Workforce Management System: What’s The Hold up?
With so much emphasis placed on cost-efficiency and lean, agile organizations, it is a wonder that many more organizations have not employed so measure of, or a system to manage their workforce; or at least automate a number of processes to lessen the impact on HR, Payroll, Managers and the C-Suite.
Within the retail world, inventory costs factor highest in a company’s general ledger, seconded only by the cost of wages, salaries and benefits. In the United States alone, 1 in 5 jobs come from the retail world – from corporate head offices, warehouses/distribution centres, or on the “front-lines” within the retail stores. According to the latest figures from the NRF, this amounts to 28.1 Million Americans employed within retail, and close to 17% of the Nation’s wages, salaries and benefits. Couple the aforementioned facts with today’s economy, and it is no wonder that C-Level executives look towards slashing budgets, mass lay-offs, benefit curtailment and outsourcing, in order to “make ends meet”, or to “keep the company afloat”. These cost-cutting measures have been seen time and time again in the news, and while they may be effective in the short-term, the long-term effects of eroding customer confidence or satisfaction can hurt a business far worse.
There has been a great push in the last few years by retail organizations in order to adopt Workforce Management Software, and to use the time and attendance modules to reduce payroll errors and costs. Most utilize the software for just this purpose, and many do see gains in the short-term with reductions in payroll dollars. This is like only measuring the gas mileage of a car without exploring all of the car’s options.
Take for example, a situation where you have been to a retail store, and have had to wait in a long line to make your purchase. People waiting in line with you become frustrated, this in turn negatively impacts the cashier, who in turn is frustrated with the additional workload, and in what should be a pleasant buying experience, can quickly turn sour, and a customer can ultimately choose not to shop any further with your organization, or to abandon their purchase in the line. Most companies see this as a cost of doing business, while advertising a product in order to increase sales with a “you win some, you lose some” perspective, seeking to get a pound from the few, rather than an ounce from the many. However with a properly adopted workforce management strategy, the marketing executives would know the potential impact of the advertised product, and not only have the available stock for purchase, but would also be able to have the stores schedule the appropriate number of cashiers and sales associates at the appropriate time, so as to lessen the frustration of all involved, and actually increase revenue, and the likelihood of return shoppers.
The same data that marketing analysts and merchandising analysts use to successfully order and advertise the products your company sells can also be measured against store traffic patterns and payroll costs, in order to maximize the customer satisfaction. Proper planning, scheduling and forecasting based on historical sales, store traffic and payroll hours is the key, providing you with metrics to show your success rate: sales per hour, sales/traffic ratios, checkout speed, etc… all of which can be used to measure your customer satisfaction rate and brand loyalty. Many workforce management suites are equipped to analyze your sales and traffic data, and to help you manage daily and weekly schedules to optimize your staff to handle the influx of customers, as well as to be dynamically responsive and flexible enough to “crowd on more sail” when needed to catch the “wind”. Mix those aspects with the ability to schedule tasks other than cashiering, and you begin to utilize a workforce management suite to its fullest. Your organization will see reductions in overtime and overscheduling, payroll errors and costs, while increasing productivity and efficiency, without overloading your employees or denuding your store of staff at crucial points. In the end, you can have your cake, and eat it too.
What are the benefits?:
So the real question is, what can Workforce Management do for your organization? This question could have a number of answers covering several areas:
- Time and Attendance Tracking;
- Payroll Automation;
- Manual or Dynamic Scheduling based on Company Sales & Store Traffic;
- Task/Activity Management;
- KPI Reporting / Business Intelligence.
- While the above provides the features, the below are your possible yielded results:
- Reduced Labor Costs;
- Reductions in Payroll Errors;
- Increased Productivity;
- Increased Sales;
- Improved Customer Satisfaction, Retention and Loyalty;
- Improved Employee Retention and Satisfaction.
What can it do?:
Ultimately, WFM can be boiled down to three major areas:
1) Planning (Forecasting and Scheduling):
Retail stores have higher and lower periods of activity, depending on holidays, peak/trough seasons and marketing promotions. By integrating your sales, traffic and employment data, and deriving KPI’s, your WFM system can help to create an historical “Roadmap” that will not only show you where your company performance has been, but can also help you define where you will go based on trends, where you can optimize your staff, or where you can capitalize on sales, and maximize your customer shopping experience. By using this data to properly schedule your staff, as well as to manage their daily activities, you achieve a major milestone in WFM, by placing the right person, at the right task, at the right time.
“…63% of organizations are placing major focus on higher productivity when it comes to Workforce Management…” – Source, Ventana Research
“…Most retail organizations have long used analytics to optimize inventory, pricing and forecasting on a store-by-store level, but many have been slow to extend analytics in an effective way into their WFM solutions…” – Source, RIS
2) Time Collection & Payroll Automation:
This is by far the most common, and generally the least painful, adoption of Workforce Management Software. By automating the collection of employee time “punches”, and auto-converting these “punches” into paid hours to be uploaded to your organization’s accounting software, inordinate amounts of time can be saved, not to mention the reduction in overtime and payroll errors.
“…an organization with 100 employees can lose over 8 hours of productive time every pay period with manual payroll processes…” – Source, The American Payroll Association (APA)
“…the business costs associated with human error: up to 8% of a business’ gross annual payroll…” – Source, The American Payroll Association (APA)
Whether through extensive business intelligence, or simple key performance indicators, metrics or service level agreements, Big Data is being compressed into easy-to-read, easily-digested and easily-accessed reports to help Managers “manage by exception” and spend more time selling, as well as to have C-Level Executives understand, and help guide company planning initiatives, without the need for drastic cuts to payroll or benefits.
A good part of my own personal workforce management experience has been within the world of Call Centers, and nowhere else is there a need for tight scheduling and dynamic forecasting. But as I discovered in dealing with retail organizations, the overall concept remains the same. This is about keeping your customers happy so that they can return, and see shopping as the pleasant and frictionless experience it should be. Just remember this; it can take months to acquire a new customer, just as it can take seconds to lose them. Don’t just pander to their material needs, ensure a solid experience, and they will return, again and again.