Staffing? - Good Question
August 4, 2016
Source: James Dillingham
Considerations for answering - How Many Do I Hire?
I’m a shiftwork expert so my posts are always centered on shiftwork operations. That doesn’t mean that there isn’t something that a non-shiftwork operation might find helpful. My hope is that every reader of every post is able to find value.
Most of my work, about 70%, is with companies that want to expand their operations while minimizing capital investment. Basically, I help answer the question “How can I get more out of the equipment I already have?”
Once that’s been determined, my bread and butter is "process and implementation". I help them find where they want to go. I valuate that destination and then I help them to get there.
One question is always “How many people do I have to add to get to where we want to go?”
There are short and long answers to this question.
If you are running three shifts, Monday – Friday and want to go to a 24/7 operation, you need to add 33% more operators. You will also need to add another supervisor.
That was the short answer.
Here is the longer one…
This is really more of a list of considerations rather than The Long Answer.
First, we have to land on an overtime number. This is more than just creating an arbitrary goal of so many days or hours of work in a row. Try answering the following questions for a start:
- How much overtime do you want to have?
- What does overtime cost (the cost to the company not income to earner) as opposed to fully loaded straight time?
- What is the workforce’s appetite for overtime?
- Is the process seasonal in that sometimes you need more people than at other times? What is the level of operator specialization?
- What is your turnover?
- What is the lead time between needing a new hire to having a fully trained person?
The overtime issue is a big one since, with a fixed workload, overtime is a function of staffing. More people = lower overtime.
If production is going to run more days, what does this imply for support operations? Will quality, maintenance, and sanitation requirements be expanded? Often the answers are something like this:
- Quality will be affected slightly. They will need more people but not 33% more. Maybe something like 10% more.
- Maintenance will actually become more efficient as you no longer have to be staffed at a level where you can fix everything on a weekend. When running 24/7, maintenance is often spread out on the more productive weekday shifts. This may actually lower your maintenance staffing.
- Sanitation crews sometimes drop to zero staffing. This is because 24/7 operations no longer sanitize in accordance with a fixed day or time of day schedule. Instead, they run for as long as they can and then the operators simply become sanitors and clean up their own lines; starting back up as quickly as possible.
You don’t need 33% more Plant Managers, HR Managers or Engineers. There is definitely a “cheaper by the dozen” affect when it comes to many of the higher level non-direct labor positions.
Clearly, if production goes to a 24/7 pattern, not everyone at the plant needs to do so as well. In fact, there is a good chance, depending on your operation, that not all of the production needs to go. It’s not unusual for some lines to go to 24/7 while others remain on a 5-day schedule. In some instances, running your high volume equipment more hours will actually take fewer people instead of more if you are able to retire some of you older, more labor-intensive capital.
So there you have it….the longer answer.
The point here is that you need to do your homework. Look at the fully loaded cost of a single employee. Hire too many and things start to get expensive in a hurry. My rule of thumb is to initially staff lean when in doubt. If you are wrong, you can use overtime until you get the staffing right. Coming in with too many people to start with will cause "income shock" to those that just lost all of their overtime AND you run the risk of overstaffing which is expensive and only fixable by painful layoffs.
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