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Industry Insights    |   

The Federal Court decided, for the second time in two years, that an employee of Workpac was entitled to paid leave even though Workpac had classified the employee as a casual. The case doesn\'t mean that all casual employees are automatically entitled to the same leave benefits as permanent employees. However, you do need to understand the decision to avoid the same traps as Workpac. What does the Fair Work Act say? Under the Fair Work Act, casual employees aren\'t entitled to some benefits of permanent full-time or part-time employment (e.g. annual leave, sick leave, carer\'s leave). The problem is that the Act doesn’t define when someone will be a casual employee. In the recent Workpac decision, the Federal Court had to interpret what the Act means by the term “casual employee”. Hasn’t the Fair Work Commission decided this already? Under virtually all modern awards, and many enterprise agreements, a casual employee is anyone \"engaged and paid as such,\" or some similar phrase. This expression has resulted in many employers reasonably thinking that an employee is a casual, and so not entitled to paid leave, if they are paid a casual loading and clearly engaged as a casual worker. However, the Federal Court had already decided in an earlier case involving Workpac that an employee was not a casual employee under the Act just because they are a casual employee under a modern award or enterprise agreement. When is someone a casual employee under the Act then? This is still pretty murky, just like the distinction between independent contractors and employees.  The Federal Court set out a list of imprecise factors that they use to help guide their decision. The closest a judge came to a definition of casual employee under the Act is \"an employee who has no firm advance commitment from her or his employer to continuing and indefinite work according to an agreed pattern of work\". In the Workpac case, the employee was not a casual employee under the Act because: his contracts said he was a casual employee, but also guaranteed (for both his and Workpac\'s benefit) that he would turn up to work 38 hours per week. The description of his employment as \"casual\" in the contract was overtaken by other clauses that pointed to him being a permanent employee; and practically speaking, he had a regular roster pattern in the mining industry that was set well in advance. What should I be looking for? Casual employment usually has most or all of the following characteristics: no employer promise (e.g. in the employment contract) to engage and pay the employee; likewise, no employee promise to perform work if that is offered by the employer; engagements of the casual employee that are irregular, unpredictable, uncertain, discontinuous and intermittent; employment “by the hour” (e.g. paid an hourly rate, with the employment terminable on an hour’s notice). Employers use Tanda to help identify these key considerations. Its compliance features confirm how far in advance each shift was rostered, how consistent an employee\'s earnings have been, and how regular their working patterns are. Get started with a free 14-day trial account.

Are casual employees entitled to paid annual leave?

28 May 2020

Industry Insights    |   

Since the JobKeeper legislation came into effect last week we’ve had an influx of inquiries of how to use Tanda to make JobKeeper payments. We’ve found the easiest way to manage this for most clients is using an allowance.  Businesses are able to add an allowance to staff timesheets on an ad hoc basis as required to ensure that they are being paid enough for the business to be able to claim the allowance.  This marries nicely with what payroll systems like MYOB and Xero are doing. You are able to link the Job Keeper top up to the pay item or pay category and have it feed through directly.  For larger businesses we have the ability to automate these top up amounts through Webhooks. This takes a little bit longer to set up, but for clients who are still processing hundreds of timesheets they are finding it is saving them time and is worth the extra effort. To view the Help Guide on Setting up the JobKeeper allowance click here.  If you manage a large payroll and would like information on automating this allowance on staff that are still working, you can get more information here or by emailing support@tanda.co  For more information on the JobKeeper payment you can visit the government website for information on eligible employers, employees and the payment process. We encourage you to get professional advice from our wonderful Tanda Partners who specialise in Advisory, Bookkeeping and Accounting services.

Managing JobKeeper with Tanda

17 April 2020

Clients & Partners AU    |   

“To provide the type of healthcare our community deserves.” This is what Australia Health Alliance (AHA) promises to deliver since they opened their first clinic, the AHA Seaford Day and Night Clinic, in 1979. In 2015, they expanded and opened a new clinic, The AHA Seaford Meadows Day and Night Clinic. Every day, the clinics’ 27 staff and 20 doctors are servicing an average of 400 patients.  Each AHA staff works to make health services easily accessible to individuals and families in their community. They introduced online booking, which can be done 24/7 via mobile phones or tablet devices.  [caption id=\"attachment_34359\" align=\"alignnone\" width=\"689\"] AHA streamlines clinic visits by enabling patients to book consultations online. [/caption] While using technology is a step in the right direction, AHA needed a way to streamline their admin and workforce management, so they can focus more on delivering their promise.  Tending to payroll and other admin woes A typical day working in AHA clinics varies depending on role, but for Madeleine C., group accountant at AHA Clinic, her workdays are filled with different sorts of paperwork.  “A regular day at AHA involves a lot of data entry, paying invoices, reconciling accounts, generating reports, so having a good system in place is very important for me,” shared Madeleine.  When it comes to financial data, there have to be no grey areas. Madeleine’s day is spent making sure that all information is accurate, but it can be easier said than done when awards come into play.  “The biggest problem is always award interpretation. It would take us hours to gain clarification on one small section, especially for the health support services and nurses awards. It’s very complicated, so payroll was just very stressful,” admitted Madeleine.  Timesheet to payroll processing is one of the ways Tanda has helped AHA. Before using the platform, it takes the team one whole workday to process payroll. When Tanda was integrated into their process, it only took them half a day.  [caption id=\"attachment_34363\" align=\"alignnone\" width=\"720\"] Among other things, Tanda has helped AHA with payroll processing and award interpretation.[/caption] “We have utilised a lot of features in Tanda, but for me, the payroll integration is a huge one. I love how Tanda automatically feeds the correct pay information into Xero. That’s been a big help for me,” shared Madeleine.  Read more: Payroll Compliance: Solving the Underpayment Crisis Aside from payroll, Tanda has helped simplify other workforce management processes for them. “AHA was looking for something that would streamline our whole process, from rostering, wage tracking, to payroll. Even the management of staff leaves. We found that Tanda was able to offer that for us and we haven’t looked back since,” shared Gemma G., Senior Operations Manager at AHA.  Right now, the staff at AHA use the platform to quickly and accurately do tasks such as clocking in and out, rostering, filing and managing leaves, and payroll.  A tall order calls for a larger workforce and an automated system Running a healthcare facility is such a tall order. Each healthcare employee knows that there are high stakes that come with every patient interaction. It requires expertise, quick decision-making, and empathising with patients and their loved ones. A healthcare facility needs all hands on deck in providing the best quality of care to their patients. And inefficient admin practices or systems can be detrimental to that.  AHA recognised the need for a platform that can simplify complex processes so that they can focus more on their mission–and that is to “lead the way for convenient access to quality healthcare”.  Having a workforce management platform that covers all bases has been proving to be a smart move for AHA, especially now that they’re growing their workforce. “AHA is currently undergoing a large recruitment drive. We are in the very fast-growing area of Adelaide, so we’re currently working hard to recruit doctors,” shared Gemma.    Organisations that provide healthcare services are in a unique and challenging position today because of the COVID-19 pandemic. We recognise that healthcare frontliners need an extra helping hand right now. So we’re offering our platform for free to new sign-ups over the coming months. Sign up today and our Workforce Success team will gladly provide a personal, online walkthrough of our platform to help you get started. 

AHA Clinics’ Right Dose to Streamlining Workforce Management

20 March 2020

Industry Insights    |   

The Federal Court decided, for the second time in two years, that an employee of Workpac was entitled to paid leave even though Workpac had classified the employee as a casual. The case doesn\'t mean that all casual employees are automatically entitled to the same leave benefits as permanent employees. However, you do need to understand the decision to avoid the same traps as Workpac. What does the Fair Work Act say? Under the Fair Work Act, casual employees aren\'t entitled to some benefits of permanent full-time or part-time employment (e.g. annual leave, sick leave, carer\'s leave). The problem is that the Act doesn’t define when someone will be a casual employee. In the recent Workpac decision, the Federal Court had to interpret what the Act means by the term “casual employee”. Hasn’t the Fair Work Commission decided this already? Under virtually all modern awards, and many enterprise agreements, a casual employee is anyone \"engaged and paid as such,\" or some similar phrase. This expression has resulted in many employers reasonably thinking that an employee is a casual, and so not entitled to paid leave, if they are paid a casual loading and clearly engaged as a casual worker. However, the Federal Court had already decided in an earlier case involving Workpac that an employee was not a casual employee under the Act just because they are a casual employee under a modern award or enterprise agreement. When is someone a casual employee under the Act then? This is still pretty murky, just like the distinction between independent contractors and employees.  The Federal Court set out a list of imprecise factors that they use to help guide their decision. The closest a judge came to a definition of casual employee under the Act is \"an employee who has no firm advance commitment from her or his employer to continuing and indefinite work according to an agreed pattern of work\". In the Workpac case, the employee was not a casual employee under the Act because: his contracts said he was a casual employee, but also guaranteed (for both his and Workpac\'s benefit) that he would turn up to work 38 hours per week. The description of his employment as \"casual\" in the contract was overtaken by other clauses that pointed to him being a permanent employee; and practically speaking, he had a regular roster pattern in the mining industry that was set well in advance. What should I be looking for? Casual employment usually has most or all of the following characteristics: no employer promise (e.g. in the employment contract) to engage and pay the employee; likewise, no employee promise to perform work if that is offered by the employer; engagements of the casual employee that are irregular, unpredictable, uncertain, discontinuous and intermittent; employment “by the hour” (e.g. paid an hourly rate, with the employment terminable on an hour’s notice). Employers use Tanda to help identify these key considerations. Its compliance features confirm how far in advance each shift was rostered, how consistent an employee\'s earnings have been, and how regular their working patterns are. Get started with a free 14-day trial account.

Are casual employees entitled to paid annual leave?

28 May 2020

Industry Insights    |   

Since the JobKeeper legislation came into effect last week we’ve had an influx of inquiries of how to use Tanda to make JobKeeper payments. We’ve found the easiest way to manage this for most clients is using an allowance.  Businesses are able to add an allowance to staff timesheets on an ad hoc basis as required to ensure that they are being paid enough for the business to be able to claim the allowance.  This marries nicely with what payroll systems like MYOB and Xero are doing. You are able to link the Job Keeper top up to the pay item or pay category and have it feed through directly.  For larger businesses we have the ability to automate these top up amounts through Webhooks. This takes a little bit longer to set up, but for clients who are still processing hundreds of timesheets they are finding it is saving them time and is worth the extra effort. To view the Help Guide on Setting up the JobKeeper allowance click here.  If you manage a large payroll and would like information on automating this allowance on staff that are still working, you can get more information here or by emailing support@tanda.co  For more information on the JobKeeper payment you can visit the government website for information on eligible employers, employees and the payment process. We encourage you to get professional advice from our wonderful Tanda Partners who specialise in Advisory, Bookkeeping and Accounting services.

Managing JobKeeper with Tanda

17 April 2020

Clients & Partners AU    |   

“To provide the type of healthcare our community deserves.” This is what Australia Health Alliance (AHA) promises to deliver since they opened their first clinic, the AHA Seaford Day and Night Clinic, in 1979. In 2015, they expanded and opened a new clinic, The AHA Seaford Meadows Day and Night Clinic. Every day, the clinics’ 27 staff and 20 doctors are servicing an average of 400 patients.  Each AHA staff works to make health services easily accessible to individuals and families in their community. They introduced online booking, which can be done 24/7 via mobile phones or tablet devices.  [caption id=\"attachment_34359\" align=\"alignnone\" width=\"689\"] AHA streamlines clinic visits by enabling patients to book consultations online. [/caption] While using technology is a step in the right direction, AHA needed a way to streamline their admin and workforce management, so they can focus more on delivering their promise.  Tending to payroll and other admin woes A typical day working in AHA clinics varies depending on role, but for Madeleine C., group accountant at AHA Clinic, her workdays are filled with different sorts of paperwork.  “A regular day at AHA involves a lot of data entry, paying invoices, reconciling accounts, generating reports, so having a good system in place is very important for me,” shared Madeleine.  When it comes to financial data, there have to be no grey areas. Madeleine’s day is spent making sure that all information is accurate, but it can be easier said than done when awards come into play.  “The biggest problem is always award interpretation. It would take us hours to gain clarification on one small section, especially for the health support services and nurses awards. It’s very complicated, so payroll was just very stressful,” admitted Madeleine.  Timesheet to payroll processing is one of the ways Tanda has helped AHA. Before using the platform, it takes the team one whole workday to process payroll. When Tanda was integrated into their process, it only took them half a day.  [caption id=\"attachment_34363\" align=\"alignnone\" width=\"720\"] Among other things, Tanda has helped AHA with payroll processing and award interpretation.[/caption] “We have utilised a lot of features in Tanda, but for me, the payroll integration is a huge one. I love how Tanda automatically feeds the correct pay information into Xero. That’s been a big help for me,” shared Madeleine.  Read more: Payroll Compliance: Solving the Underpayment Crisis Aside from payroll, Tanda has helped simplify other workforce management processes for them. “AHA was looking for something that would streamline our whole process, from rostering, wage tracking, to payroll. Even the management of staff leaves. We found that Tanda was able to offer that for us and we haven’t looked back since,” shared Gemma G., Senior Operations Manager at AHA.  Right now, the staff at AHA use the platform to quickly and accurately do tasks such as clocking in and out, rostering, filing and managing leaves, and payroll.  A tall order calls for a larger workforce and an automated system Running a healthcare facility is such a tall order. Each healthcare employee knows that there are high stakes that come with every patient interaction. It requires expertise, quick decision-making, and empathising with patients and their loved ones. A healthcare facility needs all hands on deck in providing the best quality of care to their patients. And inefficient admin practices or systems can be detrimental to that.  AHA recognised the need for a platform that can simplify complex processes so that they can focus more on their mission–and that is to “lead the way for convenient access to quality healthcare”.  Having a workforce management platform that covers all bases has been proving to be a smart move for AHA, especially now that they’re growing their workforce. “AHA is currently undergoing a large recruitment drive. We are in the very fast-growing area of Adelaide, so we’re currently working hard to recruit doctors,” shared Gemma.    Organisations that provide healthcare services are in a unique and challenging position today because of the COVID-19 pandemic. We recognise that healthcare frontliners need an extra helping hand right now. So we’re offering our platform for free to new sign-ups over the coming months. Sign up today and our Workforce Success team will gladly provide a personal, online walkthrough of our platform to help you get started. 

AHA Clinics’ Right Dose to Streamlining Workforce Management

20 March 2020

Most Popular

Awards & Rostering

What you need to know about the Casual Conversion Clause

On 1 October 2018, the Fair Work Commission announced that a new casual conversion clause will be included in 80+ modern awards across Australia. What does it mean? Casual conversion is a right given to regular casual staff to request for full-time or part-time employment status, given certain prerequisites. In the awards, a ‘regular casual employee’ is: “A casual employee who has, in the preceding period of 12 months, worked a pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to perform as a full-time employee or part-time employee under the provisions of this award.” Businesses whose awards fall under mandate are required to advise their casual employees of this clause. This does not require employers to offer conversion to their eligible employees; rather, the clause entitles all eligible employees the right to request for conversion. Who can apply? The clause allows casual workers to apply for conversion if: They have  been working for the business for twelve (12) months; and Their work pattern is an ongoing number of hours over the past year, which can be continued without adjustment upon conversion to full-time or part-time. Employers must provide casual employees with a copy of the casual conversion clause within their first year of initial engagement with the business. Casual employees who are eligible to apply should request their employers in writing. Can applications be rejected? Yes, applications can be rejected. Reasonable grounds include: A significant adjustment of work hours for the employee in order to accommodate their full-time or part-time employment status; The employee worked for short periods and/or irregular shifts or hours; and The position of the casual employee will cease to exist in the foreseeable future. Rejection of applications can be done, given that both employee and employer have discussed the decision. Should employers not convert a casual employee, a written refusal must be provided, indicating the reasonable grounds of rejection. Read more: What is the Contingent Workforce and how can you leverage it in your business? What awards are covered? The introduction of the clause covers 80+ modern awards, including: Hospitality Industry (General) Award 2010; Food, Beverage and Tobacco Manufacturing Award 2010; Manufacturing and Associated Industries and Occupations Award 2010; Building & Construction General On-site Award 2010; Concrete Products Award 2010; Electrical, Electronic & Communications Contracting Award 2010; Graphic Arts, Printing and Publishing Award 2010; Plumbing and Fire Sprinklers Award 2010; Textile, Clothing, Footwear and Associated Industries Award 2010; and Vehicle Manufacturing, Repair, Services and Retail Award 2010 To check if your business is included, click here. What should your business do next? It’s important to keep in mind that Fair Work’s decision does not require businesses to convert casual employees in all cases where a casual employee makes a request for conversion to their employer.  For this reason, it’s important to understand the criteria for casual conversion and understand what your obligations are when employees meet these requirements. If you or your business falls under the new clause, here are the steps you can take to stay compliant: Check your modern award or enterprise agreement. Awards with existing clauses for casual conversion may have different requirements. Check your award for the exact rules in your industry. Create a casual conversion letter. You can also download a copy here. Notify your employees. Make sure you give your casual staff (employed as of 1 October 2018) a copy of the final letter. Record the outcome of the casual conversion offer. Whether they accept or reject the offer, keep copies of their written responses for future reference. If you are unsure how the casual conversion clause affects your business, call the Fair Work Infoline on 13 13 94 or visit www.fairwork.gov.au To make sure you stay updated with the latest news on awards, employment, and compliance, subscribe to our newsletter today.

Product Updates

Domino’s and Tanda: Building the Workforces of the Future

Brisbane-based company Tanda has today announced a business partnership with Domino’s Pizza Enterprises Limited, to automate and optimise the company’s payroll process. The partnership will assist Domino’s in empowering its franchisees with the right technology and tools to efficiently manage rostering and payroll as a competitive edge. Tanda Director Tasmin Trezise said he is excited about the partnership. “Tanda is proud to be working collaboratively with Domino’s to build the future of workforce management, and this represents an exciting step towards using technology to shape enterprise workplaces,” said Mr Trezise. “Domino’s is an agile and forward-thinking company who are leading the way in terms of innovation, whether this is through their drone delivery services or re-imagining their labour supply chain management.” The partnership between the two companies will see a roll out of Tanda\'s software to over 700 stores across Australia and New Zealand. Domino’s Australia and New Zealand CEO Nick Knight said the Company was looking forward to making franchisee’s lives easier with the efficient time and attendance program. “We are always looking to use the latest innovative technology in everything that we do as a Company – this from delivery to customers and for systems and processes with franchisees,” said Mr Knight. “Rolling out Tanda in stores across Australia and New Zealand will allow our franchisees to efficiently roster and record team member’s attendance so we look forward to reaping the benefits of the innovative program.” Trezise explained that Domino’s franchisees would soon see incredible benefits after the working relationship with Tanda begins. “This partnership will empower Domino’s franchisees with a greater understanding and insight into their labour costs so they are able to make smarter and more informed business decisions whilst having comfort that their payroll complies with current awards and enterprise agreements. “The fact that Domino’s and other Australian businesses are using new technology like Tanda is a testament to Australia’s growing success as an innovative nation.” Domino’s partnership with Tanda began in the Company’s dedicated innovation space, the DLAB, which was designed to encourage out of the box thinking. From local corner cafes to global workforces, Tanda is revolutionising the world of rostering and payroll one shift at a time. About Tanda Tanda is a scalable workforce management SaaS, that is helping businesses to unlock efficiency and productivity gains through more effective labour force management. For more information, visit www.tanda.co About Domino’s Domino’s Pizza Enterprises Limited is the master franchisor for the Domino’s brand in Australia, New Zealand, Belgium, France, The Netherlands, Japan and Germany. Across these seven markets, DPE and its franchisees operate over 2,000 stores. For more information, please visit www.dominos.com.au For further information, media enquiries or images contact: Bridget Mahon Marketing Communications Officer Email: bridget@tanda.co

Editor's Picks

Industry Insights    |   

How this retailer increased profit by $8.9m from rostering more hours

There has been a lot of speculation on why we are losing retailers so fast. An interesting research piece from the US presented an alternative hypothesis that generalises the issue down to rostering for profit rather than rostering to control costs. For context – If you were given the choice of increasing revenue by 5% or reducing costs by 5% in order to create the most profitable outcome, what would choose? A “back of the hand” calculation would show that reducing costs increases profit more than the equivalent uptick in revenue. Accordingly, most retailers choose option two. This makes sense if you assume the two scenarios are independent of each other, but what if the cost was your employees? This is where the problems arise. For industries like retail, where staff have a direct impact on sales, it’s not as simple of a question as cutting costs to increase profit. In a study led by Professor Marshall Fisher from Wharton, he and his research team constructed a conceptual model from historical data to identify stores within a US-based retail chain that had the highest potential to benefit from increased labour spend. Importantly, the strategy was actually implemented at 168 retail sites over a 26-week period to validate the model, with the retailer electing to implement the strategy further. The result: A near $8.9 million increase in profit of the stores included. The labour cost challenge The challenge in allocating labour budgets lies in the tradeoff between the known immediate payroll cost and the less certain increase in sales that could be achieved with more staff on hand. The researchers point out that retail managers have a tendency to overweigh the decision to reduce the known payroll cost than the less certain increase in sales which could be achieved by allocating additional labour spend. The labour budget death spiral The study highlights the limitation of the most common retail strategy — setting labour budgets as a portion of sales. Fisher points out that this approach creates a circular problem by failing to take into account how store labour spend can positively impact sales, with the worst case leading to a spiraling effect of reduced sales forecasts reducing labour spend which reduces sales further and so on. Quantifying the impact of labour spend on revenue Creating labour budgets that are designed to maximise profit requires retailers to know on a store-by-store basis the correlation between labour-spend and sales. One way to do this is by looking at times when staffing levels deviate from the original schedule. If ten staff were scheduled on a particular day, but on that day only eight turned up, did sales also decrease by the same portion? If not, by how much? If the answer to the above is that sales didn’t decrease at all, the store is likely overstaffed. If there is a measurable impact, the inverse scenario is likely true and the store may be losing sales by being understaffed. This is the same approach used in the study, which found the relationship between random staffing deviations and impacts on sales was statistically significant. Results showed an increase in labour spend pointed to increased sales at varying degrees, depending on known store attributes. Implementing the strategy for profit The study identified stores in a US retail chain which had the highest market potential, making them good candidates for an increased labour spend. The market potential factored in attributes like average basket value and proximity to competitors, which would create scenarios that allow workers to have the highest impact on converting sales. In the study, 168 stores were selected this way, then allocated a 10% increased labour budget over a 26-week period, of which 75% of the increase was actually consumed in practice by the stores. The outcome was a 4.5% increase in revenue at the impacted stores and resulting in a near $8.9 million profit increase. Learning from the strategy The study shows empirically why the common practice of setting labour budgets as a fixed proportion of forecasted revenue is often self-defeating when applied in a retail setting. An opportunity exists to all retailers to leverage this same profit-centric model for defining labour budgets. The data required is available to all retailers however, it may just be a matter of leveraging that information with the right systems. An integrated forecasting strategy that integrates foot traffic, sales, and employee scheduling data is a practical opportunity afforded to retailers of any size to optimise their labour resource allocations. The interesting part is, Fisher’s research is readily available to all retailers who are looking to drift away from the traditional method of fixing labour budget rosters. The next step is to get this method of labour resource allocation battle-tested in the Australian markets. Stay tuned. Up next: What is the Contingent Workforce and how can you leverage it in your business?

Industry Insights

See more

Are casual employees entitled to paid annual leave?

The Federal Court decided, for the second time in two years, that an employee of Workpac was entitled to paid leave even though Workpac had classified the employee as a casual. The case doesn’t mean that all casual employees are automatically entitled to the same leave benefits as permanent employees. However, you do need to […]

Managing JobKeeper with Tanda

Since the JobKeeper legislation came into effect last week we’ve had an influx of inquiries of how to use Tanda to make JobKeeper payments. We’ve found the easiest way to manage this for most clients is using an allowance.  Businesses are able to add an allowance to staff timesheets on an ad hoc basis as […]

Awards & Rostering

See more

Staying in Touch: How to Strengthen Workforce Communication during a Crisis

Communication is at the heart of workforce management. From establishing clear expectations, setting a bigger purpose, building company culture down to fostering accountability — communication will always be at the core of it all. It can either make or break operations and employee engagement. A study shows how poor workforce communication can be detrimental to […]

Want to retain frontline employees? Pay them properly

Eat out at a trendy restaurant or stroll into a store for some window shopping and the first person you encounter can set the tone of your interactions with the business as a whole. The demanding job of pleasing paying customers falls squarely onto the shoulders of frontline workers. They’re the first touchpoint someone has […]

Product Updates

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50+ new features to grow everything but your paperwork.

There is a pattern consistent in most industries. Companies that succeed are ones where frontline managers have influence in improving the execution of business strategy. Former Schering-Plough (now Merck & Co.) CEO Fred Hassan says frontline managers ‘represent an all-important feedback loop that allows the CEO to stay abreast of the latest developments in the business.’ […]

Employee Onboarding: Collecting staff details made paperless (updated for 2019)

Introducing Tanda’s New Employee Onboarding feature! Tanda’s Employee Onboarding Feature is the paperless way to collect all those necessary staff details such as Tax file Numbers and Super Choice forms, without the hassle of scanning and signing forms, or chasing new staff for paperwork. Through Tanda, managers will now be able to onboard new staff […]

Events & Media

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How to Communicate as a Leader with William Gooderson

“Staff members have good and bad days. We need to adjust. There will be times when there is a short deadline. We need to drive and lead because we are the team leader. There will be times when you’ve got the flexibility to take staff on a journey,” says leadership expert William Gooderson of PwC. […]

Forging the Workforce of the Future: Can you increase employee attendance?

John is 5 minutes late for work every day while his colleague Martha is late for 30 minutes once a week. Do these late clock ins really matter? For many businesses, they do. In shift work industries and frontline roles, frequent tardiness can mean disruption and loss of profit. Even just 10 minutes of being […]

Clients & Partners

See more

AHA Clinics’ Right Dose to Streamlining Workforce Management

“To provide the type of healthcare our community deserves.” This is what Australia Health Alliance (AHA) promises to deliver since they opened their first clinic, the AHA Seaford Day and Night Clinic, in 1979. In 2015, they expanded and opened a new clinic, The AHA Seaford Meadows Day and Night Clinic. Every day, the clinics’ […]

5 Women Making a Difference in Business and Technology

A day of recognition for women all over the world, International Women’s Day is happening this Sunday, March 8. To mark this year’s celebration, we spoke to six women across the globe and asked them to share their moments of success in their respective fields, as well as what advice they’d like to give women […]

Editor's Picks

Industry Insights    |   

How this retailer increased profit by $8.9m from rostering more hours

There has been a lot of speculation on why we are losing retailers so fast. An interesting research piece from the US presented an alternative hypothesis that generalises the issue down to rostering for profit rather than rostering to control costs. For context – If you were given the choice of increasing revenue by 5% or reducing costs by 5% in order to create the most profitable outcome, what would choose? A “back of the hand” calculation would show that reducing costs increases profit more than the equivalent uptick in revenue. Accordingly, most retailers choose option two. This makes sense if you assume the two scenarios are independent of each other, but what if the cost was your employees? This is where the problems arise. For industries like retail, where staff have a direct impact on sales, it’s not as simple of a question as cutting costs to increase profit. In a study led by Professor Marshall Fisher from Wharton, he and his research team constructed a conceptual model from historical data to identify stores within a US-based retail chain that had the highest potential to benefit from increased labour spend. Importantly, the strategy was actually implemented at 168 retail sites over a 26-week period to validate the model, with the retailer electing to implement the strategy further. The result: A near $8.9 million increase in profit of the stores included. The labour cost challenge The challenge in allocating labour budgets lies in the tradeoff between the known immediate payroll cost and the less certain increase in sales that could be achieved with more staff on hand. The researchers point out that retail managers have a tendency to overweigh the decision to reduce the known payroll cost than the less certain increase in sales which could be achieved by allocating additional labour spend. The labour budget death spiral The study highlights the limitation of the most common retail strategy — setting labour budgets as a portion of sales. Fisher points out that this approach creates a circular problem by failing to take into account how store labour spend can positively impact sales, with the worst case leading to a spiraling effect of reduced sales forecasts reducing labour spend which reduces sales further and so on. Quantifying the impact of labour spend on revenue Creating labour budgets that are designed to maximise profit requires retailers to know on a store-by-store basis the correlation between labour-spend and sales. One way to do this is by looking at times when staffing levels deviate from the original schedule. If ten staff were scheduled on a particular day, but on that day only eight turned up, did sales also decrease by the same portion? If not, by how much? If the answer to the above is that sales didn’t decrease at all, the store is likely overstaffed. If there is a measurable impact, the inverse scenario is likely true and the store may be losing sales by being understaffed. This is the same approach used in the study, which found the relationship between random staffing deviations and impacts on sales was statistically significant. Results showed an increase in labour spend pointed to increased sales at varying degrees, depending on known store attributes. Implementing the strategy for profit The study identified stores in a US retail chain which had the highest market potential, making them good candidates for an increased labour spend. The market potential factored in attributes like average basket value and proximity to competitors, which would create scenarios that allow workers to have the highest impact on converting sales. In the study, 168 stores were selected this way, then allocated a 10% increased labour budget over a 26-week period, of which 75% of the increase was actually consumed in practice by the stores. The outcome was a 4.5% increase in revenue at the impacted stores and resulting in a near $8.9 million profit increase. Learning from the strategy The study shows empirically why the common practice of setting labour budgets as a fixed proportion of forecasted revenue is often self-defeating when applied in a retail setting. An opportunity exists to all retailers to leverage this same profit-centric model for defining labour budgets. The data required is available to all retailers however, it may just be a matter of leveraging that information with the right systems. An integrated forecasting strategy that integrates foot traffic, sales, and employee scheduling data is a practical opportunity afforded to retailers of any size to optimise their labour resource allocations. The interesting part is, Fisher’s research is readily available to all retailers who are looking to drift away from the traditional method of fixing labour budget rosters. The next step is to get this method of labour resource allocation battle-tested in the Australian markets. Stay tuned. Up next: What is the Contingent Workforce and how can you leverage it in your business?

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