How Do Retailers Know If They Are Scheduling Their People Effectively?

Rick Schlenker
Co-Founder and EVP of Sales and Marketing

How do retailers know if they are scheduling their people effectively? In other words, are their employees working the right schedules to deliver exceptional customer service at the lowest possible cost?

From time to time, I am invited and have the pleasure of speaking with retail leaders about improving in-store efficiency and customer service. I often start these discussions by asking the leaders the following questions:

  1. “How important is delivering exceptional customer service inside your stores with the growing competition from convenient online shopping?”
  2. “Given that labor is the store manager’s single largest controllable expense, how do you determine and measure if your employees are being scheduled to perform the necessary work in the most cost-efficient manner?”
  3. “If you are currently using software to schedule your employees, how do you decide and measure if the schedules that have been produced by your software, edited by managers, and worked by your employees were effective at delivering great service at the best possible cost?”

To the first question, leaders most often answer that proving exceptional customer service is paramount to their company’s success. They often take pride in sharing that their stores give better customer service than competitors in their respective trade areas.

To the second question, leaders explain that they do their very best to ensure that labor expenses stay within budget (i.e., stay within the labor percent or sales per hour target as established by the company).

To the third question, leaders often respond that so long as labor budgets are met and customer satisfaction scores (i.e., mystery shops and telephone or comment card feedback) do not drop, they believe the schedules generated were effective.

After listening to the leaders’ answers, I ask them to consider other ways to measure scheduling effectiveness and efficiency in the future. I start by sharing my thoughts that the basis for a good employee schedule, assuming efficient work methods and best practices are already in place, is an accurate forecast that is translated into a good staffing plan. I encourage retailers to evaluate the accuracy of their forecasts, not on the basis of sales by week, but by items and customers by day and fifteen-minute increments (for service departments). If the forecast is not correct, I stress that the resulting staffing plan and schedules will also be incorrect.

Once forecasting at the item and customer level by day and time is correct, I share how important it is to measure and compare the effectiveness of system generated employee schedules to those edited by the store leaders, to the schedules that should have been worked. To decide what should have been worked, I recommend processing the actual items and customer transactions back through their forecasting and staffing systems. This process enables comparing the three different schedules for the same store, department and time period: system generated, store edited and the actual scheduling requirement. What I stress the most is that while the overall labor dollars may remain consistent across the three versions of schedules, what usually becomes clear is how vastly different the system generated, and actual required schedules differ at the fifteen-minute increment level to the schedules that were edited by their stores.

To wrap up our discussion, I ask the leaders to take the time to go back and evaluate the accuracy of their systems’ generated forecasts and their systems’ placement of the staffing compared to what was needed to deliver good service. If the systems generate good forecasts and schedules, then the last step is to ensure that the schedules the stores edit and publish for their employees to work align with the system generated versions. If not, then the goal of giving great customer service at the lowest cost is not achieved. The resulting poor in-store service and/or higher operating costs leave room for both online and other traditional retailers to steal away their customers.