Chapter Eight Defining FTEs FT/PT and Turnover/Unit Erosion for Time and Labor Management

Position Control Purpose Assists management to determine:

Assists management to determine: o Shift an FTE will work to cover the department appropriately o Identifies unbudgeted labor requests o Departmental vacancy rates o Departmental turnover rates o Predict additional resources required when volume increases

Turnover View depends on position

CEO/CFO/HR view: HR cost to recruit is $10,000 - $20,000 over 3-5 months Dept. view: replacement during the time the position is vacant and the person is in orientation which includes: - Core dollars - OT and outsourced labor (e.g., Temp/ agency) replacement: - Cost of Orientation:

Position Control - Best in Class

Comparison of budgeted activity with actual performance Actual workload compared to budget Actual worked hours compared to authorized position Actual worked hours by shift compared to authorized shift On-line, real-time information for: o Overtime o Agency Automatically updated from HR with changes in job codes, dept. transfers, terminations and other changes (e.g. FT/PT status changes)

Position Control Optional:

Date of Hire (DOH) for Seniority tracking

Position Control Includes:

Defined Positions based on Calculated FT/PT dept./unit needs Filled/Open Positions Position FTE's compared to Hired & Actual FTE's

Position Control recommended:

Job Codes, Classes and Skill-mix Weekday and Weekend Shift Distribution

Calculating the Cost of Turnover - Look at the:

- Average wages for that position. - Average benefit cost. - HR expenses. - Replacement costs using overtime. - Outsourced (e.g., Temp/ Agency) hours for the average time it takes to replace that employee.

Turnover Strategies

1. HR, Finance, Executive team needs integrated solutions ASAP 2. Analyze the workforce to determine FT/ PT status based on the new rules of 30-plus hour's average per week plus overtime, labor costs and workload needs. 3. Establish thresholds for 30 hours, and work with software vendors (Scheduling/T&A) to set automatic alerts to assist managers in proactively monitoring and managing employee time. 4. Train the entire leadership team- All levels: a. Position Control Strategies to define & help manage FT/PT. b. Managers/Schedulers & Employees must remain compliant regardless of strategy.

Full-time(FT)/Part-time(PT) Ratios- Why does it Matter?

1. Resource for employee shift exchanges/ trades 2. Resource for workload fluctuation that avoids Overtime 3. Source to cover department-based budgeted deficit demands a. Budgeted vacation up to 10% b. Unexpected absence up to 5% c. LOA/FMLA absence up to 10% d. Vacancy absence up to 10% 4. Source to cover service-line budget deficit demands 5. Determines total positions for Position Control a. Best = 80 - 85% Full-time / 15 - 20% Part-time

Best Practices" for Turnover Reporting include which of the following?

All New hires/Retires, Transfers In/Out and Terminations in the dept./unit for a reporting period. Defining beginning & ending employee count.

Position Control includes which of the following? (Choose all that apply)

Defined Positions based on Calculated FT/PT, dept./unit and needs. Filled and Open Positions. Position FTEs compared to Hired and Actual FTEs

Positions in Position Control are based on employee preference only.

False

Tracking Erosion is helpful with the following?

Helps explain source of elevated orientation hours and dollars in the absence of new hires and re-hires. Often the first sign of conflicts between practices and policies compared to the other dept./units.

Strategies to Manage FT & PT Positions

Strategies to Manage FT & PT Positions 1. Based on Best Practice Criteria 2. Allowing changes in the number of FT/PT positions must be balanced against the dept./unit need first vs. employee requests. 3. Will require unit leadership working closely with Finance and HR before changes are made. 4. Saying "yes" without regard to the dept./unit needs may feel right to a manager but the long-term consequences will negatively impact everyone (i.e., employees & customers).

Position Control - Best - Best Position Control includes:

o Date of hire (DOH) for seniority tracking o Budgeted dollars by job code o Reference to FT/PT/Contingent o Position Control numbering schemas that allow for "loaning positions"

Position Control - Good - Good Position Control includes:

o Identifies positions for direct and indirect services o Job codes, classes or skill-mix o Weekday and weekend shift distribution o Numbered positions to budget

Minimum Position Control includes:

o Title or position o Budgeted FTE status o Filled and open positions o Position FTEs compared to hired and actual FTEs

Best Practices: Turnover Reporting - Organization-wide:

• Dept./Unit turnover (all skill mix) excluding dept./unit erosion with a goal of 5% or less • Dept./Unit turnover including dept./unit erosion for a goal of 12% or less. • Reducing turnover and unit erosion improves both staff and customer satisfaction and directly impacts outcomes. • Industry Specific: • Manufacturing & Distribution: 16% total turnover • Healthcare, RN turnover excluding dept./unit erosion with a goal of 8% or less.

Tracking Erosion

• Helps explain source of elevated orientation hours and dollars in the absence of new hires and re-hires. • Often the first sign of conflicts between practices and policies compared to the other depts./units.

Impact of Turnover

• Job loss from departing employees increases the amount of work to do by remaining employees. - OT Increases - Floating between units may increase - Use of outsourced labor may increase • Orientation and education/training costs increase. • Productivity within the shift and dept. decreases as new employees acquire skills and competencies. • Requires re-building of the "team(s)" at all levels of the organization. • High employee turnover demoralizes remaining employees. • High leadership turnover demoralizes employee confidence. - Customer satisfaction decreases - Employee satisfaction decreases - Errors and omissions/adverse outcomes occur and/or increase • Operational costs increase so profit margins fall.

Position Control - Minimum

Tool used by department director/manager

Position Control is a tool, which allows management to monitor all filled and vacant positions by dept./unit.

True

Productivity is a measure of how efficiently your labor force is used to produce your end product or tasks.

True

Reducing turnover and unit erosion improves both staff and customer satisfaction and directly impacts outcomes.

True

Timely and accurate information allows monitoring, maintaining and adjusting labor resources to achieve optimal efficiency.

True

Working everyother weekend (2 of 4) means that 50% of the employees will work and 50% will be off.

True

FTE Definition Based on 7-Day Work Week Why Do We Care?

When the workweek is extended to seven- (7) days, the additional hours of an FTE must be planned to cover those two- (2) additional days. RULES: 1. 7-day Operations: For every one (1) FTE, an additional 0.4 of an FTE is required to staff the time-off days. 2. Therefore, every FTE position needs one (1) FTE plus 0.4 FTE (or 1.4 FTE) to staff that position for a seven- (7) day schedule.

FTE Definition Based on 6-Day Work Week Why Do We Care?

When the workweek is extended to six- (6) days, the additional hours of an FTE must be planned to cover the one- (1) additional day. RULES: 1. 6-day Operations: For every one (1) FTE, an additional 0.2 of an FTE is required to staff the time-off days. 2. Therefore, every FTE position needs one (1) FTE plus 0.2 FTE (or 1.2 FTE) to staff that position for a six- (6) day schedule.

What Does Position Control Matter in T&A if it is handled in Payroll, HR, Finance?

• Managing Position Control is the responsibility of every dept./unit manager. It may be a shared responsibility with HR or Finance depending on the organization. • When employees change their hired work commitment the change should be made in the HR system. However, depending on the authorized interfaces the change may or may not change in the T&A and/or scheduling software system(s). • If there are no interfaces, there must be joint accountability with the dept./unit Manager, Timekeeper and Workforce Management Professional to ensure the change is made and the hours are scheduled, paid and reported correctly. • When leaders do not understand what Position Control is and what defines their FT/PT positions, they allow employees to change their work agreement commitments "at will" which impacts the available shifts for scheduling and daily staffing which may create manpower shortages when employees reduce to part time classification and refuse to work "extra shifts" and/or the remaining FT employees must work extra and overtime to meet manpower needs. • Knowledgeable Workforce Management Professionals who understand time impact of Position Control will be able to identify the source of manpower shortages or increasing OT when the total number of employees in the dept./unit is unchanged but the FTEs in the dept./unit have changed.

What is Labor Productivity?

• Measure of how efficiently your labor force is used to produce your end product or tasks. • Skill mix, staffing patterns and workload scheduling. • Timely and accurate information allows monitoring, maintaining and adjusting labor resources to achieve optimal efficiency.

Position Control Definition

• Position Control is a tool, which allows management to monitor all filled and open/vacant positions by department. • Log of all budgeted persons for a department and new or non-budgeted during year. • Based on the labor budget