The Road to Recovery: How Retailers are Optimizing Labor Spend

COVID-19 has dramatically changed how retailers forecast and schedule labor at their stores. Recent labor laws and regulations must be considered while creating labor schedules. New safety guidelines and in-store promotions require shifting how labor is allocated at stores. Add to this, the responsibilities that store associates have at home, such as child care, facilitating distance learning, and taking care of relatives who are ill.

This makes labor optimization one of retail’s most pressing issues today. If labor isn’t allocated properly at stores, retailers will struggle to execute critical initiatives, keep employee morale and engagement high, and provide a safe and effective customer experience.

Recently, RIS News held a webinar discussion with Reflexis and AutoZone that explored how retailers today are reducing labor spend and optimizing labor operations to ensure success during the pandemic. This conversation looked at how AutoZone is using intelligent workforce management to create more accurate labor forecasts and implement quick changes in response to COVID-19.

Here’s how AutoZone reduced $100 million in labor costs over a period of 7 years and continues to improve labor scheduling during the pandemic:

1. Ensure Compliance: Consistently Factor Labor Laws into Scheduling Processes

The labor compliance landscape is shifting quickly, with predictive scheduling regulations on the rise, as well as changes to minimum wage laws at the federal, state, and local level. COVID-19 has led to even more dramatic shifts, as new safety-related laws are being quickly implemented, with laws noticeably differing by state.

During the webinar, Tom Newbern, Executive Vice President of Store Operations at AutoZone, discussed the importance of focusing on labor compliance and managing payroll. “Today, it is increasingly important to have a strategy and executable tactics with regards to payroll management,” he said. “The compliance environment is changing so rapidly. 27 states and D.C. have changed their minimum wage law since January 2014.”

Intelligent workforce management, used alongside robust time and attendance software, has the ability to automatically factor in labor laws and regulations when creating labor schedules, and can send alerts to on-site managers when there is an impending violation. This gives store managers the ability to proactively correct noncompliance issues before they occur. These systems also control labor costs, reducing payroll errors and unnecessary overtime spend.

2. Improve Forecasting: Accurately Respond to Rapidly Changing Conditions

COVID-19 has greatly shifted the amount of labor required to complete all important tasks at the store. Hand sanitizer and hand wipe stations need to be regularly stocked. Curbside pickup and delivery services need store associates to collect and prepare online orders. And retailers are still shifting hours of operation to give senior citizens time to shop and store associates time to restock shelves.

Tom Newbern spoke to how the pandemic impacted AutoZone’s labor forecasting processes. “Our forecast model had to change. We saw some great variance in our sales and results from the beginning of the crisis to things settling down. We were in a position where we saw some massive swings.”

With intelligent workforce management, your labor forecasts can account for all of the important variables that are impacting your stores today, such as customer traffic, sales projections, workload calculation rules, and changes brought about by disruptive events. These solutions provide retailers with the ability to create precise best-fit forecasting models, accounting for all activities that have to be completed in the store.

With intelligent workforce management, you can adapt quickly to unexpected changes in product demand, customer traffic, and the conditions around disruptive events.

For more insight into how you can optimize labor operations during the COVID-19 pandemic, contact us at marketing@reflexisinc.com and we’ll set up time to chat.