How much do full-time staff really cost?
Being in the business of managing staff costs, we often hear people say that casual staff just cost so much more than their full time equivalents. I mean, that extra 25% is a killer, right? Especially for staff who work a fairly consistent schedule each week, it’s almost like free money.
For a while there I went along with that, not really giving it much thought. But today the thought struck me – casuals miss out on plenty of benefits afforded to full and part timers, so are they really better off? I decided to investigate further. What follows may surprise you.
First – how many days in a year does a full time employee work?
- Weeks in a Year: 52
- Working Days in a Year: 260
So far so good. We’re going to ignore the 1 or 2 days that we’re off by, for the sake of a nice round number. Next, let’s look at this full time employee’s entitlements, in days.
- Annual Leave: 20 (4 weeks)
- Personal Leave: 10 (2 weeks)
- Public Holidays: 10
We’ll assume a 7.6 hour work day and 17.5% leave loading. So how many hours of leave are we paying?
- Annual Leave – Base: 152
- Annual Leave – Loading: 26.6
- Personal Leave: 76
- Public Holidays: 76
- Total Hours of Leave Paid: 330.6
Earlier we calculated how many days of work one can work in a year, now let’s subtract leave taken to get a more accurate figure.
- Days of Leave Taken: 40
- Actual Days Worked in a Year: 220
- Actual Hours Worked in a Year: 1672
Divide 330.6 (hours of leave paid) by 1672 (hours worked) and we get 19.77%. Remember, we are comparing this to the 25% loading paid for casual staff. So from this perspective, yes, your full time and part time staff are still cheaper – but only by 5.23%.
And even that number is probably on the low side. We ignored long service leave and maternity leave because they are a bit more unreliable. Both they are also costs (or accruals) that can definitely add up!
When you take into account the fact that you only have to pay casuals when you need them, it’s easy to see why more and more Australian employers are turning to casual staff. According to the ABS, this has been growing steadily since the 90’s, and today over 1 in 5 jobs in Australia are casual.
Product Updates |
New rostering features allows you to get visual with pay rates
This week at Tanda, we’ve launched some exciting new features to give businesses a complete visual breakdown on different pay rates that are applying on the roster. This is a game changer in allowing managers to easily build a fully costed, compliant and optimised work roster. Making it easier to understand the cost of a roster Tanda’s always given you the cost of a roster, broken down by each employee and each day. However, even that doesn’t always make it clear why costs blow out sometimes. This is why we built the roster costing chart. Visible on the costs view of their rosters, it shows a breakdown of each hour of the employee’s roster, showing if the time will be ordinary time or overtime and the cost that it’ll be paid at. With lots of staff on a roster, you’ll see a small preview for each person. We call it the candybar because of how datalicious it looks. You can even sort the list of staff based on this candybar – so you can order rosters based on who has the most complex costing which usually comes from having the most different kinds of overtime. Making it easier to give staff the hours they want We’re tackling these problems from both ends to give you more tools to make great rosters. You can now set the preferred hours that someone would like to work on their employee profile. If you roster someone with a lot more, or a lot less, hours than their preference, you’ll see a reminder on your roster. There’s 10% leeway on either side, which means you don’t need to roster everyone with exactly the number of hours they want – just in the general vicinity. This is a great way of giving staff hours they are happy with, while still maintaining the natural flexibility in hours required for casual employment. Did you know? If you roster a casual for the same hours every week, most Modern Awards include a clause where you need to offer them a permanent contract. Fair Work refers to this as “regular and systematic” rostering. Our goal at Tanda is to make it super simple to build a roster that is both compliant and optimised under your relevant Fair Work Award. If you’re interested in finding out some more information about implementing this in your business check out our rostering or award interpretation pages.
Awards & Rostering |
Why you need better rostering for the new financial year
It’s now less than a month away from the end of the financial year, which means you’re quite likely incredibly busy. Whether you’re looking to hit your financial year KPIs, making some big changes to your business, or just managing your staff more effectively, it can be a stressful time for business owners and managers. Therefore, it’s important to give your managers and staff the right tools so you can get the most from your workforce in the new year. Rostering is one such tool, and is often referred to as one of the biggest pain points in managing a workforce. Poor rostering leads to any number of problems and issues in the workplace including; Store managers spending hours each week rostering, when they could be focused on larger priorities. Rostering on too many or too few staff, results in unnecessary increased wage costs or a reduced ability to service customer demand. Last minute roster changes from bad communication leads to the wrong number of staff, and can ultimately affect overall morale. Managers can’t cost their upcoming staffing costs with the complexity of the Australian industrial relations system. Bad compliance without an effective system, means you’re trusting all your store managers to be rostering within employment law requirements. Any of these problems occurring could be causing you unnecessarily high labour costs, a reduction in effective customer service, and a decrease in the productivity of your managers. But it doesn’t have to be this way! Rostering should form the foundation of your workforce management. It is your point of reference for staff resourcing, managing labour costs, and insightful reporting. Implementing modern and powerful rostering software is the easiest way to get on top of your workforce frustrations. What a great rostering system brings to your business A great rostering system should: 1. Cost your rosters including overtime, allowances, and leave. It’s very hard to meet labour budgets if you don’t know how much your roster is going to cost you. Great rostering systems should be able to cost your roster as you build it, so that you can make the best decisions in the moment to meet your budgets. Award conditions such as penalty rates, allowances, and leave can add extra unforeseen costs to your weekly roster, so it’s important that your system is able to account for these in the total roster cost. Businesses that can accurately forecast their labour costs are better able to optimise their labour spend, which leads to smarter workforce decisions. 2. Be easy and intuitive to use. There’s no point going through the process of updating your system, only to find out it’s more difficult than doing it manually. Rostering shouldn’t be a hassle, especially when you’ve got better things to focus on. A great rostering system should be intuitive and easy to use for your entire team. Features like auto-saving, filters for teams and locations, alternative roster views, make what used to be a time-consuming task, quick and effortless. Once you’ve built the roster, being able to quickly send it out to staff via SMS and email, as well as any last minute changes, keeps all your staff updated on what’s happening. 3. Use Predictive Workforce™ software to tell you how many staff are required. Correctly predicting the number of staff for any given day can feel like a miracle sometimes. However, great rostering software systems should be able to use predictive analytics to show exactly how many staff you need, at what time, every day. Integrating Point of Sale data, revenue, and other forms of service demand data into your rostering system is crucial to optimising your labour productivity. Having the correct number of staff leads to higher staff productivity, greater profitability, and an improved customer service experience. End of Financial Year is a great time to review your systems, reflect on what’s working, and what can be improved for the New Financial Year. Updating your rostering system starts you off on the right foot, free from paperwork and stressful staff management. This leads to better time and attendance tracking, wage calculation, and faster payroll processing. That way you can focus on running your business, not your rosters.
Industry Insights |
Why Pharmacies Love Tanda
Tanda spoke to Jarred, Co-Owner of Marraboor Pharmacy about his experience using Tanda. Marraboor Pharmacy is a locally owned and operated pharmacy located in Swan Hill. They have been providing great quality service and health advice to the community for over 50 years. Known for their friendly and knowledgeable staff, Marraboor Pharmacy provides a range of health services. Immunisations and blood pressure recordings as well as a number of over the counter and prescription medications are available. “As a business owner and pharmacist, being part of the local community is really important. What I love about my job is being able to help people through the service we provide.” Jarred discovered Tanda when he went searching for better solution to manage and roster his staff across his busy store. Having previously used online systems and spreadsheets to roster, and paper time sheets to record staff attendance, Jarred was looking for a solution that could solve his rostering issues and make payroll processing easier. “Running a pharmacy, means that labour is my second biggest expense after stock. I therefore needed a simple and fast way to create rosters for my team, and forecast my labour costs. It needed to be easily visible, and able to connect to my Xero account so my wife could do payroll. “Tanda’s made a huge difference in how I roster. It was so easy to use with the drag and drop feature, and I could quickly see that I had my whole team covered with the colour-coded roster. “The integration has been so easy with Xero, and has made a real difference for my wife. She used to come in on a Monday to do payroll, and would spend hours chasing up staff who’d forgotten to fill in time sheets. Now she can come in, check the time clock selfies and time sheets, and do payroll in no time.” In addition to faster rostering, Jarred is also enjoying the Award interpretation and leave management features built into Tanda. “Being able to forecast my labour costs, plan my time and workforce through Tanda has really made a difference. I can see all my labour costs easily in Tanda, so I now know when someone is going into overtime on a Saturday, and how much that will cost me. “There’s already plenty of paperwork involved in running a pharmacy, so I’m a big advocate of paperless systems. Being able to track and approve staff leave requests electronically through Tanda, has made it much easier not only for rostering and payroll, but for tracking our leave accruals and leave costs in general.” Tanda is giving Jarred more time to spend focusing on his business and his patients. “As a Pharmacist, health professional and business owner, the less time I spent on admin, and more time spent focusing on running the business and providing excellent customer service to my customers, the better. Tanda is helping me to get out of the back office and away from the paperwork, to spend more of my time on pharmacist related work, which is what’s important. “Any pharmacists or business owner for that matter, should be using a cloud-based system like Tanda. It’s a great product and the customer service is excellent. I’d highly recommend giving it a go.” Marraboor Pharmacy is a locally owned pharmacy in Swan Hill, that has been providing exception customer service and health advice to the Swan Hill community for more than 50 years.