Here's how to deploy your 2019 labor for maximum effectiveness

It's a LOT of work just to figure out how many employees you need each month of the year. This is true whether you're in a contact center, or planning for a retail company. In addition to figuring out the core workload requirements, you have to calculate the seasonality of the work. While most industries have clear seasonal patterns, they can fluctuate and can be impacted by external factors such as the economy, an election year, or consumer confidence.

Once you have the forecast locked down, it's time to figure out how to deploy labor to meet the need. The most accurate forecast won't really help you if you don't apply your resources effectively. 

Many businesses leave a lot of money on the table here, by letting momentum or dogma dictate the employee mix. This can especially be true for successful businesses. It's hard to take a serious look at your methods when you've been successful. I remember going to Blockbuster on a Friday night. In my pocket I had my Kodak camera I bought at Circuit City. But I digress...

Innovation isn't just about how you go to market with products. It also takes innovation in how the operations are managed to ensure efficiency and ongoing profitability. Efficiency itself isn't the end game. The customer is king. If you love what you do for your customers, then the more efficiently you do it, the more you can reinvest in growth and serve more customers.

As we continue with the annual staff planning process, the first step in understanding how to allocate your resources is to develop a visual of the need. Visuals are great for this because they provide a view to all, and not just the few who love to dissect a spreadsheet. 

In the example below, this business has a clear seasonality. The FTE (Full Time Equivalent) requirement is lowest early in the year, and then in the summer. There are peaks in Q2 and Q4. The challenge is, if they staff to the mid-point of the year, they will likely underservice the customers during the peaks, and will overservice (and overspend) during the low points.

Before actually deploying resources against this requirement, it's important to layer in all offline time that has to be offset. Examples of this are vacation time and employee trainings. These should be plotted inverse of the workload requirement to try to flatten out the monthly requirement across the year as much as possible. Reducing the fluctuations in monthly need reduces the need for flexibility. In the example above, as much as possible, trainings would happen in August, and you'd be "all hands on deck" in May.

Let's assume that's already done here and this is the final result we need to staff to. How do we start?

First, look at the number of employees you need all year. The lowest month is January at 120, so at minimum, 120 employees will be needed, full time all year. This can be 120 employees working 40 hours a week or 240 employees working 20 hours a week. The key is it requires 120 Full Time Equivalents. Looking at the rest of the year, after January the next lowest month is 139, in August. This is actually the number of employees I'd carry for the full year. Remember that your forecast is outdated as soon as it's published. The January staffing number is so low that if the plan is to carry 120, you may become severely understaffed or too heavily dependent upon contingent labor to hit your customer service goals.

If you look at the chart, 139 looks right visually as well. You can imagine a box in the chart that shows how you've covered most of the demand.

Solving for the balance of the year is about having contingent labor (note: Overtime can be used in place of contingent labor for short durations). This additional laobr can take many forms, such as outsourcing, temp agencies or borrowing internal resources from other departments. Often companies will outsource a % of the work to achieve these short-term, but constant annual needs. Building a relationship with a provider will ensure that seasoned, trained employees can come back and service customers, with quality, year after year.. you're not starting over at ground zero. Remember, it's all about the customer. 

Here is a resource solution for the demand:

Is this "one size fits all"? No. Every business has a unique set of customers, values, mission, culture and priorities.  It's best to start this exercise with guiding principles for labor mix. With high-touch customers or premium services, the default % of in-house employees needs to be high. The expense is part of the cost of doing business. In businesses that are highly transactional or has a low customer-service threshold, there can be a higher % of contingent labor, maximing flexibility.

The key is to start with your business needs, and then find the most efficient way to allocate your staff to the need. This is the first step in having a flexible workforce, with a balance of fixed and variable labor costs. It will improve efficiency and ensure the employees are there for the customers - All year long.

Charles Watson

Principal Consultant

Innovative Workforce Solutions