By Steve Rowen, Managing Partner
3/17/2009
In late 2007, we conducted our second annual benchmark on the state of retail workforce management. Within, the 160 retailers who took the survey showed us some continuation of the previous year’s trends (shifting the workforce from a tactical to a strategic enabler of customer centricity), but also, that a major shift had occurred: the previous year, retail respondents were still focused on cost management of their workforce – trying to squeeze those last few payroll dollars out of the labor budget. Our 2008 report, instead, showed a shift away from cost management to an investment in customer service. In short, even as economic conditions were slowing down, retailers were putting employees back into the store (chart below).
From that report:
While labor costs have been increasing steadily, and part of the shift may be explained by simply having to pay more just to meet basic labor requirements, anecdotal evidence suggests that the shift is also driven by a shift in strategy. In previous years retailers spoke about taking labor costs out of the business. In the last year, there has been much more emphasis on putting labor back in stores. From Payless Shoes to Best Buy to Home Depot, retailers speak in terms of maximizing the effectiveness of labor, if not outright adding more employees – not cutting costs.
The challenge for retailers will be in deploying that increased payroll to ensure they reap the maximum benefit from their investment. As retailers invest payroll dollars, whether willingly or forced, the question – and the challenge – remains: will that investment pay off? How helpful are these employees? Are they well trained? Appropriately scheduled? Will they stay with you long enough to add value?
We’re now prepping to revisit the WFM topic in this year’s upcoming benchmark. But this time around, the topic of workforce management technologies has become particularly personal for us. Since our last report, some national “press coverage” has generated whole scale buzz by pitting workforce management solutions as heartless machines that don’t take into account the human dynamic, and are more likely to create competitive, rather than co-operative relationships among retail associates. This was namely generated by a September 10, 2008 article in the Wall Street Journal entitled Retailers Reprogram Workers In Efficiency Push. Within, the author formulated her opinion of WFM advancements primarily on the back of a handful of interviews with disgruntled ex-employees of one Ann Taylor store in Pennsylvania, and one in Ohio.
From that article: “Current and former employees of the Langhorne (Ann Taylor) store say that within months of the system's installation in May 2007, the culture shifted from collegial to highly competitive. ‘You could see people stealing sales from other people,’ says Julie Abrams, a former cashier at the store. Salespeople were ‘trying to get each other out of the way to get to the client,’ she says.”
Having worked as a journalist for a number of years, I feel fairly comfortable calling this article the result of some lazy investigative reporting, at best. Ex-employees are hardly a conduit into anything other than the reporter’s predetermined motive to cast the story’s subject in a negative light. What’s more, the author had every opportunity to present a compelling documentary at that time, having been given carte-blanche by a WFM solutions provider to the innermost workings of one of its retail clients. Sadly, the end result is clearly not an insightful look at WFM technologies’ impact on the store – and customer buying – experience, but instead, simply another piece of sensationalist media drek intended to raise eyebrows and sell papers.
As a result, we’d like to know what you think. Are you a retailer who has implemented workforce optimization technologies? If so, what has been your experience? This year’s WFM benchmark will be built around what you tell us – not in survey format – but in the actual words and sentiments (all done anonymously, of course) from what actual retailers tell us. We’re guessing that might have slightly more value than parting shots from an associate who was let go for being chronically late for work… or sleeping on the job… or, well, you get the point. Drop me a line with your take.
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