Summary of Labour Variance

Summary of Labour Variance

1. Idle Time

   • Adverse
     • Machine Downtime
     • Poor timekeeping
     • Waiting for Materials to arrive
       • Lack of Materials
       • Materials delivered late
     • Delays earlier in line
     • Strike
     • Staff off premises being trained
     • Power cut
     • Injury/Death
     • Machine Breakdown
     • Health and Safety concerns
     • Bacon sandwich breaks (at Middlesbrough College)!

2. Rate

   • Favourable
     • Lower skills required
     • More efficient working more quickly
     • Lower pay grades
     • Trainees/apprentices used
     • Produced less goods = less bonuses
     • Less down time
     • Less overtime than expected
     • Internships
     • hourly paid
     • zero hours contracts
   • Adverse
     • Pay increase
     • Higher grade workers used
     • Unexpected overtime
     • Unexpected bonuses
     • More goods produced (piece work)
     • Agency workers used
     • Subcontractors
     • Aging workforce
     • Government policies - minimum wage or living wage
     • Unexpected sick pay/death in service

3. Efficiency

   • Favourable
     • Better quality materials
     • Incentives to work more quickly
     • Better machinery/tools
     • Errors in allocation (under estimated)
     • Less breakdowns
     • More skilled staff
     • Unexpected order - bulk
     • Late cancellation of order
     • Good organisation and planning
     • Good morale
     • Exceptional personal skills of individual workers
   • Adverse
     • Poor quality materials
     • Idle time
     • Machine breaks down
     • Lack of training
     • Lower skilled staff - slower
     • Unexpected order - more output
     • Poor morale/work ethic
     • More wastage
     • Poorer quality machines/tools
     • Older machines
     • New starters - inexperienced