Question

Developing work schedules for variable-cost personnel requires taking into account some considerations that are quite different from those used in developing work schedules for fixed-cost personnel. List and discuss two such considerations.

Answer 1

Developing work schedule for variable cost and fixed cost personnel:

Variable cost: This is a type of cost that changes as per the changes in the organization. That means it is always varies as per the requirements which is called as variable cost.

Fixed Cost: This is a type of cost that is constant all the times. There is no change in by any means which is called as fixed cost. That means irrespective of change whether low or high the cost remains fixed.

These are the most well-known terms that are used during the submitting of billing hours to client in multinational companies. This kind of billing mostly we can identify in IT and other MNC companies. Most of the international companies only interested to pay the bills on billing hours. This is depending up on the project and its deadline. The service based companies needs to understand the bill hours’ requirement and allocate persons based on the client requirement because the final billing is decided by the clients.

· Identify the persons that are required for the project and same need to communicate to the client. People management and work assignment are very important in variable cost

· Always a buffer will be maintained in order to maintain the shortage of billing hours

· Only paid based on the working hours so that if there is any decrease of billing there is also a decrease in the employee pay scale as well. Because these are purely project specific if project demands more hours the employee contribute more and paid as an extra day in the billing. Whereas if a project has less work or production to do at the same time the work hours are also reduced or reduce in billing hours which is known as variable cost in general

· Always focus on meeting the number of working hours that are decided for the project

· Organize people in such a way that all terms and conditions of working hours are clearly communicated to every individual and loss of manpower

· The extra buffer(temporary) is maintained to get the right billing hours

· Even leaves are planned prior in such projects to manage the billing hours are under variable cost

· Right people engagement and assign work because there are certain product or project delivery timeline

· So schedule personnel engagement is important to meet the desired targets

Developing work schedule for fixed cost personnel:

Whereas in Fixed cost personnel it is equal important to develop a proper schedule to engage the people but not like as variable cost. It is not at all related to variable cost. The company pays in a fixed cost structure through there is increase or decrease of production.

· Most of the people are under fixed cost because to avoid any deductions in the pay structure and avoid variable in the compensation

· Specific project requirement of persons is identified and allocate.

· Even people management and schedule of works are clear [by identifying the person’s calendar which gives the clear information about the project delaine

· Even during no work in a specific project they can be used in another projects with limited trainings

· More people monitoring but less in work schedule in fixed cost

Compare with variable cost the developing work schedule for fixed cost will be not much. This is due to the use of people in multiple projects. Even people who are under fixed work schedule can be moved here and there as per the project requirements.

Whereas the variable cost is depending up on the product and output. If there is huge production the people are need to be extended or recruit as per the requirement else manage with the available staff. For variable cost the manage of work schedule will be little tough because of the work structure and unexpected production needs.

The variable business is best example of seasonal demand for example consider Amazon or flipkart ecommerce business. During the festivals or offers like Big Billion Days or Great Indian Sale. The orders and deliveries become more and more compared with the normal days. During that days developing work schedule as per the requirement is very important to manage the orders and deliveries so this can be considered under variable cost. Where the high demand and production cost variables and encourages personnel to do more to get more.

Whereas the persons who are permanently working under fixed cost there will be any change because they are considered under fixed their need is not limited. Their working conditions and work structure will remain same as per the usual. There is no change in the high or low of the production.

Even the hotel business considers during holidays and weekends where most staff are required than compared with the normal days. In such case the company recruits as per the need by considering them under variable cost by considering the regular staff under fixed cost.