Cost-efficient staffing under annualized hours

Egbert van der Veen, Elias W. Hans, Bart Veltman, Leo M. Berrevoets, Hubert J.J.M. Berden

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Abstract

We study how flexibility in workforce capacity can be used to efficiently match capacity and demand. Flexibility in workforce capacity is introduced by the annualized hours regime. Annualized hours allow organizations to measure working time per year, instead of per month or per week. An additional source of flexibility is hiring employees with different contract types, like full-time, part-time, and min-max, and by hiring subcontractors. We propose a mathematical programming formulation that incorporates annualized hours and shows to be very flexible with regard to modeling various contract types. The objective of our model is to minimize salary cost, thereby covering workforce demand, and using annualized hours. Our model is able to address various business questions regarding tactical workforce planning problems, e.g., with regard to annualized hours, subcontracting, and vacation planning. In a case study for a Dutch hospital two of these business questions are addressed, and we demonstrate that applying annualized hours potentially saves up to 5.2% in personnel wages annually.
Original languageUndefined
Place of PublicationEnschede
PublisherUniversity of Twente, Department of Applied Mathematics
Number of pages15
Publication statusPublished - Oct 2012

Publication series

NameMemorandum
PublisherDepartment of Applied Mathematics, University of Twente
No.1995
ISSN (Print)1874-4850
ISSN (Electronic)1874-4850

Keywords

  • EWI-22385
  • METIS-289739
  • IR-84363
  • Staff capacity allocation
  • Annualized Hours
  • Mixed-Integer Linear Programming
  • Workforce capacity allocation
  • Contract-mix and skill-mix planning

Cite this

van der Veen, E., Hans, E. W., Veltman, B., Berrevoets, L. M., & Berden, H. J. J. M. (2012). Cost-efficient staffing under annualized hours. (Memorandum; No. 1995). Enschede: University of Twente, Department of Applied Mathematics.