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A brief introduction to Demand-Led Rostering and Annualised Hours

Demand-Led Rostering and Annualised Hours systems were first adopted in the UK in the early 1980s.

Implemented and managed successfully, organisations found that this resourcing model provided a powerful catalyst for operational change and strengthened employee relations.

It continues to grow in popularity amongst organisations who understand that aligning the workforce to the workload delivers significant and sustainable benefits for all stakeholders.


What is this way of working?

There are numerous definitions, including:

"A method of computing working time by the year rather than by the week. This method is used sometimes in industries or occupations where there are seasonal variations in demand for services of employees."

"A form of compressed work schedule or reduced hours, in which employees (either full or part-time) work a certain number of hours per year rather than per week. Employees can take advantage of their seasonal interests, by taking certain parts of the year off."

"A system that allows for employees' working time (and pay) to be calculated and scheduled over a period of a year (or some other period longer than a week)."

What principles does Demand-Led Rostering and Annualised Hours follow?

The principles that underpin this approach include:

  • The target number of production or service hours are identified for the year at the outset. This analysis and forecasting provides the baseline upon which a system can be designed.
  • The actual hours planned to be worked can reflect a flat or fluctuating demand profile. For example, when there is seasonality or where certain days of the week may be busier than others.
  • The target number of hours are then divided by the desired annual contract ‘size’ to give an indication of the number of employees and team structures that may be required.

From this, shift patterns can be designed that align labour supply with demand.

This is the key to how Demand-Led Rostering and Annualised Hours can deliver significant improvements in productivity, efficiency, compliance and employee well-being.

What it isn’t…

  • A pre-determined shift pattern or number of working hours - The flexibility the system affords is a key benefit.
  • A ‘cut and paste’ job from another organisation - Every organisation is different operationally and culturally, so each system is unique.
  • A ‘fire and forget’ process - Demand models should be revisited regularly with organisations adapting the system according to dynamic factors and feedback from their employees.
  •  A purely top down driven process - Employee engagement and buy-in is essential to long term success.


Why would you use Demand-Led Rostering and Annualised Hours?  

There are many reasons why this approach might be appropriate for an organisation. Here are just a few:

  • Increasing flexibility to react to fluctuations/volatility in demand without relying on temporary labour or zero-hour contracts.
  • Minimising underutilisation in low seasons and overworking during times of peak demand.
  • Ensuring predictable labour costs and reducing reliance on overtime and agency.
  • Improving workforce planning processes based on demand forecasting/modelling.
  • Providing the flexibility needed to support employee well-being and work-life balance.
  • Improving fairness and certainty around working hours and pay.
  • Removing complexity and risk through rationalisation and standardisation of working arrangements.


Some examples


What now?

We hope you found this guide useful. If you would like more detail on Annualised Hours and Demand-Led Rostering, we have more resources available on our website.



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