Labor Management Checklist

Notice to Update: The Labor Management Checklist

Brian Monaco
Vice President of Retail Services

Every few months, I receive a notice to update the software on my smartphone. I make sure to prioritize those updates, uploading them as quickly as possible. Without a current operating system, my phone becomes useless. Labor management is similar. In this analogy, the cellphone symbolizes labor standards, while the update represents characteristics, frequencies, standard operating procedures (SOPs), volumes and more. The standards and their resultant workload output are only as good as the data driving them.

This blog is your notice to update, offering a labor management checklist with reminders for labor analysts, engineers and managers to ensure regularly updated labor data. It is not holistic, and might vary by operator, but the goal is to stimulate thinking. The first technology-based question on the checklist is: are you updating your volume driver data annually? If not, it may cause repeated adjustments to forecasts and earned hours each week. Yearly updates might center around a Pareto analysis, which ranks standards by most impactful to least.

Additionally, information technology (IT) is updated regularly across organizations and this can happen quickly throughout the year. Are you tracking how IT revisions affect labor standards? To keep the labor model accurate, labor engineers must understand how these technology changes affect standards, operations and sub-operations. Processing times within standards should be reviewed for correctness based on how system changes disturb daily work routines in stores.

Let us move from technology to operations on the checklist. Question three is: do you know the top five methods in each store department? A methods analysis can help alert operators to process updates needed in labor standards. The analysis can also help identify operations and sub-operations that lack value. The common business adage is what gets measured, gets managed. Taking that one step further, it is important in labor management to remember that what gets measured consistently can be managed effectively.

Fourth, where and how are your employees spending their time? This question is particularly important for specialty retailers, but also impactful for grocery and big box retailers. A tool used often by our engineers is called a utilization study. Engineers track associates across a variety of operations to understand what the labor force is doing. This provides opportunities for associate coaching, standards improvement, service examination and more.

Fifth and importantly, does your organization align SOPs with labor standards? Many companies create and manage SOPs in category management versus labor engineering departments. Creating close working relationships between the two departments can prevent mishaps. Before SOP changes are sent to stores, labor engineers can approve each document’s finality. Labor engineers can also review SOPs annually to ensure store expectations match up with store allocations.

As a retail manager, I remember issues between SOP changes and model management creating major labor impacts. If standard frequencies changed in the SOP, or if the SOP asked associates to move from daily activities to those less frequent, the time differences multiplied across instances and locations grew quickly. Additionally, if an operation or sub-operation is eliminated altogether, the economies of scale associated were significant. The result was misaligned budgets and performance.

In review, this blog asked five questions to remind labor analysts, engineers or managers how to keep labor models in tip-top shape. Those questions were:

  1. Technologically: are you updating your volume driver data annually?
  2. Technologically: are you tracking how IT revisions affect labor standards?
  3. Operationally: do you know the top five methods in each store department?
  4. Operationally: where and how are your employees spending their time?
  5. Operationally: does your organization align SOPs with standards?

As mentioned, this list is anything but exhaustive. The hope is it can ignite your process of intentionally inquiring about by your organization’s standards upkeep. Labor specialists can ask, measure and track data consistently to maintain the integrity of your labor model. Your bottom line, shareholders and customers will thank you for doing so!