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Dave Foxall Top Labor Management Software Trends for Retail Optimization

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 By Dave Foxall

Optimizing Retail Operations via Labor Management Technology

Warehouse labor management software packages (as well as contact centers) deal with time and attendance, scheduling, task management, monitoring of indirect time, and even performance coaching for large, often single-site workforces. In the retail sector, these same functions may be performed by labor software with a surface similarity, but the functions must operate at store level; typically with much smaller groups of employees (comparatively) and managers that operate with a much greater degree of local autonomy. These solutions allow store and regional managers to factor in staff availability, capacity, and budget constraints to automated labor planning and scheduling—a process that can yield maximum store efficiency while at the same time maintaining required statutory compliance.

Despite these broad advantages, the adoption of labor management software for retail operations has remained low. Indeed, as the Gartner Hype Cycle for Retail Technologies notes, "The ability to automate and electronically deliver an optimized, integrated timekeeping and scheduling solution is not something all retailers have adopted". In fact, further referencing Gartner's Hype Cycle, retail time and labor optimization technologies have been in the "trough" stage of Gartner's report since 2007. Recent changes within the labor management software space though are driving renewed interest from organizations; and vendors are beginning to offer labor management application functionalities that up until now have largely been reserved for other industries. These newer feature sets have the capability to up-end the retail labor management software establishment, and tap into 2 major trends that the broader business software environment is experiencing; mobile access and cloud deployment. Here, we review these trends further.

Labor Management Software Optimization Trend #1: Mobile Access

As it is with other enterprise applications, the trend towards a more mobile workforce has caught on within the labor management software optimization market as well. In fact, a 2012 Aberdeen Group study, HCM Trends, found that 37% of organizations the company terms "Best-in-Class", use mobile technology for scheduling/timesheets, task assignment/management, and making/approving time off requests. Of significance for retail operations is that the study also noted that a critical driver in the retail sector is to, "keep mangers with the customers and employees… [and] helping to streamline interactions with workforce issues and processes by pushing them to a mobile device makes good sense for these on-the-go managers".

Additional research, from IDC's Retail Insights report (Mobile Technology: Transforming Workforce Management), takes these claims even further; citing that mobile applications are the future of flexible labor optimization. The reason behind this, according to IDC, is that mobile labor management software drives a cyclical benefits process. More specifically:

  • First, this optimization leads to an increase in satisfaction because employees feel much more empowered—and thusly more inclined to want to participate in the retailer's success. In turn, the employer becomes an employer of choice, and the virtuous cycle begins — a good business reputation for treating employees well leads to an improved applicant pool, which in turn results in better employees, better customer service, and higher customer retention rates.
  • Second, productivity improves because communication between management and staff can be automated and is nearly instantaneous. Managers can complete day-to-day workforce management tasks from virtually anywhere — the store sales floor, back room, office, checkout area, and even when standing in line at the grocery store.
  • Third, workforce compliance improves. Responsibilities are typically merchant first and employer second, and they certainly aren't always experts in all of the legalese of state, federal, and union rules. Leveraging mobile technology to attend to the details of workforce management frees managers from the burden of having to try and manage compliance risks. Mobile access to information related to compliance ensures that even retailer-imposed rules can be managed remotely.

Labor Management Software Optimization Trend #2: Cloud Deployment

In addition to the trend for mobility, like countless other businesses, retail organizations are focused on reducing overhead expenditures thanks in large part to the current economic environment. However, the razor-thin margins that most retail businesses operate under have created a veritable business imperative for cost reduction. IDC's recent research report, Improving Productivity in Retail with Workforce Cloud Services, suggests that this drive to save will be seen most dramatically in a reduction in IT expenditure; noting that (over the next 12 months), up to 50% of respondents are expecting to invest in SaaS (software-as-a-service) solutions for cost reasons. This trend is significant on several levels, but most notably because SaaS labor management software offers benefits such as:

  • The ability to avoid a lengthy procurement process for hardware and software.
  • Service-level agreements that guarantee system uptime (usually in the region of 99%).
  • Functionality which minimizes compliance risk by outsourcing the management of software and hardware revisions as well as required legislative updates (a particularly useful element for labor management applications).

IDC's research also noted that several labor management SaaS solutions deliver the added benefit of providing users with mobile solutions (including some explicitly-designed mobile applications) accessible via smartphones, tablets and other devices.

The Retail Labor Optimization Bottom Line

With minority adoption, even among "Best-in-Class" organizations, labor management software solutions that are focused on the retail sector offer an under-utilized source to improve workforce effectiveness and efficiency. As such, Gartner's advice to retailers seems more than appropriate to share. "Evaluate your end-to-end, store-level labor management process, and consider the business benefits to be gained by deploying a single vendor's web-based T&L management solution", says the research firm. After all, we're in a time when every competitive edge needs to be leveraged. End

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A critical driver in the retail sector is to, "keep mangers with the customers and employees… [and] helping to streamline interactions with workforce issues and processes by pushing them to a mobile device makes good sense for these on-the-go managers."


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