In this blog we’ll look at:
- How retailers are currently managing the workforce
- What factors affect staff, staff schedules, and budgeting
- Why an activity-based approach is the best way to improve store operations and customer service
How to improve store operations
The retail industry is constantly evolving and there have been a lot of changes in terms of workforce demand, tools, and processes. As a retailer, when you see new innovations in the industry, it also brings in new challenges. In store-operations need to be at best to provide more customer satisfaction. One of the important aspects of retail operations is to understand and improve labor scheduling.
Studies have shown that introducing the lean concept to retail operations helps reduce operating costs by 15%. What is lean retailing, you ask? Lean retailing can be achieved by focusing on a more data-driven approach by understanding what your customer’s needs are and using that to have products sold at your store. Competition is on the rise and customers expect higher service quality. Focusing on labour scheduling and budgeting as a part of enhancing workforce management can boost productivity and in turn help retailers achieve operational excellence.
What Is The Current Workforce Management Scenario In Retail?
Creating accurate schedules and budgets for your staff can be complex and even experienced retailers in the industry see room for improvement. While commercial software and solutions can be useful in keeping a track of employee attendance and managing payroll, usually provide generic schedules that don’t take fluctuations in workload and store-specific factors into consideration. This results in high labour costs, inconsistent customer service, and unhappy customers.
Having better predictability on the skills and the number of employees needed at each store outlet on a day-to-day basis can be powerful insights for retailers. Why you ask? Because with this precise information, labour costs can be lowered.
Many have begun to realize that a data-driven approach is a way to go. By taking a close look at the store activities, some retail COOs have been able to improve customer satisfaction and save between 4-12% of operational costs.
What Challenges Do You Usually Face?
In order to create unique weekly staffing schedules, many retailers use workforce-management software. Workforce-management Softwares generate schedules based on revenue forecasts and assign more employees during days or hours when the sales projection is the highest. Although revenue is a good criterion for staff scheduling, it doesn’t provide sufficient insight because customers have different buying patterns on different days and hours. This is why there needs to be a more personalized approach to scheduling your in-store staff.
Most retailers also don’t have a system in place to account for the time taken to complete tasks in specific stores – like the distance an employee needs to cover to get to the storeroom or the number of elevators employees can use to carry products to the sales floor. There are often instances where the same tasks can take a different amount of time to be completed depending on individual factors, even if the different store locations bring in the same revenue.
Labour budgets are another thing that is not well-aligned with a store’s current reality. The usual way how many retailers allocate labour budgets is based on a certain percentage of sales. Store managers then provide their insights based on their experience and judgment for adjustments to be made. As this approach relies considerably on the store managers’ intuition, there are times when some stores are unfairly penalized. McKinsey’s findings show that this approach can lead up to 30% of differences in labour costs among stores
What Is The Solution To Better Operations or How to improve store operations?
As an innovative retailer, you should understand that off-the-shelf workforce management solutions will not work in the long-run. Work towards personalizing the shopping experience and realize that a similar activity-based approach can help revolutionize labour scheduling and budgeting. With an activity-based approach, you make a staff schedule based on changing workload. This way, the right employees will be doing the right tasks in the optimal time frame. This approach will also allow retailers to allocate more accurate labour budgets for each store. Four things every COO and head of operations need to have in place before using am activity-based approach to achieve operational excellence are:
- Workload Calculations: Store-specific estimates of how much time it takes to complete tasks taking predefined services and process standards into consideration
- Reliable Forecasts: Insights that can help enhance each store’s value and volume based on store-manager experience and regression models. The revenue generated in each department, hour, etc. can be a good example
- Flexible Workforce: Have staff that can adapt to changing schedules. Apart from full-time employees, you should also have sufficient part-time and temporary staff
- Powerful Performance: All the systems and process should have clear targets on productivity and service-level tasks so that you can ensure that all stores are informed and comply with the set plan
The pre-requisites mentioned can seem challenging but focusing on accurate workload calculations can help improve store operations.
Calculating Workloads Accurately
Having accurate workload calculations take each store’s uniqueness into consideration and sets an expectation for optimal performance. When you use an activity-based approach for staff scheduling, every store will have a standard time allotted to each task. To this, we add any additional time needed, based on individual store factors.
Setting a standard time for activities for all the stores in your network serves as a best-practice benchmark. Observing in-store activities can help in making any changes needed to individual locations. A detailed work schedule can be created by focusing on those tasks that take up the most workload.
Once a plan is developed, it can then be introduced into a task-management app designed for the deskless workforce working in each store. Routine operations can easily be scheduled to be completed by specific employees and departments at the right time and location with the help of Pazo. The easy-to-use interface allows every employee to complete the necessary activities at the optimal time, boosting productivity, reducing labour costs and ensuring that customer satisfaction and brand standards are consistently maintained in every store.
An activity-based approach is a good foundation for better staff scheduling and budgeting that can be improved with time. It will allow you to A/B test analyses in the event of changes in the process or service level standards. Having this new approach gives management teams accurate insights into store activities and will allow in having detailed and practical discussions when labour budgets or service-level targets.
- Focusing on labour scheduling and budgeting as a part of enhancing workforce management can boost productivity and in turn help retailers achieve operational excellence.
- Most traditional retailers face are not able to have the best productivity in their stores as generic workforce scheduling software mainly relies on revenue forecasts to create employee schedules. They also lack to account the time taken to complete tasks in specific stores
- Labour budgets are another thing that is not well-aligned with a store’s current reality. The usual way how many retailers allocate labour budgets is based on a certain percentage of sales. Store managers then provide their insights based on their experience and judgment for adjustments to be made.
- Having an activity-based approach on workforce scheduling not only helps in maintaining consistent in-store productivity and customer delight but also improves employee satisfaction and keeps labour costs under control.
Want to see how PAZO can make your routine operations better? Talk to our Client Success Officer today