Consultants have argued for decades that workforce management (WFM) is a mixture of art and science. However, the fact is, it is neither.
Workforce management ultimately comes down to profit and applying practical – not over-engineered — practices that enable higher performing retail operations. WFM is a series of processes that needs to be optimized: planning and forecasting business drivers; capturing work and customer demand in collaborative labor models; distributing labor spend with that demand; ensuring proper shift coverage; and optimizing the people and skills assignments. If you drill too deep in one area, the entire process will be missed without delivering value to the business.
Retailers that think of WFM as a scientific endeavor often employ engineering to meticulously capture and analyze hundreds of labor drivers and standards, yet never express anything in business terms. This over-engineered approach ignores the realities of selling and the perpetually dynamic nature of the retail business. Unfortunately, this approach loses sight of the complete end-to-end process of plan to schedule. In addition to taking an incredibly long time to deploy, business opportunities are missed, the market and operations change, and a nightmare of administration and maintenance is delivered to the business.
Compare the scientific WFM approach to that of a more practical, profit-oriented approach. These retailers choose to review time-task studies and labor standards against their business and then combine these standards into deployable performance policies. Instead of taking a hyper-detailed, lean manufacturing view of service, they use the labor standards to help inventory the work required and then aggregate to a meaningful, deployable labor model for their organization.
There are many benefits to applying a performance-based, profit-focused labor model. First and foremost, it provides greater overall business value in much less time while significantly improving WFM system performance and speed. It facilitates communication of critical information in terms that managers can understand, and avoids creating “decimal people” and the academic procrastination of determining what to do with the leftover seconds and minutes. It also preserves the intimacy of the business curves, mix, timing and volume of each location for every 15 minutes of every day throughout the year.
While the simpler, practical approach flies in the face of deep scientific reasoning, it produces better results. In a recent workshop with one of the largest global grocery retailers, we were able to show that by reducing the number of standards and drivers from over 350 down to 30, the business benefits were achievable much more quickly, and the team was able to deliver to the business on time and within budget. Contrary to the scientists’ beliefs; this more pragmatic business oriented approach delivered the same benefits to the business, quicker, and well within budget.
While the end-game is improved profit, it doesn’t mean losing sight of the human beings that make up your retail workforce. Employees perform certain activities to make up their work. These activities can be shared across departments and jobs and require a compliant, fair and predictable work schedule.
Instead of choosing the combo “science and art” approach to workforce management, the key to thrive in today’s retail environment is to focus on modeling the service levels that are part of your retail brand and commitment. Remove every form of over-engineering from the academic and apply a sanity check to the degree your labor model delivers profitability to the business.