Workforce Management Strategies to Drive Profitability

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Workforce Management Strategies to Drive Profitability

05/05/2009
Retailers of all sizes are tasked with navigating the inherent complexities of workforce management and striking a balance between reducing store operating budgets and a growing demand for a customer-centric shopping experience. Successful retailers are making workforce management a top corporate priority and eliminating their reliance on outdated, manual procedures that are disconnected from their store planning processes.

According to Gartner Research, with labor being the second-largest operational cost (after merchandise), retailers can achieve great benefits, over a longer period, through applications supporting the end-to-end workforce management processes. JDA Software recommends strategies for effective workforce management supported by advanced store operations solutions.

Optimize the Talent Pool: Matching employee skill level to store responsibilities or departments is even more critical in today's competitive retail landscape. However, decreases in store operating budgets have led to staff reductions, meaning retailers have to do more with fewer employees. Workforce management solutions that factor in all of the traditional staffing constraints (e.g. qualifications, availability) plus business variables such as localized consumer demand, fixed and variable daily tasks, and store traffic patterns can ensure an accurate forecast of holistic staffing requirements. When combined with enterprise-wide, real-time visibility that allows for a regional talent pool to be shared across locations, an advanced workforce management solution can ensure the right employees are at the right place at the right time.

Spend Less Time Scheduling, More Time Managing and Selling: With advanced solutions that maximize the productivity of store employees, leading retailers have realized that turning to optimized workforce management solutions can improve operational performance and increase profitability. By using schedules which are automatically generated based on forecasted staffing requirements, store managers can be freed from the laborious task of building schedules from the ground up, and instead make minor changes to the system-generated schedule as needed, cutting the human effort by 50 percent or more. This frees up store managers to focus on driving sales and enhancing customer service. Through systematic alerts, the manager can act fast on impending overtime, under-staffing and other key performance indicators that might negatively impact operations, service or labor costs.

Match Staffing to Real Demand: Advanced workforce management solutions that are based on forecasted demand can drive sales results. Retailers are able to more accurately forecast and build staffing levels based on expected sales and traffic patterns in the store. By scheduling the right number of people at the right time in the right departments, retailers can ensure that customers will be served by the most knowledgeable associates. However, even the best forecast can be rendered inaccurate by unforeseen events such as extreme weather conditions. With the ability to adjust forecasts with up-to-the-minute trends and the anticipated impact of situations, staffing can be increased or cut back accordingly.

Improve Customer-Centricity: Most consumers have had the unfortunate shopping experience of either being ignored by sales staff, or not being able to find a salesperson for assistance. Retailers know brand loyalty is fragile. Those that can't capitalize on customer-specific data and provide the right mix of product and supporting staff not only risk losing the sale, but also risk losing brand loyalty with shopper defections that can have a greater negative impact on sales. Intelligent workforce management solutions can deliver a finely tuned and customer-centric workforce plan to improve brand loyalty that will last long after the recovery of a challenging economy.

Deliver Tangible ROI: Retailers large and small are under pressure to protect margins and improve operating efficiencies to offset falling sales. As a result, workforce management has become a critical area of focus. By implementing workforce management technology into its operations, one family-operated, Midwest grocery chain gained the ability to better forecast staffing needs for its 13 store locations based on actual sales data collected from its POS system to achieve a 30-percent reduction in scheduling time. This further enabled this grocery retailer to establish a minimum-hours policy for weeks that have been historically slow to effectively reduce labor costs by 10-15 percent. Even by simply implementing traditional template-based scheduling with integrated time and attendance, an outdoor lifestyle retailer realized a 25-percent savings in overtime dollars. Solutions that can yield short-term ROI without the burden or risk of lengthy implementation timelines will prove indispensable.

Retailers that embrace and implement advanced workforce management solutions clearly see the results with elevated productivity, reduced labor costs, improved sales, and increased consumer and associate satisfaction. As economic pressures continue to rise, retailers that adopt automated workforce management solutions with intelligent forecasting capabilities will be poised to capture market-share during difficult economic conditions and lead the charge when conditions improve.