Today's post is courtesy of board member Bob Clements, President at Axsium Group, a leading workforce management consulting firm.
Here are three ways to fix your organization's labor shortage:
Fix #1: Increase wages
The first solution is to increase wages. Companies like McDonalds, Under Armor and Bank of America have all announced wage increases to attract workers ”“ moves that have been well received by both employees and the public at large. In principle, it is easy to throw money at the problem, but in practice, it may not be possible. Higher wages cut into profits so you will need to make a strong case that wage increases will pay for themselves, and then some.
Another approach might be to examine the risk of not increasing wages by equating labor shortages to decreased customer service and, in turn, reduced sales. No matter what, you face an uphill battle to get the executive support needed to raise pay.
Fix #2: Increase hours
The second option is to ask your existing employees to work more hours. Giving more hours to your current workforce reduces the need to hire new workers, along with the training and onboarding expenses associated with hiring.
Two big hurdles need to be cleared for this solution to work:
Fix #3: Increase productivity
The third solution is to increase the productivity of your existing workforce. Increasing the output of workers already on staff reduces the need for more workers and the need for overtime.
There are two paths to improving productivity:
One size does not fit all when addressing a labor shortage. Each organization and its workforce is different, and what works for one may work differently for another due to culture, demographics, geography, industry and more. The good news is that each of the solutions outlined above can be used alone or in combination with others. They can be implemented in parallel or sequentially. The important thing is to act because one thing is certain: You won't solve your labor shortage by waiting for more workers to appear.
The following guest post is courtesy of our board member, David Creelman.
With Spring upon us and Summer right around the corner, many businesses are actively hiring seasonal workers to ensure they have coverage for their busy seasons.
For example, just last month, Home Depot, the nation's largest home improvement chain, announced that it was hiring more than 80,000 workers nationwide to ensure that its nearly 2,000 stores are staffed and ready to welcome spring 2016, its busiest season.
The home improvement industry isn't alone, of course: golf courses, recreational facilities, summer camps and programs, seasonal restaurants and retailers, along with many others are all in hiring mode right now to match this seasonal business cycle.
Beyond just getting bodies onboard, leveraging this seasonal workforce can be a big competitive advantage. Whenever we are dealing with a potentially big strategic advantage; particularly one involving large numbers of workers; we want to call on the power of people analytics.
So how can people analytics help? The truth is, they can help in so many ways that I could never name them all in a short blog post, but I can say that there are a few questions that every seasonal employer should be asking themselves right now:
• Are we scheduling in a way that minimizes labor costs?
• Are we scheduling in a way that minimizes turnover?
• Are we running an analysis to discover the right trade off between the two?
• Would increasing training for seasonal workers pay off?
• What are the most costly mistakes seasonal workers make, that regular workers don't make?
• What is the most effective way to screen seasonal workers?
You can approach these questions with sophisticated statistical methods, but you don't need to. If you don't have the data, tools, or skills for advanced analytics, you'll find you can go surprisingly far with the back of an envelope or Excel. Yes, you want to do as good a job as you can; especially when it's a strategic issue, but my mantra is that some numbers are almost always better than no numbers. Don't let lack of heavy duty analytics horsepower be an excuse for not thinking about these issues.
My challenge for businesses is this: is it a normal part of your culture to bring analytics savvy to challenges like optimizing the effectiveness of your seasonal workforce? We are all enamored with Big Data and the latest analytics tools; but in my experience the lack of an analytics culture is usually the bigger problem. My advice? Especially if you are starting from scratch, focus less on what the analytics tools are, and more on creating an analytics-focused culture that puts value on numbers-based analysis.
I recently had the opportunity to talk about the importance of labor cost management in manufacturing with David Caruso, the founder and Principal of David Caruso & Associates, Inc. David's consulting firm specializes in manufacturing, supply chain, and technology strategy. We talked about how manufacturing organizations are increasingly focusing on labor cost management in the current challenging economy.
In our conversation, David provides a number of examples of how manufacturers have used labor analytics tools to analyze and improve both worker productivity and product quality. In one firm he assisted, they found that quality eroded over the course of the day due to worker fatigue. They inserted more breaks into their process and achieved significant improvements in productivity and quality. Click here to listen to a podcast of our conversation and hear more tips from David Caruso.
You can find additional information on this topic in this new Kronos whitepaper as well as in this article from IndustryWeek by my colleague Gregg Gordon on effective ways to manage a global workforce.
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