By Rochelle Schard, Director, Product Marketing, Infor WFM Workbrain
Most large retailers have automated their time and attendance solution either through a point of sale application or time capture solution. But what is next? How can retailers go beyond time and attendance to increase profitability? This article explores what retailers need to do next and how to drive profitability by optimising workforce management initiatives.
True workforce management is an end to end process that combines an organisation's business processes, a third party's mandatory rules (government, union, vendor, etc) and the stockholder's desire to drive a profit. Looking at the individual components of a truly optimal workforce management solution, there are 5 main components:
- Labour demand planning
- Time & attendance
- Activity or task management
- Performance or operational management.
None of these are easy to master or quick to conquer without sophisticated, integrated and most importantly, automated systems. Why? Organisations depend on sophisticated workforce management solutions to manage the intricate balance of workforce supply and customer demand.
Maintaining this balance requires dexterous daily operations. Agile employee scheduling, time and attendance, and analytical insight enable retailers to optimise their workforces, and make adjustments in response to internal and external changes. Yet the most efficient execution of these day-of-operations workforce processes can be wasted if upstream activities such as labour budgeting and planning are inadequate.
Think about it, budgeting and forecasting are done on an annual and/or quarterly basis from a corporate perspective while labour management is driven at the store level on a weekly and daily basis. How is the manager to know the impact of their day-to-day decisions if they can't see instantaneous results to the budget?
Understanding the Labour Budgeting and Planning Process
Labour budgeting and planning activities encompass the annual budget creation, edit, and approval process, as well as periodic budget and forecast adjustments throughout the year. Historically, organisations have approached these processes with disparate planning systems or spreadsheet-based analyses that produced silos of stale, incomplete information. Often lacking synchronised comparisons of plans, actuals, and forecasts over time, this approach provides no meaningful integration with day-to-day store operations and reporting systems. Lack of clear direction and realistic assumptions up front causes considerable rework. And the dependency on spreadsheets bogs down an already laborious process.
Because planning is done in standalone systems, change in one plan is not reflected in others.
Disconnected systems produce unreliable estimates and lack of confidence in and adherence to budget numbers at the store level. The lack of integration with weekly scheduling processes results in irrelevant budget and forecast numbers ineffective governors for day-to-day business unit operations.
Not only are manual budgeting and forecasting processes slow, costly, and inaccurate, the aggregation and synchronisation of data and edits is error-prone and requires lengthy and costly approval cycles. As a result, companies have routinely devoted substantial amounts of money and time to producing annual budgets and periodic forecasts.
Historically retailers started with implementing time and attendance functions because of the immediate improvement in payroll accuracy and overall payroll savings. Next, optimised scheduling followed to attempt improving profitability by having the right number of people on the store floor based on historical figures.
Retailers can't stop here. The focus is turning to automating and integrating the budgeting process to combine with traffic and customer demand.
Making the right decisions on how to constrain labour costs are crucial to proper customer coverage and conversion rates. Optimisation of long-term labour supply processes accounts for labour costs and the desired labour pool makeup while integrating with operational scheduling. Adopting these principles enables leading retailers to reduce operational inefficiencies and improve profitability by:
- Reducing spreadsheet aggregation errors
- Embedding corporate goals in operational processes
- Increasing the accuracy of labour forecasts
- Increasing predictability
- Fostering a sense of shared purpose and buy-in
- Building an ideal workforce that optimally services customer demand
Planning, including budgeting and forecasting, integrated with scheduling that is supported by a compliant-based time and attendance system is the new standard for retailers.