Joe examines how employee schedules affect workplace morale and productivity.
By Joe Fiscus
If you’re in the service industry, you’ve undoubtedly come across this struggle: How do I keep happy employees, happy customers, and low labor costs? Achieving this delicate balance is what makes a business in this industry successful. One key factor that leads to this success is proper employee scheduling. When you schedule, you should keep your employees in mind. Happy employees will bring happy customers, which will yield more profit to you through return business.
A prime example of poor scheduling happened to my friend, Hank. Hank is the owner of a coffee shop with three employees. In the past, Hank had been earning $10,000 weekly before he deducted his labor cost from his gross income. At the time, his labor cost was 15%, which left him with $8,500 to pay the company’s bills and keep inventory. Now, 15% labor cost is decent, but Hank wasn’t satisfied. So, he decided to schedule only two employees instead of three each day, which gave him a 10% labor cost. Hank expected to be making $9,000 every week, but he is only making $8,000. What happened?
On the surface, Hank’s approach makes sense. He wanted to earn more every week, so he cut back on his initial cost (labor) to save money. Although cutting back on labor will save some cost, Hank lost money because he forgot that customer happiness is directly affected by employee happiness, all of which is directly affected by the level of coverage you schedule. During the busy periods, the smaller staff could not provide their full attention to every customer, which made some customers unhappy and they didn’t return. Furthermore, it’s highly likely that the employees who are unhappy because they have more stressful schedules (or aren’t getting the hours they need) may not provide the level of customer support you need to ensure return business.
Because the employees were not happy with their schedules, they provided sub-par customer service and some customers didn’t come back. There are many approaches that Hank could have taken for a more successful outcome. For instance, he could continue scheduling all three of his employees during the busy periods, and have someone go home when it gets slow. This approach works if one of the employees is willing to have their hours reduced to part-time. Keep in mind, if Hank cuts everyone’s hours, he is likely to make everyone mad. So, if nobody is happy with a reduced schedule, Hank may have to let one of the employees go and hire a new part-time employee. It would be better to let one person go than to have unhappy employees and customers.
Another option would be for Hank to operate as a “Floater”. During the busy times, Hank could help the other Two employees do their jobs so that his labor cost remains lower, but he is still able to ensure customer satisfaction. This approach is good to reduce labor cost, but it does give Hank more work. Also, it keeps Hank from being able to interact with his customers, which is what every owner/manager needs to be doing.
Whichever method Hank decides to take, he will have to weigh the pros and cons to find the best match for everyone. This decision is key because finding the balance between happy employees, happy customers, and low labor costs is what will make his business successful. Are you keeping your employee’s schedules in mind when you think about customer service? How do you make schedules that create both happy employees and happy customers?