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Discussion with David Caruso: Reducing Costs and Boosting Productivity in a Challenging Economy

I recently had the opportunity to talk about the importance of labor cost management in manufacturing with David Caruso, the founder and Principal of David Caruso & Associates, Inc.  David’s consulting firm specializes in manufacturing, supply chain, and technology strategy.  We talked about how manufacturing organizations are increasingly focusing on labor cost management in the current challenging economy.

In our conversation, David provides a number of examples of how manufacturers have used labor analytics tools to analyze and improve both worker productivity and product quality.  In one firm he assisted, they found that quality eroded over the course of the day due to worker fatigue.  They inserted more breaks into their process and achieved significant improvements in productivity and quality.   Click here to listen to a podcast of our conversation and hear more tips from David Caruso.

You can find additional information on this topic in this new Kronos whitepaper as well as in this article from IndustryWeek by my colleague Gregg Gordon on effective ways to manage a global workforce.


Pandemics and Presenteeism

In light of this week’s worldwide frenzied reaction to the appearance of the H1N1 flu virus in Mexico and its apparent rapid spread elsewhere in the world, it’s important to remember that according to the Centers for Disease control about 36,000 Americans die each year from complications of “normal” seasonal influenza viruses.  That’s about 0.01% of the US population.  Whether the H1N1 virus turns out to drive higher than average mortality in affected people remains to be seen, but flu outbreaks are clearly a major health concern that employers need to take seriously in order to protect their employees health as well as their organizational well being.

This April 2009 study published by the Journal of Occupational Safety and Health indicates that absenteeism and presenteeism combined cost employers $2.30 for every $1.00 they spend on medical and pharmaceutical claims.  As recently as last week, we published the results of a recent Workforce Institute survey in which 30% respondents indicated they are more likely to go work when they would normally stay home due to their concern about financial security.  This economic stressor, combined with the looming flu pandemic,  makes it more important than ever for managers to curb worker presenteeism.

We agree with advice being offered by government authorities and suggest that employers encourage employees to stay home when they are sick and provide flexibility and the necessary infrastructure to enable employees to work from home when they are sick.  At Kronos, we’re practicing what we preach.  We closed our Mexico City office until May 6, encouraging employees to work from home, or, in cases where their jobs aren’t conducive to working from home, we have given employees paid time off.  We will reevaluate over the next several days to determine if it is safe for employees to return to work.

We have also:

  • Encouraged our leadership team to suspend all non- essential travel to Mexico for all employees;
  • Encouraged employees to speak to their manager if they are planning business travel and have concerns over the trip given the potential health risks; and
  • Encouraged employees who are returning from Mexico (business or pleasure) to work from home for two business days before returning to the office.

Stay well!