Managing 24/7

Identifying the Excess Costs in the Average Shiftwork Operation:

How to Save $10,000 per a Shiftworker per year


There are inherent necessities and considerable business advantages to running your operation 24-hours. However, there are also significant downsides and hidden costs that often go unnoticed.

Do you know how much your bottom line is impacted by the lost productivity and cost inefficiencies related to running a 24-hour operation?

Relying on its proprietary data, independent research, and a review of third party research studies, CIRCADIAN® estimates that the incremental cost to employers from productivity loss, absenteeism, turnover, work-place accidents, and increased insurance and medical costs is over  $10,000 USD per year per a shiftworker over and above the cost of a comparable dayworker (1, 2).  


The excess annual cost to extended hours operations is broken down below by five key cost components:

Excess Costs of the 24-7 Employee

Additional Costs?
Even as staggering as this estimate may seem, it does not represent all of the excess costs of shiftwork. For example, this figure excludes the costs of frequent legal judgments and settlements resulting from accidents and injuries and the costs of defending them. In addition, it does not include the costs associated with negative events that have resulted in brand value depreciation.

A Closer Look at the 5 Key Cost Components:

How much they’re costing you and what you do to mitigate them



#1 - LOST PRODUCTIVITY ($3,900 in excess cost per employee)


The Problem:
  • Human performance and relative productivity decreases by 5%-15% at night.
  • Excessive overtime decreases efficiency

The Solution:
  • Shift Schedule Optimization – Many 24-hour operations are laboring with antiquated or poorly designed schedules. Review schedules and, if needed, develop and implement a new schedule that better meets your business needs, worker preferences, and health and safety requirements.
  • Training – Train shiftworkers to better cope with the challenges of working at night and rotating shifts. From sleep and alertness tips, nutrition and exercise information, tailored training programs for shiftworkers pay dividends in improving morale and productivity. And don’t forget to provide support publications to reinforce training on a continuing basis.
  • Fatigue Risk Assessment – Identify the employees, tasks, and work schedules that contribute most to worker fatigue risk, and then determine the best strategies for minimizing the risk.    

#2 – ABSENTEEISM ($2,400 in excess cost per employee)


The Problem:
  • Shiftworkers are more than twice as likely to be absent from work than daytime only employees
  • Only 1/3 of absenteeism is due to sickness
  • Managing a shiftwork lifestyle can be challenging and lead to health issues as well as family and social stresses

The Solution:
  • Staffing Analysis – Make sure you have the right number of workers for every shift. Without proper staffing levels, overtime levels can run amok, leading to burnout and absenteeism.
  • Training – Train shiftworkers to better cope with working in an extended- hours environment. Provide support publications to reinforce training on a continuing basis.
  • Fatigue Risk Management – Help ensure that you have alert, well-rested employees. According to Shiftwork Practices 2007, absenteeism was highest in facilities that report severe fatigue problems.  
  • Shiftworker Health & Adaptation Assessment - Benchmark your employees’ health and adaptation to shiftwork against our database of over 40,000 shiftworkers. Using a confidential online employee survey, the Shiftworker Health and Adaptation Assessment will enable you to quickly and economically assess and benchmark key health and adaptation measures for your shiftworkers

#3 - TURNOVER ($1,900 in excess cost per employee)


The Problem:
  • Turnover rates are three times higher at shiftwork operation than day-only operations.
  • According to Shiftwork Practices 2007, it costs more than $24,000 to recruit and train the average shiftwork employee.

The Solution:
  • Calculate the full cost of turnover (recruiting, training, loss of expertise, etc.) to determine the financial impact of a significant reduction in turnover rate.
  • Identify why people leave (burnout, trouble adjusting to schedule, work-life balance, retirement, etc.)
  • Implement programs specifically designed to foster a healthier, more supportive work-life balance for your shiftworkers.

#4 - HEALTH CARE ($1,400 in excess cost per employee)


The Problem:
  • Shiftworkers account for 10% of the insured population, but 17% of health care costs.
  • Shiftworkers are at a greater risk for sleep apnea, heart disease, mental health disorders, and obesity.

The Solution:
  • Shiftworker Health & Adaptation Assessment - Benchmark your employees’ health and adaptation to shiftwork against our database of over 40,000 shiftworkers. Using a confidential online employee survey, the Shiftworker Health and Adaptation Assessment will enable you to quickly and economically assess and benchmark key health and adaptation measures for your shiftworkers
  • Establish the prevalence and costs of health disorders for your shiftwork population.
  • Implement more productive staffing and intervention strategies to better manage overtime distribution.
  • Tailor disease management programs, such as sleep apnea screening, to the special health risks of your shiftworkers.

#5 – ACCIDENTS & WORKERS COMPENSATION ($400 in excess cost per employee)


The Problem:
  • Shiftworkers account for 20% more insurance claims and costs than their daytime counterparts.
  • Most companies aren’t aware how many of their accidents and incidents are a result of employee fatigue

The Solution:
  • Identify the Cost of Fatigue with FACTS – FACTS is an expert web-based system that calculates the probability of whether a person was impaired by fatigue at the time of an accident. With FACTS you know the true cost of fatigue in your operation and benchmark the impact of fatigue-management initiatives.

- Sign up for a free trial of FACTS by clicking here

  • Install an effective Fatigue Risk Management System (FRMS) – A comprehensive FRMS should address staff-workload balance, scheduling, employee training, work environment review, and have ongoing quantitative feedback about risk and risk mitigation.
  • Schedule Risk Analyzer – A web-based software tool that allows managers to not only check if a schedule is compliant with regulations (e.g. RP-755), but also to determine how safe it is utilizing Circadian's scientifically-validated CAS-5 fatigue modeling platform.

- Sign up for a free 30-day trial by clicking here


What was once an unrecognized cost is now an opportunity…


Once a company identifies and benchmarks the excess costs associated with shiftwork, a great opportunity for savings presents itself. Countermeasures can be put in place and you can drive down these excessive costs while improving the safety, health and productivity of your workforce.

If you have any questions on how to drive down the excess costs of shiftwork at your operation, we’d be happy to help. You can contact us by:

Email - info@circadian.com
Phone - 1-800-284-5001 or 781-439-6300
Web  - Click here for contact form

Sources:

1)    Kerin A, Carbone J. “Financial Opportunities in Extended Hours Operations: Managing Costs, Risks, and Liabilities” Circadian Technologies, Inc. 2003.
2)    Sirois, WG. “Biocompatible Shift Scheduling: The critical factors that influence the overall mental and physical fatigue risks of a core shift schedule” Circadian Information, LP. 2012.
3)    Aguirre A, Moore-Ede A. “Shiftwork Practices 2007” Circadian Information. 2008.

Home  |  Privacy Policy  |  Terms of Use  |  Sitemap  |  Contact Us

Subscribe to our newsletter!


goButton

 

Contact Information
Email: info@circadian.com
Phone: 1.800.284.5001
Local: 1.781.439.6300

Circadian

Circadian Headquarters
2 Main Street, Suite 310
Stoneham, MA, 02180, USA