You walk into your office at 8:00 AM ready to take on the day. Coffee in hand, you log into your computer to check your emails. You go to take a sip and suddenly you choke reading the top email. “Subject: Short 20 production operators! Need help!”
The email is from your 2nd shift production supervisor. You received a rush order from one of your largest customers that your team cannot let fall through the cracks. You frantically call your staffing agency and see what they can do. The person through the other side of the phone is baffled, “This afternoon? The best we can do is about 5 workers…”
Great. Now you’re short 15 workers, the blame is going to fall on you because you didn’t plan ahead, and you have a coffee stain on your new shirt.
What could you have done differently to be seen as a strategic, proactive business partner instead of reacting to the problem?
Started with a resilient labor plan
Partnered with a labor provider that can meet your flexible needs
Put a lid on your coffee cup
Creating an effective labor plan is essential for maintaining operational efficiency, especially during peak seasons. According to a Deloitte report, 74% of businesses report significant labor shortages during peak seasons due to inadequate labor planning (MadiCorp). Below, we will walk you through how to develop a robust plan, ensure you are well-prepared to handle any challenges, and talk about what a modern labor solution can do for your business.
Let’s dive in.
Inputs for Your Labor Plan
Labor plans ensure efficiency, cost control, and adaptability for your business. Starting with the right inputs to your labor plan enables you to craft the right outputs.
1. Understand Your Data
Begin your labor forecast by collecting and analyzing historical data:
Historical Analysis: Review last year’s sales volume, last-minute order requests, turnover rates, and staffing fill rates. This will help you identify trends and inform your labor planning for the upcoming peak season.
Key Metrics: Focus on overtime rates, labor costs, and efficiency metrics. Use this data to build a solid foundation for your forecast.
2. Collaborate with Stakeholders
Discuss with key department leads to gather insights and drive alignment:
Cross-Functional Collaboration: Depending on your function, work closely with sales, operations, finance, and HR to confirm your beliefs about historical data and gather insights on volume forecasts for the upcoming season. Get CFO or executive input early to align throughout the planning process.
Data-Driven Decisions: Leverage data to help you make decisions. Gone are the days of finger-in-the-air estimates. Encourage supervisors to justify their labor requests with data-backed reasons.
Building the Labor Plan
Developing a labor plan can be daunting, especially if you aren’t an excel wizard. With a simple framework and a good template (download one here), you can get anything done.
3. Forecasting Demand
If you aren’t responsible for forecasting demand, you still may be able to assess the strength of those forecasts:
Historical Trends and Market Analysis: Use your historical data and research current market trends to predict demand. Iterate with key stakeholders for a comprehensive forecast.
External Factors: Take into consideration seasonal and economic conditions that could impact your needs. Confirm with your service providers and customers what to expect and adjust accordingly.
4. Building Your Labor Requirements
Establish your labor needs based on your demand forecast:
Staffing Matrix: Determine the full-time vs. part-time split needed for your operations. Factor in turnover rates and agency fill rates. You can do this by role or department.
Buffer for Contingencies: Include a 10-15% buffer to handle unexpected fluctuations. Plan for last-minute hires and no-shows to ensure workforce stability.
Labor Efficiency Ratio: Determine your historical labor efficiency ratio for benchmarks. If your forecast doesn’t align with historical benchmarks, consider making changes.
Operational Considerations
Now that you have your labor plan built, you can focus on how to best utilize it.
5. Monitoring and Adjusting in Real-Time
Monitor your labor performance and adjust staffing plans as needed:
Performance Tracking: Monitor labor performance and forecast accuracy. Ask your staffing agency to provide fill rates, time-to-fill, and consistency rates (double check their work). Adjust staffing plans based on real-time data and feedback.
Overtime: Use overtime as a strategic tool to fill the gaps. If your staffing agency isn’t able to meet fluctuating demands, paying for overtime is better than losing a customer.
6. Handling Peak Season Challenges
Prepare for peak season by building flexibility and resilience into your labor plan:
Flexibility and Resilience: Prepare for 24-48 hour windows where quick adjustments are necessary. Train your team to handle peak season pressures effectively.
Empowering Your Team: Encourage proactive communication and action from your managers. Ensure everyone is aligned with the labor goals and understands their roles.
7. Find a Flexible Labor Provider
Prepare for peak season by seeking a labor provider that can be as nimble as your business requires:
High Fill Rates: How is your staffing agency defining fill rate?
They should be defining it as the number of people that show up compared to the number you requested.
The average staffing agency in the light industrial space can only fill about 64% of roles and the top 75th percentile can only fill 80% (Staffing Industry Analysts, 2023).
You should find a provider that can consistently fill at least 95% of your roles. Impossible? We’re sure your staffing agency would say that.
<1 Day to Fill:
Just-in-time delivery has become the norm and competing with 2-day shipping is becoming increasingly difficult.
You need a staffing solution that is as flexible as your business requires.
You should have a partner that is capable of delivering that competitive edge.
Conclusions
As Dwight D. Eisenhower famously said, “plans are worthless, but planning is everything.” Nothing could be truer with a labor plan. A well-thought-out labor plan is the key to operational success. While it won’t save you from coffee stains, it will help you prepare to understand how to balance the complexities of your labor. Even if things don’t go according to plan, the act of planning will help you stay sharp to think through all of the contingencies. By adopting a solid planning process, you can go into peak season with confidence.
Prepare for a successful peak season. Download our Labor Planning Template and visit the Traba Case Studies page for additional resources.
Contact Traba today to learn how we can support your labor needs.
