ost businesses have lulls and peaks throughout their financial year. We have all been in the situation where some weeks we have too many staff for the workload in hand and other weeks where we could do with army of people to help out. One of the possible solutions is a system we introduced more than 6 years ago called ‘Annualised Hours’.

Since that time our electronics business in Bedford, UK employing about 80 staff has enjoyed many positive benefits.

The way it works is simple. Each person works a set number of hours on an annual basis. In most businesses this translates to a set number of hours per week or month. Where the annualised hours system differs is that it looks at the annualised figure as being the most important one and how that is achieved on a weekly or monthly basis is mutually agreed between employer and employee with the confines of legislation.

In our case rather than work at set week of say 37 hours the annualised hour systems balances the weekly or monthly hours to reflect actual work load. For example, in some weeks our staff will work 32 hours but be paid for 37 hours and in others they will work in excess of 40 hours but still receive the basic 37 hours rate.

In return for this increased flexibility the staff involved get an annualised hours payment which and also a share of the companies profits. The process being – work smarter – more profits – more profit share.

This ‘leveling’ effect has been a major contributor to our outstanding quality and delivery record. The system works because trained staff who would normally carry out certain activities are on the whole available to cope with any surges in work load rather than using people who are simply willing to work the overtime. In addition, because we are able to put in more hours as and when the business requires, delivery performance does not suffer but remains at its normal level.

Other more subtle benefits include staff being able to enjoy more time off during the summer

months (traditionally a quieter time of the year for our business),absence levels have dropped to one third of previous figures and financially it is easy to both project cash flow movements due to more predictable outgoings and it significantly simplifies the payroll activities.

Paul Wilson is a lean manufacturing/lean office trainer. Schooled in lean since 1991 he is now regularly involved in implementing permanent change within businesses to further increase their competitivness.

For futher information contact:

Paul Wilson
Axis Electronics Ltd
www.axis-electronics.com

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