created equal: $100 in sales is $100 less taxes and expenses; $100 in savings is $100. Here are some fiscal fundamentals to review and execute with your team in both tough times and boom times.

Now is an excellent time to revisit your business’s operational procedures, making them be more efficient and cost conscience - immediately improving profit at your business.  A variety of tools, including TimeForge, are designed to improve cost controls at your business - producing schedules in minutes instead of not hours.

Can you build a schedule in less than 10 minutes?  How many thousands of dollars do you spend making schedules every year?  Did you know that TimeForge can minimize costs and increase profits through effective employee scheduling at your restaurant, pizzeria, hotel, club, bar, or retail business. Sign up today for a free trial!