Business Objects Solutions: Retail

Managing your labor force well could be your best opportunity for gain.

Many executives say, "Our greatest asset is our workforce." Many avoid adding, "Our worst return on assets comes from poor labor management." Both statements, however, are generally true.

With the help of business intelligence (BI), you can successfully institute labor management in four stages. The initial stages bring a fast payback on investments. The latter let you choose a balance between substantial labor cost savings or substantially improved customer service at no additional expense. Together, all stages generate a large and continuing return on investment (ROI).

In fact, according to an RIS News/Gartner Group retail research study in 2003, labor management represents one of the top three most consistently fast paybacks in retailing. Most retailers that have implemented labor management initiatives report paybacks in 12 months or less.

More importantly if you have a customer-focused strategy, labor management can improve your organization's customer service value proposition at little or no extra cost.

The Four Stages

1. Automate Time and Attendance
For many, payroll errors total over 1% of annual payroll. By automating collection of labor data for payroll, you can cut administrative costs and payroll errors for a fast payback while obtaining accurate records for later stages of labor management. The key is integrating time clocks in stores and distributions centers into a central data repository for processing and analysis by BI systems.

2. Employee Self-Service Human Resources
Another initiative, which delivers a consistently fast payback and high ROI, enables sales associates at stores, distribution centers, and offices to fill out their own electronic forms for human resources (HR) and engage in computer-based training.

By automating the administrative processes for hiring, benefits, training, skills monitoring, and termination, you can substantially reduce general HR administrative costs. More importantly, you can also free your store managers to spend more time helping customers and training associates to become more productive. It has also been proven that the more managers on the floor, the more your sales and labor productivity increase.

3. Optimize Labor Scheduling
Labor scheduling identifies when customer demand and other work for associates ebbs and surges, and then schedules staff accordingly. This process often increases customer service while reducing total labor expenditures.

With centralized BI, your managers can link up across the company - thus saving managerial time, cutting total ownership costs of IT, and enforcing consistent productivity standards across the enterprise.

4. Real-Time Productivity Alerts

Best-practice labor intelligence systems schedule staff according to a variety of workloads based on labor standards, not just peaks and valleys in point of sale (POS) transactions. Measuring labor only as a percentage of revenue hides where improvements will deliver high returns. That's why it's important to use productivity metrics based on labor standards for common tasks (e.g., time to receive a 10-carton delivery, time to process a $100 market basket, etc.). Such specific productivity metrics create a performance measurement mechanism that can help store managers decide where to focus their time to deliver the best return.

BI also delivers near-real time performance alerts whenever actual labor varies too much from productivity standards that allow for fast action to curb inefficient labor practices.

Labor Management

The Four Stages

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