Logistics & Warehousing: Peak-Season Labor Curve and Overtime Math

Peak season rewards operations that model the labor curve early and staff to it—not the other way around. Below is a step-by-step playbook to convert demand into labor hours, plan the right mix of core and flex headcount, and use overtime only where it saves money and protects quality.

1) Build the Demand Curve (in 45 minutes)

Goal: turn projected orders into labor hours by function.

Step A — Forecast daily orders (D):
Pull last year’s week-by-week volumes and overlay this year’s sales plan, promos, marketplace events, and carrier cutoffs. Create day-of-week weights (Mon = 0.9, Tue = 1.0, Wed = 1.05, Thu = 1.1, Fri = 1.2, Sat/Sun = 0.8…adjust to your history).

Step B — Convert to labor hours:

Typical “minutes per unit” (MPU) starting points:

Receiving: 0.30–0.45 min/unit (or 8–12 min/pallet)
Putaway: 0.20–0.35 min/unit
Picking (each): 0.50–0.90 min/unit (wave/batch reduces)
Packing: 0.35–0.60 min/unit
Shipping: 0.10–0.20 min/unit

Step C — Add indirects and shrinkage:

Indirect (inventory control, housekeeping, rework): +8–12%
Absenteeism & breaks (by compliance jurisdiction): +10–15%

Pro tip: Include a learning-curve factor for new hires (e.g., week-1 productivity at 70% of target; week-2 at 85%). It materially changes headcount for the first 10 days.

2) Turn Labor Hours into Headcount

Core vs. Flex strategy

Core crew: headcount that covers the 60–70th percentile of demand.
Flex pool: 4-hour “extras” blocks plus weekend float to handle the top 30–40%.

Example (Picking):
Forecast = 22,000 units on a Thursday.
MPU Picking = 0.65 → 14,300 minutes (238.3 hours).
Add 10% indirect/shrinkage → 262 hours.
Add 15% for week-1 new hires → 301 hours.
Headcount (8h shifts) = 301 ÷ 8 ≈ 38 FTE.
Plan Core 28 + Flex 10. Flex arrives 17:00–21:00 to crush late waves and carrier cutoffs.

3) Overtime Math That Protects Quality (and Compliance)

Loaded OT rate = Base × OT multiplier + payroll taxes/benefits.
Assume Base $20/hr, OT 1.5×, 12% employer costs → $20 × 1.5 × 1.12 ≈ $33.6/hr.

When is extra headcount cheaper than OT?

If you’re running >10–12 OT hours/worker/week for over 3 consecutive weeks, fatigue and errors typically wipe out the “savings.”
Track UPH (units per hour) and errors per 1,000. If OT correlates with declining UPH or rising rework, cap and add headcount.

Compliance notes (non-exhaustive):

USA (FLSA): overtime rules vary by state (daily OT in CA, meal/rest penalties).
Canada: provincial OT thresholds (often 44–48 hrs/week), public holiday pay rules.
Always validate with local HR/legal.

4) Acceptance Levers That Fill Shifts

Predictable blocks: fixed 4-hour extras (e.g., 5–9 PM) attract students, second-jobbers, and caregivers.
Text confirmations 24 hours and 2 hours before start; share gate/locker map.
Shuttle pickup from transit hubs; subsidized ride-hail after 10 PM.
On-the-spot $25 attendance token after first week; tiered weekly bonuses.
Instant pay (weekly) for hourly roles; this beats small wage bumps.

5) 90-Minute “Day 0” Onboarding (Before First Shift)

Site tour (muster points, washrooms, lockers, break areas, water).
Scanner crash course: log-in, scan flows, exceptions (shortages, damaged).
Safety micro-training: lifting, pallet jacks, PPE, and near-miss reporting.
Quality lens: when to escalate (wrong label, tote mismatch, no location).
Buddy assignment: 2 shifts shadow, radio channel set.
Photo ID & roster; add to WhatsApp/SMS broadcast list.

6) Quality Guardrails That Take 10 Minutes a Day

First-week error log (who, what, SKU, fix time).
Pack QC sampling at AQL 1.5–2.5 equivalents for high-value orders.
Andon call: 60-second rule—raise hand/flag instead of guessing.
Rework bay staffed by experienced leads, not rookies.

7) Layout & Slotting Quick Wins (48 hours)

Put top 50 SKUs in the golden zone; reduce walk time by 15–25%.
One-touch flow: receiving → putaway → pick facing; minimize re-handles.
Wave/batch pick by carrier cutoff; pre-stage by route.

8) Daily Stand-Up Dashboard (Copy/Paste)

9) Contingency Playbook

Weather surge: pre-approve remote login for planners; add +20% flex day before.
Wave fails: re-slot top SKUs and move one pack line leader to triage.
Scanner outage: paper pick sheets pre-printed for top 200 SKUs; manual label kit.

Need a predictable flex pool? Raya Workforce deploys pick/pack teams with on-site coordinators, shuttle programs, and weekly payroll—so you hit every cutoff without burning out your core crew.