Available Time
Available time is the amount of FTE hours that we have available to the organisation. The starting point for available time is contracted FTE, the sum of their individual FTE within their contracts. If we take an example of 1,000 FTE who are contracted to work a 40-hour week, we calculate the contracted hours using the following:
In an annual planning horizon, 1,000 FTE contracted to work a 40-hour week would equate to 2,080,000 hours; however, an organisation cannot plan based on this figure. It is common for contracts of employment to guarantee a number of days of annual leave, including public holidays and any additional entitlement of holiday or personal days. This time must be deducted to come to an accurate level of availability. For the purpose of this example, we will assume a common UK figure of 33 days of annual leave (8 public holidays and 25 days of holiday entitlement), or 264 hours (33 days x 8 hours); this extrapolates to 264,000 hours across the workforce. In this example, available time is 1,816,000 hours (2,080,000 hours of contracted FTE minus 264,000 hours of annual leave).
Utilisation
Utilisation is the act of doing something, to be utilised. Process heavy environments tend to focus on utilisation and shrinkage as key metrics, where utilisation is time working on a core task and shrinkage is time not spent on a core task. Utilisation is, therefore, a positive metric, whereas shrinkage is something an organisation would want to avoid. It is key, that utilisation and shrinkage are calculated as components of available time, rather than contracted time. Many resource planning professionals will categorise all annual leave as shrinkage. This is usually based on the practical perspective that they will often deal in a short time horizon and will abstract pre-booked annual leave and statutory holidays as part of a single calculation. Whilst sensible in approach, this mis-categorisation can drive poor business behaviours. Annual leave is a reduction to available time, as opposed to shrinkage, which is a reduction from available time. Shrinkage is viewed as a negative reduction in management’s resources, and something to be reduced. By including annual leave within shrinkage, not only does annual leave come to be seen as a negative, but it also artificially inflates the shrinkage figures (often prompting an aim to reduce further).
Shrinkage, where a worker is not utilised, is typically regarded as a combination of two components, internal and external. External shrinkage are additional absences, for example sickness and lateness. Internal shrinkage can include system downtime, meetings, comfort breaks and additional projects. Though this definition can be helpful to understand where shrinkage can be reduced, there is a more important way to view shrinkage when it comes to the impact on the organisation: FTE shrinkage and headcount shrinkage.
- FTE shrinkage is those absences that impact as a percentage of planned working, such as sickness and temporary closure of premises. For example, the sickness of 0.5 FTE is half the loss of the sickness of 1.0 FTE.
- Headcount shrinkage are those absences and events that impact in absolute time, such as staff meetings and system downtime. For example, a 1hr meeting causes a higher rate of shrinkage to 0.5 FTE than to 1.0 FTE.
Productive Time
Productive time is a component of utilisation: we have to be utilised in order to be productive. However, the concept can be understood only within the concept of work: productive time is that time spent operating at the processing speed. The processing speed, the expected time to complete an activity, can be determined in a number of different ways. Activities may take longer than expected due to a number of different reasons: poor systems, which will be accounted in the assessment of processing speed; shrinkage, which is separately accounted, and underperformance, individually processing at a slower speed than expected.
Shrinkage, plus underperformance, is shown in the workforce performance model as idle time; idle time is where core outputs are not achieved. Environmental factors that are not captured within shrinkage can result in subsequent underperformance. There can be multiple environmental factors that may not be considered in the calculation of the expected processing time. For example, the impact of climate change in creating hotter summers and colder winters in the future is estimated to create a productivity impact of 0.4% in London, UK and 9.5% in Bilbao, Spain1. In addition, a review of more than 100 workplace studies found that open offices had a negative impact on attention spans and productivity for certain types of work2. Finally, a toxic workplace culture can have a significant impact on worker productivity3.
One study has shown that ostracism, incivility, harassment, and bullying have direct negative significant effects on job productivity, while job burnout was shown to be a statistically significant mediator between the dimensions of a toxic workplace environment and job productivity . Underperformance is also expected where there are changes to a worker’s physiology. The range of possible changes to physiology are manifold, but I will focus on a few key areas. In CIPD’s nineteenth annual survey into health and wellbeing in the workplace, they calculated the average level of employee absence at 5.9 days per employee per year4. This is the lowest level they had recorded, which may point to the result in a positive increase in the health and wellbeing of the workforce; however, it could also point towards a more concerning trend.
Presenteeism is the act of coming to work whilst sick, a growing trend with four-fifths of survey respondents having observed it in their organisation over the past 12 months and a quarter of these report it has increased over the period4. Illness affects both the quantity of work, through reduced speed and repetition of tasks, and the quality through an increased number, or greater severity, of mistakes. Not only are sick workers less productive than healthy workers, but there is an increased likelihood of contagion and spreading that sickness to healthy workers (both in the workplace and during the daily commute). Furthermore, increased presenteeism correlates with increases in both stress-related absence and mental health problems such as anxiety and depression . Reports on the cost to organisations of presenteeism in comparison to the cost of absenteeism vary between 1:1.5 and 1:2.65, with the American Productivity Audit estimating an annual cost to the US economy of $150 billion6.
