A: You hear the term “shrinkage” and it doesn’t make you laugh.—Greg Levin
Human Factors are the payroll hours that you’re paying your employees to do something other than handling workload. It is made up of lost presence hours (closed holidays, schedule adherence, sick time, jury duty) and shrinkage (meetings, training, coaching). Some of it applies to only permanent employees (earned benefits) vs. temps, some is non-discretionary (tardies, no shows), some is mandatory (HR training), some is conditional (don’t give paid breaks to people on vacation), and all of it is paid (don’t count maternity leave if it’s coming out of a different insurance budget.) These Human Factors are the difference between the bellybutton-workload hours vs. the “I have a name and I want time off” fully loaded hours.
The calculation for this sometimes meets resistance: Bellybuttons ÷ (1 – HumanFactor%) = Fully Loaded Staff. For example, if the human factors are 24.6% (13% lost presence hours and 11.6% shrinkage) and your workload requires 100 people, the formula would be = 100 ÷ (1-24.6%), or 133 people.
Although this is the mathematically correct way to calculate the fully loaded required staff, when it comes to walking it through with the stakeholders, they may have tried the math in their head and arrived at a conclusion of 125 people needed. You can add one additional line in there to help demonstrate the impact, using an “add-on factor.”
What you would share is this:
And Human Factors are 24.6%, which create the add-on factor of 32.7%
So you need to employ 133 total people, which will now give the new-hires the human factor time, as well.