Labor scheduling software for clubs. (Technology).

For the club industry--which is facing a shrinking, more expensive labor force--labor scheduling software applications are starting to become more attractive. Traditionally a tedious, time consuming, and error-riddled manual process, the automated construction of shift schedules can free management to focus on other areas of concern. Basically, labor management software deals with containing payroll expenditures, reducing non-productive time, restricting overtime, and ensuring shift coverage.

Automated labor management systems provide assistance in forecasting, scheduling, reporting, analyzing, and controlling time worked and use of time worked. Effective labor scheduling can be accomplished through PC-based applications, web-based applications, and POS-integrated applications. Each of these approaches can streamline labor-related processes while enhancing workforce controls. Club managers are often surprised to discover the bottom line impact of improved labor scheduling on cost containment.

Cost Containment

While labor cost containment can be accomplished in a variety of ways, most software applications focus attention on lost time and overtime as major strategies for labor savings. Reducing or eliminating lost time, which results from unauthorized early time-in and/or late time-out entries, can represent meaningful savings.

Consider the scenario in which a server scheduled to begin work at 9 a.m. clocks in at 8:45 a.m. but doesn't report to the dining room supervisor to begin work until 9 a.m. The supervisor will consider the worker reliable and on time, unaware he clocked in 15 minutes earlier. The payroll office, unaware that the worker was not scheduled to report until 9 a.m. will inadvertently pay for an extra 15 minutes of non-productive time. This additional time wasn't forecasted by management and therefore results in overspending within the labor budget. Hence, it is referred to as lost time.

Similarly, late clock-outs can represent unexpected additional labor costs, as well as lead to unscheduled higher priced overtime. It is important to note that a fifteen-minute savings for 10 employees per day, for a 360-day year, at an hourly rate of $8, equals $7,200 annually.

Controlling Lost Time

In a labor management system, early sign-ins and late sign-outs are tightly controlled. Even though some labor scheduling systems allow employees to clock-in prior to their scheduled start time, the system will not authorize wages until individually-assigned scheduled times occur. In the scenario above, for example, the server may have clocked in 15 minutes early, but the system will not authorize a payroll transaction to begin until the scheduled time of 9 a.m. arrives. Although employees may be allowed to punch-in early, the system will not count time until the authorized schedule time has elapsed.

Similarly, staff can clock-out late but will not be paid beyond the limit of the scheduled shift termination time. For an employee to be paid outside the parameters of a stored labor schedule requires managerial/supervisory authorization. Hence, exceptions to predetermined scheduled times, arising from unforeseen circumstances, can be adjusted through the system's override procedure.

Overtime Monitoring

As many club managers will attest, controlling overtime can be especially critical to labor cost containment. While management often finds the unpredictability of business doesn't always allow for the elimination of overtime, labor management software does provide a means to restrict overtime to "pre-approved" overtime. In other words, with an automated process there are few, if any, unanticipated overtime expenditures. Most club managers who are familiar with labor scheduling software cite the monitoring of overtime as a key factor in the successful implementation of a labor scheduling system. The system allows staff to earn overtime only if it occurs in a controlled environment. In essence, management is notified as an employee's hours worked approach the overtime threshold. The system then only permits overtime to occur with managerial approval.

Shift Coverage

In a labor scheduling software application, shift coverage is accomplished through a series of forecasting, scheduling, and analysis functions. Labor forecasts are typically constructed based on historical data and intuitive guesswork. Some labor management systems offer managers the option of system-developed schedules or provide an accessible file for user determination. An analysis of forecast information and previous schedules can help reveal weak or limited coverage periods requiring reconsideration. It is for this reason that software packages provide users the capability to fine-tune or modify preliminary system generated schedules.

In larger firms, departmental managers may generate and refine departmental schedules and then submit them to the payroll office for official entry into the system. From there, schedule data can be downloaded to the system time clocks for monitoring and control. Finalized schedules are used to establish authorized payroll expenditures through sign-ins and sign-outs.

Authentication Media

Newer time clock systems allow club managers to select among several time recording media: traditional paper time cards, magnetic strip plastic cards, electronic keypad, and biometric recorders. Traditional time card systems rely upon punches to record time in/out data. Heavy paper time cards require a storage rack, effective printing capability, and an accurate time stamp. Clocks featuring automatic card alignment minimize over-punching and incorrect recording. Improved paper card clocks contain data handling techniques that can recognize magnetic stripe and bar code information that may be placed on the card.

Plastic magnetic encoded cards, which can also serve as employee identification badges, provide enhanced sign-in and sign-out functions but may not provide employees with a printed copy of time in attendance. Badge-based data collection requires the insertion of a recognizable input format (magnetic stripe or bar code) for processing. Magnetic stripe cards are capable of storing an employee's identification number and scheduled shift number.

One concern with magnetic stripe cards is, unlike a time card format, there may be no provision for providing verifiable documentation for employees. Such a device places the burden of proof on the employee to prove which work shifts he/she worked.

Card-less and badge-less systems require employees to enter their employee number through a keypad, similar to an ATM. These systems rely on keypad entry to initiate system functions. Since employees may desire a printed copy of time and attendance data to ensure proper payroll processing, some keypad-based systems provide output through an attached printer. A main advantage of keypad entry systems is the elimination of card storage racks and creation and maintenance of magnetic stripe cards.

A file server or desktop computer can be connected to the time clock to poll data collected by the clock. Data polling enables exportation of captured data to other application software and systems. For example, detailed labor analysis software packages are available from numerous payroll system vendors. Club managers that rely on off-premises payroll service bureaus may use communications equipment capable of directly relaying stored data to remote computing sites.

While not all labor management systems operate identically, the following six functions are representative of system capabilities:

1. labor requirement forecasting;

2. employee scheduling;

3. time and attendance recordation;

4. overtime/lost time monitoring;

5. labor cost analysis;

6. payroll processing.

Labor requirement forecasts are developed from performance parameters such as sales or budgetary information. Employee scheduling is designed to ensure shift coverage based on employee availability, skill inventory, and labor requirement forecasts. It is for this reason that a majority of labor management systems are considered schedule-driven systems.

Time and attendance data can be recorded upon initiation by time card, plastic badge, or keypad entry. Systems aim to classify captured time as regular time, overtime, or special time. With each of these time categories associated with different pay rates and scheduling considerations. This enables the system to separate individual events for labor costing by job. For example, a club machine service call would be tracked through the identification of each employee assigned to the repair and the distribution of costs based on time worked. This allows labor cost reporting by event, department, and employee. This is an inherent strength of a labor management system.

Daily labor reports, labor distribution reports, budget to actual reports, projected overtime reports, and the like, combine to provide a base of financial information for managerial consideration. Although labor management systems typically do not generate payroll registers and paychecks, they do perform important pre-calculations that simplify eventual completion of the payroll cycle. Labor management systems that interface with external systems can provide additional time-savings while providing a mechanism for enhanced and extended labor analysis.

In addition to these features, a labor management package may also possess sales monitoring and job performance evaluations, often essential to effective human resources management. Systems with such capabilities are able to generate sales performance reports, detailed work distribution reports, and related reports.

System Reports

There are a variety of reports available through a labor management system. Representative reports include:

Work Schedules--generation of work schedules by department, employee, date, shift, hour, function, and other criteria. Schedules built upon worker profile, shift coverage needs, and worker availability data.

Overtime Report--list containing the names of employees approaching or incurring overtime pay.

Tardy/Absent Report--attendance abuse and lateness are tracked and reported.

Projected Hours Report--a projection of scheduled hours and expenditures that is comparable to actual data after the fact.

Availability Report--summary of work shift availability and skill index data for construction of shift coverage plans.

Labor Distribution Report--breakdown of labor hours by employee, trait, department, function, or other criteria. Reports typically summarize regular, overtime, and special exception time totals, and assist in labor allocation decisions.

PC-based Applications

PC-based labor management applications tend to require two hardware components: time capture device (i.e. time clock) and desktop computer. An automated time capture device may be intelligent and/or programmable. Most clock devices store critical data internally and operate independent (off-line) of the file server. The main purpose of a time clock is to capture punches (sign-ins and sign-outs) data for eventual transmission to a remote payroll accounting program. Time clocks typically contain microprocessors with plug compatibility for connecting monitors, keyboards, printers, and communication equipment. In essence, some time clock devices have evolved into stand-alone computing units.

POS-Integrated Applications

Automated work schedules often require modification as sales volumes and availability of workers change. In a seasonal business, for example, perhaps only one-third of the peak workforce may be retained. Developing a labor scheduling process designed for a small workforce becomes problematic when expansion to peak time staffing is needed. The dynamic nature of seasonal business fluctuations can lead to less than ideal system utilization, as the data required during peak business volumes can bring the system to a halt. As workers' schedules change and business needs vary, a labor management system may struggle to keep pace. It is for these reasons that some integrated applications have begun to appear in the marketplace.

Consider sophisticated labor scheduling software packages that rely upon sales volume data to populate Workforce forecasting and scheduling modules. The sales data is used to determine the jobs, tasks, and workload necessary to efficiently operate the club. By matching worker profile, skill sets, and availability data to an internally-generated labor forecast, these systems complete the difficult task of constructing shift coverage (by worker and club department) within budgetary constraints.

Web-Based Applications

There are an increasing number of software products being marketed as web-based (or web-hosted) workforce management solutions. Most application packages offer enhanced forecasting capabilities, scheduling functionality, and more flexible interfaces for extensive report generation. A web-based application tends to be structured as a closed-loop system for managing a single site labor force (including forecasting, scheduling, time and attendance, and real-time reporting). In addition, a graphical snapshot capability with actionable alerts and consolidated reports can be configured as essential system components.

Payroll Processing

Since payroll practices vary widely, a labor management system may need to be interfaced to a payroll accounting module to produce a finalized payroll ledger and/or payroll checks. Labor scheduling software is primarily limited to time and attendance accounting and the computation of gross pay. Payroll processing and paycheck generation can be accomplished via an add-on program or through exporting to a specialty application package. The two primary objectives of automated labor management systems are cost containment and improved shift coverage.

Today's labor management systems take an age-old, time-consuming manual task and not only streamline it but also provide management with a whole toolbox of analytical possibilities. In addition, some vendors claim that effective implementation of a labor management system can lead to the club experiencing a reduction of 8-10 percent in labor expenditures. Much of the savings are derived from more flexible shift coverage, reduced lost time, controlled overtime, and the ability to assign varying pay rates per job code.

Michael L. Kasavana, Ph.D., CHTP NAMA Professor in Club Business The School of Club Business Michigan State University