Although the 2021 labor shortage is affecting multiple industries and sectors, it is vital to take a closer look at your own company data to find out its impact on your team. As a reaction to the labor shortage, many companies are jumping into panic mode attempting to solve their staffing issues by offering over-the-top incentives for candidates without really analyzing their predicament. In order to manage and reduce the labor shortage’s impact on your organization, you and your team will need to access and review your specific data and metrics. This analysis will allow you to be better prepared to make decisions that better navigate the situation.
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What Data and Metrics to Look at First?
- Are your targets and forecasts realistic? What does your forecast for the upcoming quarters look like? Is it based on optimal staffing? What years are you using for comparative analysis and what was staffing like those years? Take a real look at those targets and adjust them to be realistic. This is the time to work as a team and ensure you are involving HR, Finance, and Operational leaders to get a more comprehensive picture of what’s really going on.
- Segment your data: There are logical groupings that your team already uses to report data, like departments, geography, or shifts. Look at those natural segmentations and see if you can find a specific pattern or outlier. That might give you an idea of where your most significant gaps may be. For example:
- A retailer or restaurant breaks down its business into high-volume, mid-volume, and low-volume locations. This segmentation may reveal that staffing shortages impact mid-tier locations the most. That could be because high-volume locations are likely high-traffic locations, so regardless of service level they are going to do a lot of business. The lower-volume stores are typically minimally staffed anyway, so there’s a limit to the impact that labor has on them. Whereas the mid-volume stores perform well because they compete on service level. The labor shortage may be causing this company’s mid-level locations to suffer the most because the service levels there have dropped, and they are losing to competition. Now you know to focus your resources on these locations, where you can affect the biggest change.
- Look for symptoms: If logical groupings did not reveal the whole picture, try identifying relationships between symptoms of poor business and other identifiers.
- For example, if those high-volume locations are doing ok from a revenue standpoint, but now without an appropriate staffing level, the product is “disappearing” without payment… then we know, shrink is the problem that needs to be addressed.
- Overtime is a painful symptom as well. To analyze it, create tiers based solely on overtime usage and address it from there.
- If employees are getting burnt out and overburdened, turnover may be a problem, and the cost of turnover can be staggering.
These deeper breakdowns will allow you the ability to see what the biggest impact is on the bottom line. Prioritizing these symptoms will ensure your solutions have the biggest influence in fixing any issues.
Next Step: Quantifying the Impact to Your Bottom Line
Quantifying the impact that the labor shortage has on your bottom line will allow you to create a clearer plan. You can start quantifying your problem with simplistic relationships, just to get a basic understanding of what is going on. For example:
- If a company’s segment is off target by $100K a month and they are short-staffed by 5 people, creating a loose relationship of $20k per head, per month. With that number, it’s easy to find out which locations are the worst off and start there.
- Another example could be that shrink or waste is up by 5% and locations are down an average of 5 staff members. That leads us to assume that there is a 1% of shrink per open position. Yes, this is a simplistic way of seeing these relationships, but it’s meant to reveal that when you start creating these relationships across the organization, you start to see where the symptoms are most problematic and where you should address your efforts first.
UKG Dimensions – Advanced Scheduling Demo:
At Mosaic, we partner with clients to use tools like UKG Dimensions to discover these symptoms and create solutions to combat them. Click here to watch our demo on how to use UKG Dimensions to identify, quantify and start solving staffing and workforce problems.
Now that you’ve identified the profile and skill set of the employees you are looking for, it’s time to get specific in your recruiting efforts. Review your job descriptions and job postings so you can update them with the new information you have. This will make it easier for candidates with those desired attributes to find you, therefore optimizing your recruiting process by saving your hiring managers time and resources used to interview candidates who do not meet your requirements.
- Incentives: Incentives and reference bonuses are a great way to find new team members, but keep in mind that a lot has changed in the past 18 months. For example, if your team is now mostly remote, having an on-site gym or coffee bar may not be an incentive you want to highlight in a job description. That being said, as you review your job descriptions and openings, it’s a great opportunity to review your incentives and highlight those that would be relevant to the specific person you are targeting. Think about incentives that would genuinely make a difference in your employees’ day. For example, if your open position is for servers at a restaurant, offer them a free meal during their shift. The good news is that you don’t have to come up with these incentives on your own! You can ask your existing team; they have firsthand experience and will be able to offer relevant ideas. Use this time to also make sure that any current job perks they have are still relevant to the jobs they are doing now. UKG Pro – Employee Voice is a great tool for this type of survey and data collection. Read our blog here to learn more.
As the Labor Shortage is affecting multiple industries and sectors, we need the reminder that there are practical and tailored ways to combat it. With Mosaic, you can start managing and understanding its impact on your organization today! Click here to contact us today.