Work It Out Oct 1, 2007 12:00 PM
, by William Atkinson
JobZone
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Good help is always hard to find, but in retail, attracting and retaining workers is near impossible. How dismal is workforce loyalty in retail? According to “Future of Workforce Management for Retailers,” a report published by IHL Consulting Group, retail turnover in the U.S. is 200% to 300% a year.
Retailers face many challenges in staffing the store, from labor shortage and low unemployment to rising labor costs and increases in employee benefits. The options for dealing with this shortfall are grim: cut benefits, suspend raises, and reduce staffing levels — and in the process, lower service levels.
Or, you could turn to technology and try a workforce management system. While not a magic formula, WFM can help merchants meet employee preferences and store needs, improve employee performance for greater retention, provide training, and create a brand for employees as a good place to work.
What is WFM?
Workforce management (also known as workforce optimization) refers to any technology or business software designed to help organizations manage their processes for forecasting, scheduling, tracking, evaluating, and compensating employees. The goal is to have the right people, with the right skill sets, in the right jobs, at the right times, at the right cost, and on a consistent basis — so that you're not overstaffed or understaffed. This helps decrease labor costs, while at the same time increasing sales by having enough workers in the proper locations.
WFM has been in place for years in manufacturing and distribution settings, and more recently in call centers. The technology works well in these environments, because workers tend to be centrally located and have regular shifts that change little, and turnover is relatively low.
Initially, WFM faced a challenge in retail because employees are dispersed, work varying shifts, and have high levels of turnover. Most WFM software didn't offer enough flexibility, but system vendors have been addressing the issue for retail use.
The two most frequently used WFM applications among merchants are labor scheduling and time and attendance. WFM can generate employee schedules based on labor requirements for each location, while taking into account external regulations (laws related to minors, union policies, etc.) and employee preferences for time off and work hours. Such systems can schedule for stores, headquarters, call centers, and distribution centers.
A system's time and attendance application tracks the actual working hours of store employees. It can also eliminate “buddy punching” (having coworkers punch in and out for workers) by using biometrics technology.
Some of the other WFM operations and store applications include:
Task management: helps schedule employees who perform different functions in the same locations, to make sure the appropriate number of workers are available for each function.
Forecasting and budgeting: provides a look forward into the future, especially to holiday and other peak periods, and can do “what if” scenarios on hiring needs.
Employee and manager self-service: allows employees and managers at each location to access their schedules from work or home by going on the Web. In addition, when workers need to change their schedules, they can post requests on the site and allow other employees to volunteer to swap or take over the shifts. Managers can also approve the switches online.
Leave management: coordinates requests for employees who seek leaves of absence.
Human resource applications for WFM include talent and performance management, government compliance and reporting, and litigation services. Other applications are recruitment, compensation and payroll, training (including e-learning), and employee separation.
“Retail operations people are looking for time and attendance, scheduling, budgeting, forecasting, self-service,” explains Pete Reilly, senior vice president and general manager, retail workforce management, for WFM provider RedPrairie Software. “HR people tend to look for things like talent management and performance management.” Reilly notes that RedPrairie offers WFM functionality only for retail operations users.
Benefits of WFM
Retailers can use WFM to leverage recent upgrades and investments in point-of-sale applications, hardware, and store systems to make associates more productive, says Gale Daikoku, research director, retail, industry advisory services, for Gartner Group.
The software can also automate labor-intensive processes associated with tracking time keeping and scheduling for store management. What's more, WFM provides visibility to store-level performance within regions and comparisons with similar stores to benchmark performance and to highlight execution opportunities. You can also use the technology to standardize work and apply consistent labor standards across the store base.
Because of the significant organizational commitment and technical expertise typically required to implement WFM, it's been a viable option only for sizable retailers. RedPrairie, for instance, focuses on retailers with 5,000 or more employees. “Over time, though, I think the technology will work its way to smaller retail chains,” says Reilly.
SD Retail Consulting, which primarily works with retailers to help with process and performance improvement, is “seeing quite a bit of interest in WFM in the midmarket — those chains with 60 to 150 stores,” says vice president Joe Madigan. “One reason is that, when implemented properly, it helps the stores function in a more uniform manner and forces execution in the stores to the company's business plans.”
