Magazine Article | April 19, 2006

Workforce Management Should Improve Store Performance

Source: Innovative Retail Technologies

There’s an inextricable link between WFM (workforce management) and store performance. Are your WFM activities paying dividends?
There’s an inextricable link between WFM (workforce management) and store performance. Are your WFM activities paying dividends?

Integrated Solutions For Retailers, May 2006

At this year’s NRF show, I had the opportunity to moderate a panel on workforce management featuring workforce management vendor Workbrain’s Senior Director John Orr, Aberdeen Group’s Director of Retail Research Paula Rosenblum, and Canadian fashion retailer Holt Renfrew’s Director of IT Anne Hodkin. Following is what they had to say, with bonus commentary from Nancy Gaughan, director of marketing with time and attendance vendor Synel Industries.

What’s your definition of store performance as it relates to WFM?

Rosenblum: Store performance management is field adherence to corporate goals and directions. In essence, store performance is delivering on the retailer’s brand promise.  Workforce management helps insure the right worker is in the right place at the right time to deliver on that corporate promise.

Orr: Store performance is the resulting benefit associated with optimizing people, time, activities, and information to improve profitability through the reduction in labor as a percentage of sales.

Hodkin: It really comes down to aligning long-term workforce planning with daily operations, not necessarily to reduce labor costs, but to align our staff to customer needs, which ultimately could drive revenue. Our other motivation was to enhance operational efficiency and increase transparency to our employees.

Describe the benefits of a WFM implementation to employees and store performance.

Rosenblum: Data has shown that a WFM implementation frees up store managers from administrative tasks. Bringing a store manager back onto the selling floor can drive topline sales growth, as he or she has more time to serve customers, manage and mentor employees, and ensure that the store is clean, set up, or recovered appropriately after a sales rush. Providing employees the opportunity to view their own schedules and know that their scheduling constraints are being met can be a motivator.

Orr: WFM provides for many areas of improvement. Some return on investment is realized through automation of laborious and manual processes, improved visibility and coverage of the business needs, sharing of real-time information for proactive and actionable intelligence, forms automation and paperless environment, streamlining and reengineering of processes, best practices and performance measurement, etc.

More specifically, when we take a look at operating income margin and profitability of most retailers as compared to their top competitors, we find that from a profitability standpoint, we can help them move closer to the benchmark.

Customer satisfaction depends upon the customer experience relative to the expectations that the retailer has set. In fact, a retailer’s number one goal is to provide consistently outstanding service and value to its customers – while meeting their needs and making their overall shopping experience as easy as possible. The keys to customer service and how WFM affects them are as follows:

  •  Assurance – WFM and skills management can ensure that the right employee with the right knowledge and courtesy is available to service forecasted customer traffic, thereby conveying and reinforcing trust.

  •  Empathy – Through improved communication with and between the employee and the company, many retailers have found that WFM helps in the retention and motivation of employees – they do not get lost in the numbers and a better work-life balance is achieved. When employees feel appreciated and cared for by the retail company, they will extend that provision of caring and individualized attention to your customers and will stay employees longer.n Reliability – Leveraging workload demand, schedule coverage solutions, and alert mechanisms, retailers better equip the operation to manage call-in and call-off situations and ensure that the most effective and efficient coverage is available. In doing so, the customers will see that the retailer is committed and able to perform the promised service dependably and accurately.n Responsiveness – It is a fact that scheduling management and staff on the right days of the week and times of the day improves conversion and average dollar per transaction. Through improved forecasting and knowledge of workload needs by skill, we can ensure that the proper coverage is available, making for an easy and enjoyable customer experience.

  • Tangibles – In addition to being the easiest retailer for customers to use and patronize, it is extremely important to ensure the appearance of the physical facilities, equipment, and personnel are superior or at least exceed customer expectations. It’s important to consider a workforce management solution that not only incorporates service-driven workload requirements and ensures they are covered with the right people and skills, but also provides for nonservice workload budgets and needs such as cleaning, maintenance, point-of-purchase displays, restock, etc. Systems that only consider service-driven requirements typically underestimate the work and coverage required to maintain superior tangible quality.

Hodkin: The accountability and transparency to the staff are key benefits of workforce management software. We are very open with the staff on how we manage things, and it also helps with the accuracy and efficiency of payroll. Another key benefit is actually scheduling the people we need in the store at the times we need them the most. Effective sales floor coverage means that our customers are getting the attention they desire. Thorough customer service translates into a direct impact on our bottom line.

Gaughan: On a very basic level, WFM systems eliminate the errors and inaccuracies associated with manual data entry by tracking employee time and labor activities through data collection terminals. Employees recognize that an automated system ensures that they are paid fairly and accurately, but it can also provide them with a sense of involvement in the process, particularly with touch screen kiosk terminals that enable ESS (employee self-service). In turn, by reducing the time spent by managers responding to employees’ requests about scheduling, etc., ESS enables managers to spend more time on duties that positively impact store performance.

As retailers strive to differentiate themselves to remain competitive, why should they focus on WFM?
Rosenblum: Again, WFM helps a retailer deliver on its brand promise. As a significant piece of store performance management, WFM helps drive topline growth, labor cost containment, and efficient use of in-store resources.

Orr: When considering all enterprise solutions (supply chain, merchandising, ERP [enterprise resource planning], etc.), a total WFM solution delivers the highest rate of return, in a shorter amount of time, with the lowest risk. Total WFM provides the control and visibility required to improve and transform operations to be more customer-centric by optimizing the skills, talents, and costs of employees (which represent the largest share of costs). Although cost reduction and streamlining are still opportunities, reducing the administrative time spent on high-volume and low-value work can provide more customer face time and focus.

Hodkin: As the retail market becomes increasingly competitive, the ability to leverage IT to accelerate business processes provides key differentiation in your ability to address customer needs. Workforce management provides an excellent starting point for retailers to leverage IT to streamline operations and improve customer service.