“Speed-to-value” is a saying heard in many circles. The phrase is never truer than today in the retail workforce management (WFM) space. With retailers scrambling for small chunks of profit margin, all the while trying to walk the customer service tightrope, today is filled with the charge to obtain high value for every dollar spent - and as quickly as possible.

When it comes to gaining store labor efficiencies through process improvements and accurate labor forecasting / scheduling, there are a few common approaches seen throughout the retail vertical. Using the ole faithful sales per labor hour (SPLH) method has been around for eons and provides some retailers with the simplicity and comfort they are familiar with on a day-to-day basis. After all, retailers indeed know their sales, just as they know that ole Joe across town runs a darn good store operation. So, what could be better than basing every store’s operational metrics upon Joe’s own labor hour performance compared to his sales?

The answer, of course, is that an activity-based workforce management system provides a more accurate view of the real day-to-day labor demand for each individual store across the chain. Joe may indeed run a fantastic store, but he also does not have to deal with some of the significant process, equipment, facility, item mix, customer demographic, or store location nuances that other store managers in the company are forced to handle. Then, there is the financial quandary inherent with SPLH. Why would a retailer want to subject his accuracy in forecasting labor need to inflation and/or deflation brought about by a SPLH approach?

Dig into the details
OK, you say, but wherein lies the value in such a system? They aren’t exactly free and sometimes require a lengthy investment of time and resources. With today’s web-based
WFM systems, the value (and the profit) lies in the details. A thorough bottom-to-top analysis of the operation, the associates’ availability and roles, and accurate data inputs provide a “can’t miss” opportunity to improve both the store’s operational performance and its level of customer service.

To get the most value for such an undertaking, all of these significant details must be studied and questioned. When it comes to store labor, which, by the way, is the highest controllable expense for most retailers, they all know how much they spend on labor, but only a few know how much they should be spending on labor! That’s where the activity-based WFM system and its in-grown benefits come into play. These systems need good data in order to provide the value promised. Store data, obtainable from POS systems, receiving/shipping invoices, pricing and pharmacy systems, etc., provide one of the three key data inputs. HR and payroll systems provide the associate data, which is the second. Finally, the third data set is provided through accurate activity-based labor standards and customer service labor requirements.

By far, a more accurate labor predictor than SPLH, labor standards have been embraced by 19 of the Top 30 US retailers (63%). Not only do they provide an expected, reasonable time per task, but they foster new ways of thinking, since analyzing the details of an operation identifies many forms of waste.