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A Labor Manager’s Dilemma: the value of an hour better placed
What’s the value of an hour better placed? Not an hour saved or eliminated, just better placed?
We should never forget that Labor Management is a challenge of managing the quantity of hours, the quality of hours, and the cost per hour. All three are separate challenges requiring focus and efforts.
Understanding real work content based on accurate volume data driving realistic labor standards tied to best methods is the right way to quantify the hours needed.
Quality of hours is about the placement of those hours in your work plan and schedule and how they get used to fulfill the work intended.
Cost per hour is really about managing rates, especially eliminating unnecessary overtime or other premium cost hours when they are not essential.
So what is the value of an hour earned but correctly placed rather than incorrectly placed?
If the activity is not involved in direct service to customers or is otherwise time-critical, and if your workforce is nimble enough to fully utilize the time in an alternate window, then there is little if any difference. But those are big ifs.
It is far more likely that the hour is tied to some aspect of customer service – direct service, or preparations to be ready to serve – and this is where the potential for so many extra hours of labor capacity can be found. If your forecast is misplacing hours, is your workforce able to revise their plans to use them properly? What can you do to minimize managers needs to react to hours inappropriately placed?
Make sure you are open to discovering the full potential of an hour better placed and be certain you have the tools to mine those opportunities. You may not change your labor spend, but you can do wonders to customer satisfaction and top line sales growth!