Resource Flexibility: The Holy Grail of Operational Success Part 1
The Need for Flexibility
We don’t get it. We work with organisations that have highly variable demand with weekly, hourly, seasonal and time of month variations. We specialise in designing and implementing optimal operating models for contact centres, back office and retail networks. Yet in 90% of the operations we work with, the workforce is relatively “fixed” in response to this variable demand.
Most operations have some combination of time of day, day or week or seasonal variations in demand. We’ve never seen an operation where demand was constant by hour, day or week and through the year. We’ve seen contact centres with 50% more calls on Monday to any other day of week and operations where workloads double or quadruple around tax year end. The worst case of all was a flower retailer which experienced fourteen times the demands of a normal week in the three days before Valentine’s Day.
Typical weekly call arrival with Monday peaks and public holiday effect in early November
These cycles are just part of the need for flexibility in the workforce because they represent the workloads that are predictable. The ower retailer knew that volumes would spike before Valentine’s Day and could plan for that. However, organisations also need flexibility to deal with the unexpected. These days a Banking call centre can get flooded with calls if the Internet banking site goes down. A story breaking on the news or spreading virally in social media can drive demand up or down for a particular product or service and bombard a processing team or create queues in a branch. Anyone who has ever been in an airport when the ticketing system fails or queued for security near a public holiday, would appreciate the need for resource flexibility.
In a perfect world organisations would be able to roster full time to these regular peaks. However, this comes at a cost that few companies can afford because staff would be idle at other times. We have identified three answers to this problem:
1. Creating flexibility in the workforce or a Flexible Resource Pool (FRP);
2. Creating hybrid teams that enable staff to handle work across different channels that have different demand patterns and response needs; and
3. Moving some of the work so that we flatten out the peaks of work.
This paper (Part 1) focuses on the first answer. Subsequent papers will cover the other solutions. In particular, this paper explains our Flexible Resource Pool (FRP) concept, which achieves the holy grail of enabling flexibility to meet variable work demands and therefore also:
• improves consistency of service levels at minimal cost;
• improves the quality of customer interactions; and • has a positive impact on staff morale.
Many organisations have staffing models that don’t match customer demands. Few contact centres have enough part time staff to match the regular weekly or daily variations in demand and even if they do they can’t get staff to work the days of week to meet that demand. Branch outlets are similar. CBD outlets with two hour lunch time peaks can rarely hire staff who want to work a two hour shift. Of course using part time staff is part of the answer, but in our concept of a Flexible Resource Pool (FRP) we take this idea further.
The FRP is a flexible, fully trained group of employees working predominantly part time and weekend shifts or providing a flexible pool for other events. The FRP enables a contact centre or other operation to optimise its resourcing budget, creates consistency and protects against external shocks. The pool creates three prominent advantages or features that enhance network operation:
The FRP creates simplicity. In a typical call centre for example, shifts for the majority of calls will contract to the 8.30am - 6pm block, Mondays to Fridays. Staff will be much happier in these shifts, and the potential catchment of recruits to the stabilised week days will be greater. Managers will be available during core hours with their staff, increasing coaching opportunities.
The FRP creates flexibility because part time employees fill in when issues such as sick leave, training or network implementation begin to affect grade of service. (Note: this is where the network is protected from external shocks; the FRP fills in where required). Known events can be planned for to avoid negative customer impact.
Thirdly, the different profiles of employees in the FRP, creates ability - a pool from which to draw permanent replacements to natural attrition in core shifts. This reduces the ‘recruitment drag’ in the core hour shifts, also enabling a poor service cycle to be avoided.
Benefits of the FRP to Staff, Customers and Shareholders
Benefits for Staff
This sort of support can create more stable and desirable shifts for all staff which will create a more motivated, happy workforce. The FRP does this by:
contracting core shifts to more regular hours;
providing stable shifts that give staff more access to their management reducing “stretch” hours; and
providing flexibility to allow training and career development.
Benefits for Customers
The biggest benefit for customers is consistent and improved service levels across known problems such as busy Monday mornings, branch lunch peaks, event days, system implementations or seasonal fluctuations. FRP staff can help out in times of planned absences, and implementations. The improvement in working environment and having more desirable shifts also reduces sick leave and attrition. This has the added benefit of growing a pool of more experienced staff over time, creating a better platform for customer contact.
Benefits for Shareholder
In most operations the availability of an FRP benefits shareholders because:
operations can cope with day of week variation but hold staffing levels to a lower cost base;
attrition and sick leave can be reduced by running more staff in regular core hour shifts; and
recruitment costs fall as operations become more stable.
Many organisations have not tried to create a part time pool because it is hard to manage and hard to deliver a constant supply of resources. Often this is because those efforts have tried to focus on a single ‘type’ of staff profile. Research shows that more diversity in these types of team creates stability and longevity. Focusing on one type of demographic (e.g. students) limits flexibility of those individuals and reduces the demographic pool in any catchment area. In our experience, if organisations are looking for “late shifts”, weekend days and day by day shifts, three different personnel profiles work best.
Student Part Time
Students from universities are a good fit for staff who want to work primarily part time shifts. Call centre and operations work is seen as a far more suitable job to support study than hospitality, retail or manual labour industries. Most students are computer literate. A recent study at University of Western Sydney (UWS) recruitment service on the internet shows that 70% of enquiries were directed at part time employment.
Although students are less available around exam times, one clear benefit is that they would be available during school and summer holidays, which are traditionally times of low resource availability in operations. A secondary benefit is that students in part time roles will appreciate employers who form a career partnership and look to that company as they finish studies.
Steady Part Timers
There are always groups in the community who prefer to work in part time or non-core shifts. Typical people in this category are parents who need a second income to cope with family needs or couples needing extra income. Older demographics may well form a part of this profile. Some prefer the flexibility of working evenings to concentrate on other interests (one call centre in Sydney employs mostly actors supporting their career choice). Research shows that this profile of steady-state part time workers is large enough in most locations. The attraction of the FRP to many is that a number of possible employees are being disenfranchised from traditional contact centre work by the need to work full time flexible shifts when they do not want to.
Full Time Reserves
A third way to recruit into an FRP is to recruit candidates who wish to work full time but are happy to work shifts in the non-core hours, prior to there being a space available in the core hour shifts. In this way, the recruits could learn on the job, become proficient in non-core shifts, and when proven to pass minimum performance benchmarks, be available as a pool recruit for full time work. Changes in circumstances of part timers and students also make them a large pool from which to recruit. Every one of the full time reserves who are recruited directly to the full time shift reduces the recruitment lag effect (the time it takes to respond to demand changes) to zero. An FRP can always have a number of these recruits on standby, and these would be ideal to fill in full time shifts in the case of implementation training, sickness or annual leave.
The XFactor: FRP Management
One key requirement for an FRP to operate successfully is that it has a dedicated accountability and responsibility structure controlling the part time shifts. The reason is twofold. Firstly, it allows the core hour operational managers to focus solely on their own performance. Avoiding ‘management dilution’ or ‘management stretch’ will create better performance during core hours. Secondly, it allows performance measurement and management to be specific to the FRP, and that the success and viability of the FRP is clearly defined and readily quantified.
Part 1 Conclusion
The concept of a Flexible Resource Pool has a lot to offer many operations. They aren’t easy to establish and need careful design, planning and management but once in place they offer many benefits. We are still surprised that we see so many operations with variable demand but fixed resources. In our companion to this paper we will look at shifting the demand and hybrid teams that span different types of work.