The Human Side of Workforce Management

By  Steve Rowen, Managing Partner, RSR Research
Retail executives, store managers, employees, and even the public at large have long been wary of efforts to automate workforce management. From current and former employees complaining to the press about losing hours, to cynical consumers expecting a reduction in service, even to resistance from store managers who see a reduction in responsibility and control, there is a lot that can go awry when implementing workforce automation.

But such automation is more important than ever. Between crumbling demand and the resultant sales pressure on labor hours, the rise in cross-channel shopping, and an increase in non-sales work demands on store employees, retailers must make extraordinarily accurate decisions about who to staff when, and achieve climbing productivity targets on fewer labor hours without impacting customer service.

With the relative bad reputation that workforce automation is gaining in the press, for our latest report on Workforce Management, The Human Side of Workforce Management, RSR decided to highlight the success stories - to look at the retailers who have implemented workforce automation, and done so not just by avoiding alienation of large swaths of constituents, but with the enthusiastic support of those constituents. We interviewed four retailers that are either well down the process of implementing some aspect of workforce automation, or have fully implemented such solutions. While not all of these retailers are performance winners, they all are embarking on a path towards workforce transformation, and see that transformation as key to achieving winning performance in the future. Consistent with the better-performing retailers in our benchmark research on workforce management, these retailers view their employees as assets - something to invest in and grow - and not just tools to be used and discarded.

Below is an excerpt from one of these conversations; a retailer operating 250+ stores whose associate population can range from 100-500 associates per store. Retailer 1 identifies the following technologies as very important in its WFM program right now:

- Sales and labor budgeting
- Forecasting and scheduling

In regards to standards, "Many of our employees' non-selling tasks (i.e. price changes), are pre-calibrated by our merchant system, which tells us how much labor will be required. We also build engineered time parameters into labor transactions and task standards (ringing time, bagging time, stock room time, cleaning out dressing rooms, etc). These are all built into the schedule in a bottom-up fashion, and this all goes beyond the actual completion of the transaction. The department store has not altered much in the task standards to complete a sale - you can only ring so many transactions in an hour. So a lot of the store operations-based standards we put in place more than 10 years ago (evaluated by consultants at that time) are still in place. They are very straightforward, and we can check all of them to make sure they're consistent with productivity metrics."

Retailer 1 continues, "We manage a lot of our processes through batch processes, so things run without the involvement of individuals. We deliver completed schedules to the store systemically, but there are myriad data types we look at: scheduled hours by day, scheduled payroll, sales-per-hour, measuring exceptions, the number of edits a store might make to a schedule, precise compliance info, we examine auditing tools, and on a daily basis we bring back the previous day's payroll in order to evaluate how the store is doing compared to how it was scheduled. We also feed in sales after-the-fact to see what we should have scheduled. All of this is used to create a small set of reports to deliver to central store operations and giving visibility to store managers into what's happening in their stores. And one of the most powerful tools is that each week, we can show them what their schedule is: If they don't make any reactionary change by mid-week to what has occurred, the systems forecasts where they will come out at the end of the week. It eliminates surprises."

BOOTSTRAP RECOMMENDATIONS
When asked about advice to fellow retailers, Retailer 1 recommends that anyone preparing for a WFM automation upgrade create an information-asset roadmap in advance.

"Make certain you look long range at all of the data that is going to be available to you and understand how you're going to access and use it. This way, you can start to develop your reports even while you're configuring your scheduling application, because if you don't have the ability to get the data out, it's not worth the investment to obtain a more sophisticated application. Without the ability to gather predefined information and report on it, you'll never be able to make productive use of the labor you have available - all of the efficiency and features of a complex solution will be of absolutely no benefit to the company. In that case, my advice would be to simply stick to a paper-based scheduling system or something like the predecessor system we had in place, a distributed database model."

Retailer 1 continues, "I've done this three times in my career, and even though I've known this going in each time, IT wants to push this process [identifying measures and reports] to the end of the implementation - it really needs to happen simultaneously."

When asked about pitfalls to avoid, Retailer 1 warns of the dangers of allowing the IT environment to dictate progress. "It is crucial to have an IT infrastructure that supports this type of technology. Retailers can't let their IT environment be a limiting factor, and that has to be a number one consideration; otherwise, you end up fighting the implementation and you'll never be as successful as you'd hoped."

Again, this is only a small excerpt from a section of conversation with one of our four retailers. To read the report in its entirely, please visit the following site.