OPERANNG OPPORTUNITIES

Wally Lynch

Builders Express, Inc.

Dalfas, Tx.75243

OT ALL of the retums have been received but. according to most. 1985 was a tough but good vear in general for the lumber and building material business. Even though some dealers experienced fourth quarter down turns that exceeded seasonal expectations. they sustained some profit on balance.

One practice that continued to hurt profits of many of the dealers we see is the amount of overtime paid. The majority of these operations are open from 55 to 70 hours weekly and are paying from 5 to 15 houn weeklv at time and one-half. The basic rationale behind these expenditures centers around keeping good people happy and staying open the same hours as competitors.

Recently a new client brought an ovenime problem to P.A.I.D. Associates. The company was open from 7:30 a.m. to 5:30 p.m. six days a week. Wage eamers worked 54 hours weekly with an hour for lunch daily. In essence. 14 hours of O.T.. or 26% of 51 hours. was costing the company almost 357r of its payroll expense.

A check of their cash register tapes showed that. like most retailen who also sell contractors. they did about 75% to 807r of their business in 20% to 25Vc of their open hours. Since they were open @ hours. this meanr heavl scheduling in about ll ro 15 hours *eeklr'.

The fint pan of the remedy' came in staggering uorli houn. Half of the u'ork force reponed at 7:30 a.m.: the other haif at 8:3O a.m. This eliminated 6 hours of O.T. weekll'. The second move $as to give everyone a mid-ueek da1' off (Tuesda1.-Fridal'1. This eliminated ovenime b1' the last 8 hours each emplol'ee uas uorlting and. for all pmctical purposes. eliminated the stereoq'ped 5-l hour u,eek.

This customer was counrled to revieu each emplovee before the work hours uere adjusted and to malie compensation changes *here deemed advisable. In addilion. it '*as necessary to hire rcme pan dme employees to handle specific tasks like cleaning. cashiering. stocking and stock counting because some re-eulars had left. Replacing O.T. hours with part time hours generalll' results in louer uage rates and no benefit expense because of limited hours. Our client *as pleased because his savings projected in excess of l0% of payroll. This almost exceeded pre-tax protits of the previous vear.

Even though thel are open long hours and uant good emplol'ees too. the chains and majors just do not pa1' overtime as a steadl' diet. lt is veq hard to worli more than {O hours in a {O hour *eek. but in an1'business. it is ven eas! to worh less if the time and effons of its emplovees are not managed.