Workforce planning: How to effectively manage employee shift patterns

The ability to predict the future would be the holy grail for any business. Of course, absolute certainty about what might happen tomorrow will never be possible.

But tools being developed today are helping businesses to get a better view of how busy they are likely to be in coming days and weeks.

Why workforce planning matters

Accurate workforce planning could be extremely valuable for small and medium businesses.

If you’re able to schedule the right number of employees, in the right places and at the right times to meet demand, you get round two big problems:

1. The costs of overstaffing
2. The service glitches that happen when there aren’t enough people on shift.

You can also scale up or down quickly for busy events and periods to maximise profitability.

Research shows that effective workforce planning increases sales and employee productivity. In one study, when a retailer gave store associates more stable schedules that matched demand, sales and productivity rose by 7% and 5% respectively.

Right now, many business owners do their workforce planning based on gut feel or using cobbled-together spreadsheets and workarounds.

Inevitably, this doesn’t always hit the mark.

Today, more than ever, you need accurate answers to questions such as:

• How many customers will we need to service throughout the day?
• Who are the best people to schedule according to their skills, experience and availability?
• What’s the optimum number of people we need to meet demand?
• How can we make sure we schedule people in a way that’s always efficient?

Smart workforce planning

There is a more scientific way of getting these questions answered. First, efficient workforce planning needs to know two things:

1. Demand signals: What drives your volume of business?

This is the secret sauce to predicting demand and staffing needs. For example:

• Historical data on customer flow. How many customers did you have at equivalent points in the past? Accurate customer trends are an important metric on which to base your forecast.
• Sales trends and product popularity. What’s selling out? What’s not selling at all? Historical metrics help you make sure you have employees in the right part of your business.
• Labour percentage. For some businesses, the cost of labour compared to sales is a critical driver.
• Weather and seasonal trends. If you know it’s going to be a sunny weekend, or that there’s a public holiday or major sporting event on, this can influence how busy you’ll be, depending on the business you’re in.

2. Employee availability: Who have you got?

Understanding the available pool of employees is the second critical data input for efficient workforce planning. For example:

• How many people do you have in total?
• What’s their availability, taking into account shift preferences, the days per week they work, holidays?
• How are they contracted? Full time, part time, variable hours, etc.
• How much are they paid?
• What are their individual capabilities, qualifications and skill levels?

Sources for data

Where you look for these two data inputs from depends on how your business is set up.

Electronic point of sale (EPOS) systems will have historical sales data for many businesses. Booking systems or practice management systems will be able to tell you about trends in customer flow over time.

And data about labour costs and availability could come from HR software, payroll systems, or workforce management software.

Making it smart

To get the maximum value from these data inputs, the key is to make sure they feed directly into a system that can then use them to answer critical questions about demand and scheduling.

Using cloud-based apps makes it easy to do this. You can collect all key data in a business insights app or use data from one app to improve the performance of another.

One example might be feeding sales forecasts into a workforce management app to inform employee requirements.

Starting with just historical sales and employee availability can already drive major savings.

Here’s what smart workforce planning looks like:

• Optimum scheduling. Using your own business logic, you can automatically schedule the employees needed to meet demand, turning guesswork into an accurate and scalable scheduling model.
• Clear insights. For example, being able to track the variance in workforce percentage and adjust schedules accordingly, or setting custom metrics against demand signals that are unique to your business.
• Tighter budgeting. With hours and wage budgets clearly available at all times, managers can easily see their room for manoeuvre, which is particularly important when cost control is under sharp focus.
• Constant visibility. Real-time performance statistics can help you stay on top of performance throughout the working week.

Final thoughts on workforce planning

Right now, many companies are focused on survival and recovery, keeping costs to a minimum and sticking to tight budgets. There’s also a need to scale up or down quickly, while at the same time being confident you have the people when and where you need them.

Smart workforce planning is ideally suited to today’s imperatives. Tight scheduling and clear data on workforce percentage helps minimise waste and keep costs low.

And with planning based on real metrics rather than guesswork, it’s much easier to scale up or down without increasing admin, and to plan for future peaks and troughs.