April 24, 2009
RSR Study: Cultural Challenges Outpace Technology for Retail Workforce Management Implementations
By Tom Ryan
According to a new RSR
Research report, retailers recognize that workforce automation requires
much more focus on change management than typical retail technology implementations.
But the report finds that such automation is more important than ever as
store employees are being asked to do more than ever in the downturn.
The report, "The
Human Side of Workforce Management: Retail Best Practices," sponsored
by RedPrairie, notes that retail executives, store managers, employees,
and even the public at large have long been wary of efforts to automate
workforce management. Obstacles have run from current and former employees
complaining to the press about losing hours, to cynical consumers expecting
a reduction in service, even to resistance from store managers who see
a reduction in responsibility and control.
However, automation has become
even more critical to retailers not only due to the pressures on labor
hours as a result of sales shortfalls, but also because of the rise in
cross-channel shopping and an increase in non-sales work demands on
store employees.
"Retailers are facing
a big squeeze when it comes to their workforce right now," said Nikki
Baird, managing partner at RSR and co-author of the report, in a statement. "They
have to provide superior customer service to keep the customers they have,
but with store traffic down heavily, they simply can’t justify the labor
expense of business as usual. Winning retailers recognize that they
need automation tools to keep up, but they also recognize that this is
employees’ lives and livelihoods they’re dealing with, and they need to
manage this kind of change much more carefully than with, say, a merchandising
implementation."
The report features case
studies based on conversations with executives at four U.S.-based retailers
from across retail verticals. Among
the recommendations:
- Create
an information‐asset roadmap
in advance before tackling a WFM automation upgrade; - Don’t rely on one communication
program; - Make sure your executive sponsor
is a "front-line person"; - Get front-line ownership of
labor standards; - Fully utilize task management.
"We wanted to highlight
the best practices that retailers have found for making sure that workforce
automation implementations are successful, not just from a technical point
of view, but from a cultural point of view," said Steve Rowen, managing
partner of RSR and co-author of the report. "We specifically wanted
to highlight that it is possible to meet a retailer’s labor budget needs
while still serving front-line employees well, and what it takes to make
that happen."
Discussion Question:
What do you think has been holding back workforce automation at retail? What
are the best practices to ensure an optimal workforce at a time when
the labor budget has never been under more pressure?
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Discussion Questions
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Customer service is not dependent on automation. Customers have enjoyed great customer service without tremendous leaps in automation for years. Great customer service starts with an incredible store presence, then carries into product positioning (including no OOS, shelf placement, price and the entire category management from selection to promotions). Getting what they want, when they want it, without having to ask for it, is what great customer service is all about. Businesses that understand this dynamic focus on these deliverables as their core competency and build their business around this.
Customer service depends upon having the right interaction with consumers and much of that interaction is personal. Automation may free employees from tasks that keep them from spending time with consumers. However, that approach is a significant organizational change.
In addition to making a significant investment in the technology and its installation, successful use of the technology depends upon a tremendous amount of communication before, during, and after the installation of the technology. That is also expensive.
If the aim of installing technology is only to eliminate the cost of employee wages, the switch is not likely to be successful. While costs are saved, without the significant expenditure in training and communication and the use of employees to provide consumer interaction, the negative publicity and loss of goodwill is likely to decrease sales, thereby eliminating the cost saving.
My first experience with automating scheduling met with real pushback from the employees who had to do the schedules. Scheduling used to be an “art” which the bookkeeper did at home on her kitchen table over the previous weekend. She knew everyone’s preferences and what they were capable of doing besides their primary assignment. Now we introduced this scheduling system that could only be run from the office computer, had to have everyone’s preferences pre-recorded, could not handle mid-week adjustments, and had no way to acknowledge schedule tradeoffs. No wonder it did not receive great acceptance.
No technology can adequately address the human issues associated with WFM. Just as any tool depends on the skills of the operator, the WFM tool must be combined with the interpersonal skills of a supervisor who can implement efficiencies while maintaining employee enthusiasm.
The implementation of technology to help manage the front line workforce has been almost impossible to sell and implement for several reasons:
1. It requires buy-in for 3 different groups, HR, operations, and IT.
2. The problem is perceived to be owned by HR.
3. HR in most cases has NO power and NO budget.
3. This is not really an HR pain, it is only an HR problem. The pain belongs to operations.
4. The pain is not felt at the corporate level because staffing is a local store level problem.
Now that the pain is being felt on at a higher level, you are going to see more implementation of Workforce Management Systems.
Automated scheduling is no silver bullet. I know of a large grocer in Texas that has gone through installing and subsequently ripping out multiple scheduling applications over the past 15 years. The primary driver for installing labor scheduling software is to reduce labor expense. However, the retailers hoping to achieve an “automatic” expense decrease are disappointed when the reality of the employees manually adjusting the application-generated schedule sets in.
Since expense reduction efforts generally target the less tangible ROI areas, including customer service, automated scheduling is even more susceptible to extract those hours. Issues like those mentioned by the other in earlier posts also contribute to the ineffectiveness of automated schedulers.
If the human side of labor scheduling is addressed proactively and continued throughout implementation and revisited periodically, the likelihood of long-term success will increase.
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Customer service is not dependent on automation. Customers have enjoyed great customer service without tremendous leaps in automation for years. Great customer service starts with an incredible store presence, then carries into product positioning (including no OOS, shelf placement, price and the entire category management from selection to promotions). Getting what they want, when they want it, without having to ask for it, is what great customer service is all about. Businesses that understand this dynamic focus on these deliverables as their core competency and build their business around this.
Customer service depends upon having the right interaction with consumers and much of that interaction is personal. Automation may free employees from tasks that keep them from spending time with consumers. However, that approach is a significant organizational change.
In addition to making a significant investment in the technology and its installation, successful use of the technology depends upon a tremendous amount of communication before, during, and after the installation of the technology. That is also expensive.
If the aim of installing technology is only to eliminate the cost of employee wages, the switch is not likely to be successful. While costs are saved, without the significant expenditure in training and communication and the use of employees to provide consumer interaction, the negative publicity and loss of goodwill is likely to decrease sales, thereby eliminating the cost saving.
My first experience with automating scheduling met with real pushback from the employees who had to do the schedules. Scheduling used to be an “art” which the bookkeeper did at home on her kitchen table over the previous weekend. She knew everyone’s preferences and what they were capable of doing besides their primary assignment. Now we introduced this scheduling system that could only be run from the office computer, had to have everyone’s preferences pre-recorded, could not handle mid-week adjustments, and had no way to acknowledge schedule tradeoffs. No wonder it did not receive great acceptance.
No technology can adequately address the human issues associated with WFM. Just as any tool depends on the skills of the operator, the WFM tool must be combined with the interpersonal skills of a supervisor who can implement efficiencies while maintaining employee enthusiasm.
The implementation of technology to help manage the front line workforce has been almost impossible to sell and implement for several reasons:
1. It requires buy-in for 3 different groups, HR, operations, and IT.
2. The problem is perceived to be owned by HR.
3. HR in most cases has NO power and NO budget.
3. This is not really an HR pain, it is only an HR problem. The pain belongs to operations.
4. The pain is not felt at the corporate level because staffing is a local store level problem.
Now that the pain is being felt on at a higher level, you are going to see more implementation of Workforce Management Systems.
Automated scheduling is no silver bullet. I know of a large grocer in Texas that has gone through installing and subsequently ripping out multiple scheduling applications over the past 15 years. The primary driver for installing labor scheduling software is to reduce labor expense. However, the retailers hoping to achieve an “automatic” expense decrease are disappointed when the reality of the employees manually adjusting the application-generated schedule sets in.
Since expense reduction efforts generally target the less tangible ROI areas, including customer service, automated scheduling is even more susceptible to extract those hours. Issues like those mentioned by the other in earlier posts also contribute to the ineffectiveness of automated schedulers.
If the human side of labor scheduling is addressed proactively and continued throughout implementation and revisited periodically, the likelihood of long-term success will increase.