Magazine Article | March 18, 2015

Inside Petco's HCM Overhaul

Source: Innovative Retail Technologies
Matt Pillar

By Matt Pillar, chief editor

January 2015 Integrated Solutions For Retailers

How Petco’s replacement of an aging and loosely integrated WFM (workforce management) infrastructure rejuvenated HCM (human capital management) practices and minimized compliance risk.

By no means does Petco need an introduction. The pet specialty retailer operates more than 1,300 stores nationwide and in Mexico staffed by approximately 27,000 full- and part-time store, DC, warehouse, and front-office associates. Those associates play a number of roles related to the care and safekeeping of our four-legged friends, from product allocation to pet grooming, from customer care to dog training. While the company’s size and success speak for themselves, streamlining the HCM infrastructure that supports such a large and diverse population of employees proved challenging as it grew. By 2010, the organization found itself maintaining three separate systems to collect time punches and calculate hours worked — stores operated on one system, DCs on another, and the corporate offices managed time and attendance on yet another disparate, Excel spreadsheet-based system. Its most recent time and attendance rollout had been completed in 2000, and it required the maintenance of more than 1,300 software licenses, distributed support, and rapidly diminishing accommodation of the company’s new business processes. Integration with its homegrown scheduling system was cumbersome at best, adding to the company’s struggle to align time and attendance and scheduling with corporate KPIs (key performance indicators).

Michael McCaffrey, director of operations and planning at Petco, says the opportunities to gain back office efficiency and mitigate risk through the deployment of a scalable and consistent enterprise WFM product were apparent. “We wanted to increase our flexibility to define future business rules and processes, but we faced a considerable challenge in the limited availability of timekeeping hardware that would work with our older systems,” he explains. “Adding new stores and replacing broken devices were presenting a considerable challenge.”

The Beginnings Of An HCM Overhaul
By late 2010, Petco began outlining its HCM business requirements and conducting ROI research with the help of analyst firm Gartner. Not long after, a short list of vendors was compiled. After months of exhaustive due diligence, Petco chose relative newcomer Dayforce WFM in the spring of 2013, a decision that surprised even some of the retailer’s own internal stakeholders. “Traditionally, we’ve been known to take a waterfall approach to systems procurement and implementation,” says McCaffrey. “We’re accustomed to working with large integration teams, analysts, and consultants. But the agility exhibited by Dayforce [which was acquired by Ceridian HCM during Petco’s research and evaluation effort] was appealing. The flexibility of its SaaS approach fit our key requirements.” Those requirements numbered more than 100 and included a centrally based, enterprise solution for time and attendance, support of rotation-based scheduling for Petco DCs, demandbased scheduling for stores, support of the company’s attendance point policy, time-off entitlements, support of accurate pay rules across all 50 states, and support of its electronic approval workflow model. “We were looking for all of this from a provider that offered a simple and scalable IT footprint. In fact, Dayforce WFM requires no IT footprint, and by virtue of SaaS delivery, we get the added benefit of receiving a continuous and seamless stream of software updates that bring us new functionality as quickly as it’s developed,” says McCaffrey.

"We’ve significantly improved our oversight and corporate-level visibility into store payroll."

Michael McCaffrey, director of operations and planning, Petco

By October 2013, Petco was in the discovery phase of its Ceridian HCM time & attendance and rotation-based scheduling implementation and had contracted with the company for a forthcoming demand-based scheduling implementation. “Our implementation team was lean, comprising a few key Ceridian HCM product managers who possessed very deep knowledge of the software and a thorough understanding of our requirements,” says McCaffrey. “That was impressive, given that our multiple store-level departments effectively combine several retail and services businesses under one roof. As a result, our engagement was very direct and to the point.”

Equally pointed was the company’s approach to training users of its new WFM systems, which include virtually all of the company’s 27,000 employees. Store managers received about three hours of training on timesheet review and attendance policies. Associates picked the scheduling, time clock, and employee self-service features of the system (such as submission of timeoff requests) in about 30 minutes. “Ceridian contributed training materials which were tailored for our configuration choices. We took those documents and added our internal branding and instructions regarding policy specifics,” says McCaffrey. “For administrators and Petco trainers, Ceridian conducted several hands-on sessions, both on-site and through a webinar format.” That training has paid off in spades. By keeping a close tab on training execution measurements, Petco has realized steadily decreasing routine support calls to its HR team and a constant stream of positive associate feedback through its internal social media mechanisms.

"Employee retention and satisfaction are key goals of our internal brand message, and that parlays into a customer experience differentiator for us."

Michael McCaffrey, director of operations and planning, Petco

Achieving a high level of employee satisfaction with the system was an important goal of the project. “Employee retention and satisfaction are key goals of our internal brand message, and that parlays into a customer experience differentiator for us. The functionality delivered by Ceridian goes a long way to supporting that message through better awareness of time sheet and pay calculations and better management of time-off requests,” says McCaffrey.

SaaS-based WFM In Practice
The WFM implementation at Petco presented a few key requirements due to the retailer’s unique business model. To ensure Petco generates accurate and timely paychecks for store employees, its time and attendance system accommodates the retailer’s commission-driven Pet Services (Grooming and Dog Training) staff and their pay structure. McCaffrey says the solution helps the company to appropriately address not only variable customer traffic demand, but also enforce animal care maintenance standards that align with the core philosophies of the Petco brand.

At Petco DCs, the company’s new time and attendance software integrates with a system that measures piece rate productivity by feeding time punch data into that data repository for standard employees. “Dayforce time and attendance with employee self-service accommodated those needs,” says McCaffrey. “Access to the hosted application simply requires Internet Explorer 9 with Silverlight. For time entry, we’re using a virtual time clock on HP Elitepad 900 tablets running Windows 8 at all 1,300+ of our stores. In DCs, we’re using the Dayforce Touch device with badge swipe verification.”

Measuring The Succ ess Of A WFM Implementation
While achieving and measuring a specific, tangible ROI wasn’t a goal at the outset of the project, McCaffrey says the software implementation was a success by any measure. “We’ve significantly improved our oversight and corporate-level visibility into store payroll. The centralized software application allows us to service the entire organization with one solution, as opposed to maintaining disparate systems among divisions,” he says. “We’ve ensured future scalability, including a viable hardware solution for time punch entry. And we have a vendor partner that adds value as a subject matter expert in interpretation and application of state-specific pay requirements.” By adopting software that’s continually updated for changing state and federal pay rules, Petco is also in an advantageous position to minimize future compliance risks.

Some of the most powerful benefits Petco has realized from its new WFM system come as a result of single-source, enterprisewide data visibility. “From an administrative standpoint, we have more robust tracking and retention of documentation related to time sheet edits and attendance points,” says McCaffrey. “We’ve increased organizational effectiveness through electronic workflow of time-off requests and visibility to schedule and timesheet for employees through their mobile device or home computer. With system-managed corporate policy enforcement, we’ve also improved adherence to our internal workforce policies and procedures.” And much to the Petco C-suite’s delight, McCaffrey and his implementation team completed the project within budget and on time, well before the start of the 2014 holiday shopping season.

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