Exploring a ‘new’ way of working with Demand-Led Rostering and Annualised Hours

Exploring a ‘new’ way of working with Demand-Led Rostering and Annualised Hours

1. Brexit, the productivity puzzle and precarious employment

Employers face a perfect storm of strategic workforce challenges created by economic volatility, globalisation, changing demographics, rising costs, legislation and increasing scrutiny. Having stabilised after the financial crisis and subsequent recession, many organisations are looking at how to manage through rises to the National Living Wage, Brexit and the impact of legislation such as ‘The Good Work Plan’. All of this whilst supporting job security and the well-being of their shift workers. The fluid situation created by leaving the EU will require employers to increase their productivity and flexibility if they are to thrive, or even survive, in an uncertain post-Brexit world.

You can read more about the shift planning, rostering and workforce management challenges Brexit poses in our white paper.

Ultimately, with the average worker in France and Germany producing more in four days than the average UK worker does in five, the UK needs to address its productivity gap if it is to make a success of Brexit. In addition to economic and political upheaval, societal and technological change is drastically altering the shape and nature of demand. We’ve seen exponential growth in the use of zero hours contracts and agency workers with many organisations’ operational models becoming reliant on them.

In a Guardian article Neil Carberry, Director for People and Skills at the Confederation of British Industry said:

  “One of the attractions of flexible contract options for businesses is being able to meet more volatile demand patterns in increasingly 24/7 markets”.

However, referred to as ‘Precarious Employment’ by the media, this approach to resourcing regularly creates reputational issues for employers and is increasingly under scrutiny. The Taylor Review of Modern Working Practices (The Good Work Plan) has begun to influence Government policy in this area with a slew of new legislation including giving workers the right to request a more stable contract.

Under ‘The Good Work Plan’ all employees and workers with varying hours and shift patterns (including agency and zero hours workers) will be able to formally request a more fixed working pattern after 26 weeks of work for the same employer.

Over the past few years, we’ve also seen significant rulings on both holiday pay/overtime and travel to work time. The potential for further changes to working time legislation (related to Brexit or precarious employment) is a further consideration for organisations trying to find shift work solutions which will be fit for purpose now and in an uncertain future. Employers need to take a long hard look at their shift work models and ask whether they are fit for purpose and whether shift patterns can respond quickly and effectively to change.

As John F. Kennedy said:

“There is nothing more certain and unchanging than uncertainty and change.”

2. The fundamentals of Demand-Led Rostering and Annualised Hours

History:

You can trace Demand-Led Rostering and Annualised Hours’ roots back to experimental labour models which were pioneered in the Scandinavian paper industry during the mid-1970s. Their principal aim was to limit the use of overtime and to increase leisure opportunities for the workforce. The success with which it achieved this saw the new approach adopted across many industries and territories.

Demand-Led Rostering and Annualised Hours first found its way to the UK in the early 1980s in response to increased holidays and reductions in basic working hours agreed within largely continuous process-based industries. It gained notoriety in the early 1990s as businesses used it to respond to challenging market conditions by reorganising and reducing working time. The move from a mutually beneficial labour model to blunt cost cutting tool has done little to help its widespread adoption over the past two decades.

However, when planned, designed and implemented properly, Demand-Led Rostering and Annualised Hours remains one of the most efficient and effective means of organising shift work and ensuring an organisation and its employees’ interests remain aligned.

The need for Annualised Hours:

Shift patterns are often tied to legacy working practices or institutionalised habits. These can bear little resemblance to the fluid situations an organisation faces, ultimately creating harmful misalignment between demand and the supply of labour.

Inflexible shift patterns are often at the heart of resourcing issues, with shift work models meeting neither the demand the organisation is experiencing or the needs of its shift workers.

• Over-supply creates inefficiencies which can lead to job losses and skills drain.
• Under-supply generates reliance on expensive peripheral temporary forms of labour such as overtime and agency staff. Typically, overtime is non-contractual and therefore reliant on goodwill.
• In many instances, imbalance of supply and demand leads to shift worker stress or sickness and breaches of working time regulations or health and safety legislation.

Furthermore, traditional forms of working can actively encourage low productivity, high waste and poor service by financially rewarding the working of additional hours. Rather than viewing overtime as a temporary measure to overcome exceptional circumstances, many managers and employees see it as a regular day-to-day element of their shift working lives.

Looking at how overtime is worked within an organisation, it is often the case that 80% of overtime hours are worked by 20% of the workforce.

At a manufacturing site owned by Unilever, prior to the introduction of Demand-Led Rostering and Annualised Hours, there were times when employees used to ‘know’ on a Tuesday that they would be required to work overtime on a Saturday; it was planned!

Demand-Led Rostering and Annualised Hours is a proven and effective solution to this problem. Adopting this approach enables truly responsive shift planning, rostering and workforce management models to be created using shift patterns that ensure exactly the right amount of resource is available at exactly the time it is needed.

3. Annualised Hours…a misunderstood approach

• Adoption of off-the-shelf solutions
• Failure to ensure shift patterns remain aligned to demand
• Inadequate workforce management software used to manage variations; leading to errors and eroding confidence
• Employees not being engaged with the shift pattern design process; leading to mistrust
• Imbalance in utilisation of reserve hours leading to resentment amongst employees
• Failure to effectively manage the call-in process for reserve hours
• Failure to review, continually improve and embed shift planning, rostering and workforce management best practice within the organisation

4. Planning to succeed with Annualised Hours

• What specific problems are faced and how best may they be resolved?
• What are the relative costs and benefits of the Annualised Hours solution?
• What alternatives or contingency positions can be developed?
• How will the proposals be presented and sold to senior management, supervisors and the workforce?
• What problems and challenges are anticipated and what measures are needed to overcome them?
• Should there be a pilot or are there advantages to a ‘Big Bang’ roll-out?

Project plan

• Project management methodologies: What will be used to keep the process on track (e.g. end stage assessment, risk management, exception reporting & change management)?
• Tasks: What needs to be done to achieve the objectives and associated timescales and in what order does it need to be carried out?
• Communication: Who and how will key stakeholders be kept up to date with project progress?

Roles & responsibilities

• Sponsors: Who will take overall accountability for the success of the project?
• Users: Who will represent the individuals tasked with managing the new system?
• Employees: Who will represent the shift workers affected by the change? E.g. union involvement and working parties
• Senior management: Who will communicate the strategic imperative and provide their full support and backing?
• Operations: Who will talk the language of supply & demand and understand the intricacies?
• HR: Who will support employee engagement and communications?
• IT: Who will help implement the technology needed to manage the new system?
• External party: Who will provide specialist insight and technology, outside authority and act as an arbiter or honest broker?

5. Bringing shift workers with you

• Articulate the strategic drivers and imperative behind the Annualised Hours project clearly and honestly.
• Make sure concerns are aired and addressed early.
• Ensure there is a tangible effort to be inclusive and encourage participation.
• Deliver communications in a timely, authentic and empathetic manner.
• Ensure senior management plays a role in tackling anxiety and scepticism.

• Eliminating reliance on long hours and goodwill to meet peaks in demand.
• Improved wellbeing by reducing overworking and practices that impact mental and physical health.
• Better workforce management and therefore much more certainty around holidays, working days and stand-by days.
• Achieving improved work-life balance through shift planning, rostering and employee scheduling that is more responsive to shift workers’ needs.
• More fairness and transparency by providing an equitable distribution of shift pattern types.
• More flexibility to create shift patterns that are aligned to different life-stages, lifestyles and changing personal situations.

• Illustrate the volatility and complexity of demand and the need for increased flexibility.
• Reveal how demand variation relates to an individual’s day-to-day role and shift patterns.
• Challenge assumptions and misconceptions using the truths contained within the demand data.