For any retailer, labor management is a fundamental part of daily store operations, and should be treated as an important business strategy that requires creativity and insight. But overworked store managers and lack of data can turn employee scheduling into just one of many necessary tasks, resulting in repeated cookie-cutter schedules that aren’t optimized to produce the highest ROI. In turn, this creates a shocking number of labor hours that are worked during times with zero sales.
[See also: Workforce Management for Retail Victory]
Analysis of historical sales data compared with workforce schedules bears this out. One metric that we like to look at is “unproductive hours.” On average, companies that Shiftlab onboarded in 2020 had more than 50% of labor hours clocked during times with zero sales volume. Results from our clients ranged from 70% unproductive downtime to 30% for some companies that were super optimized.
Here are some solutions for reducing your low-productivity hours:
- Strategic, not cookie-cutter, scheduling: Generic nine-to-five shift types are not built for retail, where stores are open into the evening and there is a post-work-day customer rush. If your employees are just placing eight-hour shifts where they want to work, that won’t result optimally for the retailer. Instead of churning out the same workforce scheduling patterns, take a fresh look at what will work best for your store. The way to think about scheduling is to look at the data to understand your busy days and times and maximize coverage when you need it. For example, we see our best managers place shorter shifts on slow days—say, 9am to 3pm on a Tuesday, so that they can extend that employee’s coverage on a busy Friday or Saturday, 10am to 8pm.
- Optimizing store hours: As data people, we love analyzing detailed sales and traffic metrics and providing our customers with a calculated decision on their store hours. Looking at this information is essential, as it not only affects your labor’s productivity but also is the foundation for the shifts that you’re creating. For example, a store that is open from 9am to 8pm, often has staff shifts that are 9am to 5pm. But when you examine most stores’ sales patterns, you might see that 9am isn’t productive, and an associate leaving at 5pm is the worst time, as you are about to see a post-work-day rush of customers. A simple switch to opening at 10am would scoot those employee shifts to the right, providing you better coverage while likely reducing labor costs.
- Using the right employees: It’s not just about having coverage at the right times, but also having the right coverage. In the hospitality business, for example, switching out one bartender’s shift with another might not make a difference to drink sales. But in commission-based retail sectors, such as telecom, the sales associate who is on shift during high-sales hours can make a big difference. A powerful workforce management solution will enable you to schedule your top sales performer at the strategic times when they will make the biggest impact, so that you can get the best experience and the times that matter the most.
- Leveraging employee breaks: Break percentages are hard to calculate. Are your team members actually taking their allotted breaks, or are they just slipping out of the store an hour earlier each day? The retailers we work with typically have between 10% and 75% of shifts where breaks are being taken—a wide spread. Not only do breaks help optimize for slow times during the day, but they also stretch out your scheduling pattern to cover the hours that matter most. There's so much downtime in the middle of the day, if you can schedule your associate to take a lunch break at a strategic time instead of leaving early, then you don't negatively affect customer service and you get to keep that person in the store for longer, which is important for a lean retailer. Consider this: the difference in one store between 10% and 75% is nearly $10k of labor per store per year that could be eliminated or redistributed to busier times.
- Using an intelligent, flexible, data-driven scheduling tool: Too often, retail operators are compromising their workforce scheduling based on using a cumbersome tool that is not designed to be adaptable. It’s important to use a flexible system that's highly configurable, so that you can use the strategy that works for your specific store locations, and the tool simply executes this for you. This tool also needs to allow you to scale for the size of your retail operations without losing its adaptability, so even if you are a cruise-ship-sized retail organization, you can make strategic moves, like a jet ski. The right workforce management tool relies on data to thrive.
Especially in lean and specialty retail, the management of store operations and scheduling creates a major difference in your guest experience and your profit optimization. A couple of tweaks in any of the categories above naturally eliminates unproductive hours and ultimately gives your customers a much better experience.