28th April 2011
Kevin White, Managing Director of Working Time Solutions, considers how working time change can present the potential to save jobs and reduce redundancies.
As the public sector tightens its belt and the private sector prepares for a sustained period of low growth, pressures are increasing on managers to reduce costs. For many that will mean reducing the cost of labour. Even in public services with ring-fenced funding, such as the NHS, there are signs that jobs are being cut to meet efficiency targets. But the crude measurement of labour costs by senior management through simple estimates of headcount may lead to unnecessary culling of frontline jobs. In today’s economic environment such a response could spell misery for thousands of workers.
Transforming the way that people work could offer opportunities to reduce costs and improve the quality of the service or the performance of the organisation. But achieving significant change can be hard, particularly following a difficult period where industrial relations have been strained. Yet in some areas of the private sector, such as the automotive industry, close engagement of the workforce and cooperation with trade unions during the recession enabled managers to alter working patterns, saving costs and jobs. Learning this lesson and applying it more widely could prove valuable in other areas of the economy now.
For many organisations, the cost of overtime and temporary and contract labour add significantly to the overall cost of labour. If there is greater flexibility within a core work-force, these areas present a better starting place for cost reduction.
So how can organisations begin to rethink their approach to working time? Lean Employee Resourcing is a concept developed by Working Time Solutions, which uses tools and techniques drawn from Lean, Annualisation, Demand-led Rostering and Employee Engagement. The aim of Lean-ER is to drive out cost, to reduce some of the unhealthy dependencies and traditional ways of working, and to gain greater flexibility through improved planning and management of working time.
Take, for example, a street scene operation Cheshire West and Chester local authority. Workers were scheduled to work ‘school hours’, from 8am to 4pm, Monday to Friday. They were paid overtime to clear up the debris left at night by city centre revellers, and their time was not best used during weekdays. When holiday time came along overtime was paid for cover, or service suffered, leading to high overtime and agency costs. Service provision was unaligned to demand and employees were often working long hours. The local authority worked with WTS to identify budget savings and improve the current working arrangements.
Employee engagement was an essential component of this project, and so working parties were established to ensure employees understood and contributed to the process and solutions developed. This was the best way to ensure all factors, constraints, demands and work-life balance aspirations were taken into account.
New working arrangements meant that the service was able to use planned cover from the core workforce at weekends and other peak times, so the need for overtime was eliminated, which reduced overall costs. Reduced cover during the week increased overall productivity by eliminating under-utilisation. Importantly, cultures changed as productivity increased and the perception of service improved. Work-life balance was re-established and job security was stepped up.
This simple example of overtime dependency is replicated across the country in warehouses, in transport and engineering shops, in manufacturing and service industries from hotels through to call centres. Lean Employee Resourcing seeks to understand the patterns of demand for labour and to design ways of working that will meet that demand through the core workforce. New patterns of work aim to provide planned mechanisms to deal with changes in demand and issues relating to labour supply such as holidays, sickness absence, maternity and paternity leave.
So how do we change and engage the workforce? Working time is a highly sensitive topic. If working time is changed, so are leisure and family time and this may not immediately suit the individual. Think only of recent reports from the negotiations between the London Fire Authority and the London Fire Brigade to appreciate how emotive a subject this can be. But so often, where the ‘problem’ is understood by all the stakeholders, and engagement is achieved with the workforce and unions, new working time arrangements are accepted, and soon the traditional systems of working look tired and outdated as different opportunities for leisure, and sacrosanct time-off, appear.
Achieving engagement is often about stating the business agenda, explaining clearly and in an adult way, the issues and the problems to be resolved together by the union, workforce and management. This may be a need for greater flexibility, a need for cover at weekend or nights, increased staffing from the core, or indeed, less overtime. This demands courage, openness and transparency, the ability to communicate and sometimes to educate the various stakeholders involved in the methods and structures for carrying out this type of work. Software tools are now available which allow all involved to examine the possible options and to play “What If?” with different patterns and rosters. Staff can participate in this and often the process will show new opportunities for savings, productivity improvement, for leisure time and more acceptable patterns of work which facilitate buy-in from the workforce and create a “Win-Win” scenario. Remember that not everybody is interested in working high levels of overtime, but those who are may form a vocal minority. The point here is to appeal to all of the workforce and to have representation in working parties or engagement groups from across the board.
For some, there may be loss of earnings and sometimes this may have to be mitigated by a phased reduction in overtime hours or an opportunity to buy into a package which offers more hours for some less for others. But management teams have to be aware of their responsibilities for health and safety and that long hours working and the consequent stress, fatigue and potential for accident may present risks to the workforce.
At the Unilever site “Colman’s of Norwich” changing working patterns not only increased productivity by 30% and reduced waste by a half, but also contributed to saving the site from closure, and over the years carried the business through an enormous amount of change in culture and performance. The changes to ways of working promoted employee engagement and acted as a catalyst for other changes. Today Colman’s is a well-established best-practice site, and a ‘Factory of the Year’ winner.
At the East Midlands Ambulance Service, the introduction of Agenda for Change, the NHS national pay and grading system, with new service targets and reduced working hours, presented a colossal challenge. It was met by implementing demand-led systems that incorporated rostered holidays, self-managed rosters, shift-trading and enhanced meal-break cover. Three hundred new jobs were created for paramedics and technicians, and the workforce and unions were actively involved in the design of patterns and ways of working. It was this involvement that helped underwrite the change and the gains that occurred for both the service and the workforce. By involving the workforce, managers not only ensured that solutions were workable, but that changes were more likely to be implemented successfully. Few among them would now return to how it was before.
The concept of Lean-ER is therefore highly relevant to many different types of organisation: anywhere, in fact, where there is shift or extended-hours working. Today, the opportunities are breathtaking. Instead of mass redundancies and job cuts, working time change and Lean-ER provide means of improving productivity and keeping the jobs.
So what is the cost? Change from the familiar and the comfortable. Obviously there are overheads and risks associated with any significant change project. For some, there will be the loss of overtime earnings.
But if redundancies are rendered unnecessary, if jobs can be saved or even created, if opportunities for improvement to work-life balance ensue, these costs are more than worthwhile.
Kevin White is Managing Director of Working Time Solutions
kevin.white@workingtime-solutions.com
