An automated labor management system can work wonders on a Retailers budget by optimizing labor spend, saving managers time, and preventing hefty fines for breaking labor and union rules.
This is the second in my five-part series on best store operations practices covering how to thrive when prices drop. In the previous blog, I dove into what I consider the most important step to thriving – being able to streamline corporate-to-store communication and improving in-store execution. Today, I’m going to tackle labor management.
If your store manager is able to put together a schedule based on all of the fixed variables, dynamic variables come into play. Your department manager, Jack might get sick or need to take the day off for his daughter’s graduation. Susan might not be able to come to work because she is snowed in. Or, maybe, there is a surprise best seller, like the famous dress, which was either blue or white depending on who viewed it, which will result in an increase in customer traffic.
I’m going to walk you through the simplest way to solve these problems (literally with the click of a button). I’ll also dive into how retailers are using workforce management (WFM) solutions to untether their store managers from the back office and better align labor with customer traffic.
Smart Algorithms that Learn from Stores
Hundreds of variables should be taken into consideration when store managers sit down at their computer and start creating their next schedule. Every labor law and union rule, every employee preference and availability, all the past sales and customer data; that all has to be in your store manager’s head when writing the schedule.
All things considered, store managers have to take into consideration a lot of information to make the first draft of their schedule. And schedule generation is only one of their jobs. With variation in manager retail experience and skill, there are bound to be mistakes. The process should be made more efficient for stores to maximize their productivity while complying with business rules and labor laws.
To avoid these pitfalls, some retailers have implemented automated labor scheduling solutions. Retail-centric labor scheduling solutions can take all of the variables into account, including forecasted customer demand, and generate an optimized schedule that maximizes sales while complying with business rules and associate preferences. Once the system automatically generates the schedule, the store manager makes a few minor edits, if needed, to keep schedules fair for associates. A good solution will give near complete schedules. A great solution will learn from the edits the store manager makes to incrementally improve back-end scheduling logic. However, the best solutions not only learn from the store manager but also make suggestions for ways to further optimize the schedule. The expertise of the WFM solution comes down to the simplicity of the User Interface, with the complexity of the math hidden in the background.
If your system has a complex algorithm but the store manager needs a Ph.D. in Mathematics to understand how to operate it, it might add more work instead of reducing it. With manual tools such as spreadsheets, store managers will have to read through data and reports when trying to put together the following week’s schedule. But too often, they are too busy to look through all that information. Instead, they copy over last week’s schedule (repeating previous errors) or hurriedly make a new one (and make new mistakes). This old way of scheduling is ineffective, takes copious amounts of time, results in misaligned shifts, and exposes the retailer to legal action due to non-compliance with labor laws.
All your store manager should have to do is look at the screen and be shown a near-final schedule.
Real World Applications
Theories are good, but real-world examples are better. Today several retailers across verticals such as soft goods, department stores, quick service restaurants, etc. are using powerful workforce management solutions to save their store managers time, optimize schedules, and align store labor with customer traffic to increase sales.
Vera Bradley is one retailer that decided to implement a workforce management solution after facing challenges in their stores. Store managers used to spend between 5-15 hours a week writing schedules; time they could have been spending on the floor with customers or training associates. Within months of implementing their current workforce management solution they saw the following benefits:
- Instead of spending between 5-15 hours manually writing schedules, store managers now spend, at most, 30 minutes a week.
- Optimized schedules automatically comply with labor laws and business rules.
- Associates view schedules and swap shifts (within business policies) without needing guidance from store managers.
Another retailer, Belk, decided they needed a workforce management solution to perfectly align store labor with customer demand. Their approach included implementing a workforce management solution with an analytics package.
Belk also reported receiving significant improvements in labor spend and associate alignment.
In addition to better aligning store labor with customer traffic, Belk also saw the following benefits:
- 80 basis points increase in sales, resulting in annual increase in sales of roughly $31 M
- $5 M reduction and redeployment in annual payroll
- 500 basis point lift in customer service scores
This success is common for retailers who implement workforce management solutions. As providing the best possible customer service becomes the main differentiating factor between brick-and-mortar retailers and online pure-plays, having a workforce that is available when the customer needs them is essential. Every minute spent fixing scheduling errors, understanding reports, creating schedules, etc. is one more minute that a customer feels underserved and ignored. To learn more about the benefits your stores will see with a powerful workforce management solution, please visit us at http://reflexisinc.com/solutions/labor-operations/.