Why Do I Need This: How a Good Labor Model Can Drive Your Success

by | Mar 5, 2024

Labor modelling is a huge part of what we do at Axsium. We love helping our clients to better understand their businesses and become more efficient. But sometimes the benefits of a good labor model can be hard to see.

I recently heard about a client who was upset their new labor model increased the hours in some of their stores. This is a common complaint, and it’s rooted in a misunderstanding. Labor models help you to allocate labor hours more effectively. The hours of overstaffed stores should go down, but it’s unlikely that will happen across all your stores.

Where I experience some resistance to implementing a labor model in an organization, it’s often related to a few concerns:

  • “Why do I need one”
  • “I don’t have the people to support and maintain a labor model”
  • “Will my labor model be too complicated”

Let’s talk about each of these concerns.

What Your Labor Model Does For You

Let’s go back to the example I used of a client who was surprised to find that their new labor model increased labor hours in some of their stores. The assumption partly comes a lack of understanding, so let’s talk about the basics.

What is a labor model for? It is not to reduce labor hours—though that can be a result. When set up properly, it helps you align your Labor and Operations teams. So, what does that mean?

A labor model documents the tasks Operations expects to be done and the labor the front-line teams require to complete them. This ensures these two teams most involved in scheduling are on the same page. It helps them work together and makes that work more efficient.

All this means that you significantly reduce your risk of over- or understaffing. In fact, while your labor hours in some stores may go up, they will likely go down in others. So, while your labor model may make a negligible difference to your overall labor hours, it will make your business more efficient and effective.

A detailed labor model will help you understand what’s really going on in your stores. For instance, say a fast-food chain has one location with a fryer that takes half an hour longer to clean at the end of the day. Your labor model should be able to take that into account and ensure that location always has the right number of people working the right amount of time.

Maintaining a Detailed Labor Model

One concern I hear again and again is the effort involved in maintaining a labor model. In fact, there’s a persistent idea out there that a detailed labor model will require far more maintenance time to keep accurate.

But maintaining your labor model is much like any household chore. You do the work that needs doing as it comes up rather than letting it build up into a monstrous task. And that makes the updates you need to do to maintain it a lot less time-consuming.

It’s even easier to take this continuous maintenance approach if you use Opus. Axsium’s integrated work measurement platform, Opus allows you to use effective dating. This means you can input changes to your labor model before they take effect.

Remember that pesky fryer I mentioned earlier? If we replace it for one that is quicker to clean, we can update our labor model long before the fryer is delivered. The update won’t take effect until the fryer is installed. And that means we don’t have to worry about its impact.

A labor model helps you understand exactly what happens in your stores

Why Detailed Information is Good (and When to Collect It)

It’s not wrong to fear overcomplication. Making things too complicated has been an issue for too many companies. But that’s a general principal—the reality for labor models is slightly different. In fact, I don’t like to think of labor models as more or less complicated at all.

I prefer to think of labor models as more or less detailed.

Less detailed labor models are the equivalent of one-size-fits-all clothing. It will kind of be what you need, but it won’t really fit you. As you increase the detail of your labor model, you increase your understanding of your individual locations. And then your approach to budgeting labor starts to fit the reality of your organization.

Your business is full of location-specific details. Accounting for those is what makes your labor planning more efficient. And cutting out over- and understaffing isn’t the only benefit that you get from having a more detailed labor model. You’ll also get more buy-in from your locations as they realize you’re accounting for their specific needs.

A detailed labor model allows you to become more strategic in your decision-making. Planara, Axsium’s labor planning and analytics platform, can supplement your labor plan with location-specific what-if scenarios. Let’s return to our fryer. If you want to see the impact replacing it will have on the location’s labor needs, you can do so easily before investing.

Taking the Dive

A detailed labor model can make the difference between a moderately successful business and a thriving one. But the important first step is to get out of the mindset of only reducing labor hours. That may be a benefit of your labor model, but it isn’t the reason to have it.

Instead, it will allow you to be more efficient and strategic in where you allocate those labor hours. Your locations are a vital element to your organization’s success, so give them the labor they need.

If that sounds interesting, it’s probably time for you to get started on building a labor model. Thankfully, Axsium’s experts have a long history of developing labor models that drive our clients’ success. Get in touch to find out more.

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