Posted on Sep 08, 2008 by apresley in Articles
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.
Example: Restaurant servers (waiters) in the state of Texas commonly receive less than three dollars per hour in compensation from the business (the rest of the minimum wage must be received in tips from customers during the shift). However, a manager at the same store may receive more than twenty or thirty dollars per hour, implying that the manager is “worth” between 400% and 1000% more than a single server.
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!
Example: A restaurant that employs forty non-management staff may have two assistant managers (a front-of-house manager and a back-of-house or kitchen manager), and a general manager. Non-management staff may make between $3 and $12 per hour, while managers may be salaried between $40,000 and $60,000. One manager spending 3 hours per week on the schedule will cost the business more than $4,000 per year! Now imagine that same store is a concept with one-hundred locations – that’s almost half-a-million dollars in wasted manager time building theoretical labor schedules annually!
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.
Example: A car dealership has three managers, each making an average of $70,000 per year. Additionally, the car dealership has more than one-hundred (100) non-management staff, including sales personnel and mechanics. On average six employees (6% of the non-management staff) call in to check their schedule or swap shifts on a daily basis, using a total of 30 minutes per day (5 minutes per call). The dealership is open 300 days per year, costing the dealership more than $3,000 per year in schedule change costs. It may take another 6 hours per week to schedule the staff , more than $10,500 per year in direct scheduling costs!
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.
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