A stitch in time saves nine

Related tags Supply and demand

A stitch in time saves nine
The promise of reduced labour costs, increased productivity and no overtime is any employer's dream, but by challenging traditional shift patterns it could become a reality. Rebecca Green reports

No employer wants a workforce that depends heavily on overtime. But with European trade barriers coming down the pressure is now on for UK firms to ensure they don't get overtaken by leaner firms abroad.

This means addressing our long hours culture, says Kevin White, director of sales and marketing at Working Time Solutions, a company which helps businesses schedule labour to meet demand by developing packages tailored to company needs.

The problem with food manufacturing, says White, is that it is subject to seasonal fluctuations in demand throughout the year. This volatility is exacerbated by the control major retailers have over the supply chain, which means companies must manufacture 24/7, he adds.

"The traditional response to this situation is to rely on overtime and agency labour and to contract hours per week, regardless of demand. But often this means companies are not utilising their labour, at their expense," says White.

No incentive = low productivity

Often, low rates of basic pay and traditional working arrangements cause the workforce to become dependent on overtime earnings, he adds. Workers have no incentive to up their work rate and the low productivity creates more need for overtime, resulting in staffing problems such as fatigue, stress and high levels of short-term sickness absence.

"There can be a misalignment of objectives - the business is motivated to do one thing and reach a certain target, but the workforce benefits from doing another or not reaching that target," explains White.

The solution is to challenge traditional, and often inflexible, shift patterns, which is where the system of annualised hours (where contracts state the number of hours to be worked over a year rather than per week) can help. Employees are paid the same amount each month, regardless of the hours they work, thus removing the boom and bust nature of overtime, says White. Furthermore, the business can often offer incentives and increase pay because the business is operating more efficiently, making the prospect more attractive for workers.

Ditching these traditional employment contracts also combats another problem, claims White - that of a dwindling agency pool, which is suffering as a result of high levels of full employment. "Businesses are having to look at different ways of turning their labour supply on or off, at the same time wanting to provide secure jobs and increase profitability."

Add to that the increasing competition from global companies and it's easy to see why manufacturers are under more pressure than ever to maintain high productivity. As White starkly points out: "Labour supply needs to be in step with the needs of the business and its objectives - the alternative is to sleep-walk into obscurity within the global marketplace."

But money isn't the only factor driving this need for change. Corporate social responsibility is a key issue influencing some of the larger firms, who simply can't justify a 50-60 hour working week, says White. "Fatalities, although rare, also spur companies on to make changes. So it's not all about reducing costs - principles are at stake too." Social factors are also playing their part, he adds: "It's not like it was five or 10 years ago. Now people want a work/life balance, so there is more pressure to make rotas attractive to the workforce. Most of the big firms also want to ensure they adhere to the Working Time Regulations."

According to White, firms are increasingly turning away from the one-size-fits-all approach, where an entire plant will work the same shifts, and towards looking at different patterns and shifts across the factory. Rotas are being tailored to the varying demand profiles, says White. Not surprising then, that demand for the company's services has increased dramatically in recent years, leading it to work with key players including Unilever, Northern Foods, Heinz and Greencore.

But what do the workers themselves think about such changes? Responses differ, says White. "Obviously, those who work lots of overtime, perhaps rely on it, will probably have some resistance to the changes. But most will be able to see the benefits it offers - namely a more useable pattern of work. The majority who go down this route would never go back."

However, as we all know, people - particularly employees - don't like change, which means planning is essential to avoid disruption to the workforce and keep them on board during the changeover period. "Planning and transparency are key. Trying to introduce these changes on a shoestring won't work. You need to bring the workforce on board, not impose change on them," warns White.

He admits that it can sometimes be a challenge, especially as different shift patterns are not well understood.

To combat this and help minimise disruption, Working Time Solutions uses its own custom-built computer software to work out shift patterns, looking at the business demand and how it varies throughout the day and week.

"It helps the workforce understand how they will be working if they can see the patterns for themselves, mapped out over several months or a year. People don't like change, so sometimes we take the workforce to other sites where change has been implemented successfully." Workshops, management software and helplines are also available to aid a smooth transition.

The key thing to bear in mind, says White, is that these solutions are tailored to meet specific business needs. "There's often a temptation to look at what someone else has done and transpose that on to your business, but that's unlikely to work. The solution has to meet the design of the business, has to involve the workforce and there has to be a degree of transparency. The annualised hours environment is all about building trust." FM

Working Time Solutions​ is holding an event to discuss these issues on March 7 and 8 at The Celtic Manor Resort. For more information contact 0161 929 3333

Annual hours cut the mustard at Colman's

Unilever has reaped the rewards since introducing annualised hours at its Colman's factory in Norwich.

The firm was keen to move away from a traditional working environment where employees worked at less than capacity to generate maximum overtime, to one where they were encouraged to get the job done quickly and efficiently, while sustaining high productivity and motivation.

To achieve this, rosters were set annually and time off was rostered into the shift pattern, rather than holidays being taken on a first-come, first-served basis.

The annual roster offered 1,900 contracted hours, using 1,732 hours as actual rostered time and leaving 168 hours in reserve to be used in times of increased demand or labour shortage. All contracted hours were to be paid to encourage job completion without having to use reserve hours, thus removing the need for overtime.

Implementation began with a pilot, ensuring the workforce was consulted at all stages, including over the setting of a new, higher pay scale and a 5% performance-related bonus package.

The company says it now has real employee commitment, motivation and a cohesive team environment. The clocking on/off procedure has been abolished, and employee absence halved. Much of the time spent administrating payroll and overtime is no longer necessary, and management has saved time in the day-to-day organisation of labour. Manufacturing efficiency has risen by over a third, from 55% to 85%, and production waste has reduced by half, it claims.

Unilever says workers are now highly focused on line improvement. And because motivation is high, machinery is maintained more effectively.

"Team spirit has improved and the workforce now shows a high level of trust and anticipates future change with a positive attitude. "

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