Effective Scheduling Can Decrease Overtime and Labor Costs

Retail Cross-Utilization From Wall to Wall: How an Effective Scheduling Solution Can Decrease Overtime and Labor Costs

Julie Bushee
Retail Labor Support Manager

Last week we examined some of the reasons retailers end up with overtime hours and explored how understanding the many impacts of overtime, and company policy or lack thereof, all represent critical first steps in gaining control over this important area. All the best budgeting plans and forecasting labor solutions can’t keep your labor costs in line if overtime is scheduled as a regular occurrence.

If payroll is a controllable expense, then routinely paying a higher wage for overtime hours adds insult to injury. Costs quickly add up as the Fair Labor Standards Act (FLSA) requires overtime pay to be at least one and one-half times an employee’s regular rate of pay after 40 hours of work in a workweek. Thankfully, scheduling solutions have experienced significant advancements over the last decade, specifically in storewide and even cross-store, “wall-to-wall” automated scheduling. Gone are the days where managers need to manually schedule employees, blind to the benefits of cross-utilization, cross-training, or placement of labor. As we discussed in last week’s post, there are many reasons why a manager may manually schedule overtime. However, as retailers have shifted to automated scheduling solutions, their ability to strategically omit scheduled overtime is just one of many benefits.

Today, we will outline some of the key ways an effective automated scheduling solution can cut out scheduled overtime and help reduce overall labor costs. Below are some examples of how retailers are getting a grip on labor by investing in automated scheduling.

Cross-utilization of employees

Are your managers still writing schedules manually? Do they only have the ability to schedule the employees assigned to their department, without visibility into cross-trained employees and their effective availabilities? Imagine a wall-to-wall scheduling solution that is set up to know what tasks every employee is trained to do in the store, regardless of primary department. Now imagine that your scheduling system is also intuitive to all those employees’ effective and preferred availabilities. Allowing those same employees to be cross-utilized (i.e., cross-scheduled) across the entire store is a win-win.

Automated scheduling should look at the entire store and forecasted hours by labor assignments, and schedule employees according to the needs of each department within the employees’ availability. Once the scheduling system is configured to understand priority, skill sets and qualifications, there is no need to limit flexibility by manually scheduling each department separately. The amazing result is that overtime can be greatly reduced or even non-existent when looking at the store as a whole and not focusing on the needs of one department or area with set employees. Additionally, sharing of labor between cross-trained employees not only makes sense but can increase morale and strengthen the organization as well.

Systematic scheduling constraints

Scheduling constraints help the retailer manage any number of scheduling items by treating them as violations during the scheduling process. In the case of limiting or prohibiting overtime hours, your scheduling software will allow you to set values in which the system or user will not be able to violate. Scheduling items such as maximum hours per day or maximum hours per week can be set at the employee level. Even though there have been advancements in employee portals with how they can swap shifts or bid on available shifts, etc. these same scheduling constraints can be used to prevent the employees from bidding or accepting shifts that would create overtime hours. So even after schedules have been submitted and as post-scheduling edits occur, your scheduling solution ensures that you retain control over overtime.

Effective reporting

We touched on this last week, but to reiterate, it is important that if and when overtime is scheduled, you have visibility into details such as who is scheduled for overtime, which department, what day or time of day, etc. Trend reports for retailers using wall-to-wall scheduling will offer the transparency you need to better understand where the focus should be. To be most effective, it is critical that reporting spans to all four walls of your store. As was mentioned above with the benefits of cross-utilization of employees across a store, once you are aware of which areas are scheduling overtime, you can quickly assess the reasons and review other areas of the store that can help alleviate the need for overtime. For example, if lack of employees to cover the forecasted labor hours is an issue in one department, look at other departments that are overstaffed and make arrangements to cross-train and move them into the understaffed department.

In summary

As you kick off the new year and assess your organization, think about whether you have set yourself up with the advancements necessary in labor scheduling. If controlling your labor costs is important to you and reducing or omitting overtime pay is a viable option, please consider reviewing your current scheduling solution. Does it cover your labor-control needs? Can it manage the examples explained above? If not, maybe 2020 is the year you take your business into the next decade with the technological sophistication and unparalleled performance that wall-to-wall automated scheduling has to offer.