Idle time refers to the amount of time an employee is unable to perform his or her job due to the lack of essential items required to perform them.
While most job positions have diverse job scopes that enables employees to take on a lot of different job functions, some positions are very focused on just one type of tasks.
And when these focused tasks require some type of machinery, a machine malfunction can totally cripple the staff’s ability to perform his tasks.
For example, a computer programmer was unable to do any coding for 4 hours because of a breakdown of his computer, maybe due to a hard disk crash. This 4 hours would be classified as idle time.
Idle time can sometimes be a huge problem for large corporations and can often leave managers frustrated.
The exasperation comes from the ironic situation where the worker is present and ready to do his job, but the tools necessary to do the job is missing.
From a financial viewpoint, idle time cost a company money with every minute that passes.
This is because employees are paid to do their work. And their work is supposed to add value to the company, which contributes to the end-product that is sold to customers to generate revenue. This revenue is then used to pay for the employees’ salaries.
So idle time would effectively mean that a company would be paying their workers even though they are not providing value.
It also pulls down the productivity levels of the workforce.
For instance, a full time machine operator in a factory might be receiving a compensation of $2,500 a month which might translate into about $14 per hour of work. If the machine breaks down for 3 hours, the operator would have spent 3 hours idling around doing nothing and contributing zero value to the company. The company would have paid him $42 ($14 x 3) for doing nothing.
If the machine was operational, this 3 hours could have meant $300 worth of products being produced by that one person.
So instead of getting $300 worth of products for $42 of labour, the factory would end up with zero products and $42 of labour costs.
When the machines comes back up, the company might even have to pay overtime premium pay for workers working beyond straight time if it has a tight schedule to deliver to a customers. Further compounding the costs of idle time.
From another point of view, manufacturing operations can self-inflict idle time on itself from bad planing.
For example, if phase 1 of production produces 100 units of product per hour but phase 2 can only process 70 units per hour. This would effectively mean that phase 1 workers would be hogging idle time until phase 2 catches with their speed.
It can also be said that if a piece of equipment has the capacity to produce 24 units of product by running 8 hours a day, but is only used to produce 18 units a day. Then it has an idle capacity of 6 units which is equivalent to 2 hours of idle time.
Something to note is that a production overrun does not necessarily mean zero idle time.
Managing idle time
There are two main ways that company deal with idle time so that the capacity of workers is not wasted as a deadweight loss.
The first and most common is to have a backup or substitute machine in place so that in times of unexpected breakdowns, there is a spare machine that employees can use to continue with their work.
Substitute machines can sometimes not be as effective as the original. But would also be able to do the job at a decent quality.
That would buy enough time until the original comes back online.
For example, office workers who use desktop computers to do their administrative work can use laptops as a backup plan.
The other solution is to give employees different job scopes that don’t require the same inputs.
For example, if a telemarketer is given administrative tasks too, then he can spend his time on admin when the phone system breaks down.
This enables management to prevent or minimize wastage of labour costs.
When major idle time is concerned and a real possibility for some types of businesses, there are also insurance policies that can provide coverage for these types of losses.