Extended hours (shiftwork) operations offer major advantages to retail, healthcare,
manufacturing and service businesses and their customers. However, the unintended
and largely unrecognized costs associated with irregular schedules, night shifts
and extended hours are eroding the profits of American businesses by $206 billion
annually, or approximately $8,600 per extended-hours employee, according to
a new study by Circadian Technologies, Inc, a firm that offers consulting services
for extended hours operations.
The study predicts that the financial and social costs of such work are likely
to escalate as extended hours operations become even more prevalent. Today,
nearly one in five employees, or approximately 24 million Americans, half of
whom are in professional or white-collar occupations, regularly work irregular
schedules, night shifts or extended hours positions.
Extended hours operations enable companies to attain lower unit costs, shorter
supply chains, and better asset utilization and customer service. But extended
hours operations also incur higher costs than traditional daytime operations.
Primary factors eroding potential profits for businesses with extended hours
operations in order of magnitude are: lower productivity ($79.4 billion), higher
absenteeism ($50.4 billion), greater employee turnover ($39.1 billion), increased
health care costs ($28.2 billion) and more job-related accidents ($8.5 billion),
the study reports.
"Difficult economic times have resulted in understaffed and inefficiently
staffed conditions in many extended hours facilities. This, in turn, leads to
excess and imbalanced overtime, high absenteeism and turnover rates, increased
costs of recruitment, and excessive employee health and accident costs,"
says Circadian's Alex Kerin, a co-author of the report. "Workplace productivity
and employee morale also suffer as a result of unmanaged challenges confronting
extended hours operations."
The report also recommends ways senior management can manage the costs and risks
of extended hours operations. Here are three of the recommendations:
1. Analyze rates for overtime, absenteeism, turnover/recruiting, accidents,
health problems, and property/casualty insurance costs in total and by facility;
benchmark against internal and external measures and identify high-risk extended
2. Reallocate human resources, training, health and safety budgets to provide
additional resources for extended hours operations.
3. Adjust employee work schedules and staffing distribution to minimize excess
overtime, absenteeism, turnover and replacement costs.