Management Time is Money, Schedule it Wisely

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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Building a Labor Schedule is Complicated. Use Tools to Keep Managers and Employees Happy.

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).

Example: At a nightclub, management juggles the work preferences and needs of more than ninety individuals including bartenders, servers (waiters and waitresses), cooks, dancers, security, disc jockeys, paid performers and management staff. After the business closes on Thursday night, the manager spends three hours building the schedule and trying to meet every employee’s needs , as well as the business’s needs. There is always some give-and-take when building a schedule, and after finishing the schedule, it is posted on a wall in the management office so that employees know when to work. A second copy of the schedule is saved in a folder for later comparison with the employee clock-in and clock-out times to identify schedule irregularities or areas of improvement.

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.

Example: If the manager of the nightclub receives $60,000 per year in salary, the schedule process at this nightclub costs more than $90 per week, $360 per month, and $4,320 per year , just to make an employee schedule! With a tool such as TimeForge, building a schedule could cost less than $8 per week, $32 per month, and $382 per year.
Using TimeForge creates an extra $3,936 in profit , every year!

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!

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Employee Scheduilng Software – Version 1.8.1

What’s new in TimeForge.com? In addition to some minor bug fixes and security updates, managers can now filter employees by the positions that they work.

For example, you can now view “Waiters” or “Secretaries” instead of all employees. It is, admittedly, a minor new feature , but assists managers when editing employees.

How long does it take to make your labor schedules? It should take less than 5 minutes! Did you know that TimeForge can streamline and minimize labor costs through effective employee scheduling at your restaurant, bar, club, or business.

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