Tanda Blog

Latest posts

Awards & Rostering    |   

The manufacturing industry presently accounts for 5.6% of Australia’s economy. The industry is responsible for producing a wide range of products including food, beverages, tobacco, textiles, chemicals, machinery, and furniture and as such covers a large number of Australian workers. Although there is some variance, the majority of employees in these professions are covered under the manufacturing award. Despite a recent slowdown, industry prospects are looking up. The latest quarterly survey of industrial trends found that while COVID has heavily impacted the industry, many firms are able to see past current challenges and expect a return to normality in the near-term. The industry is facing challenges, the most significant of which is managing talent. This begins with an accurate and reliable payroll that balances labour expenses with profits.  What is the Manufacturing Award? The Manufacturing and Associated Industries and Occupations Award 2010 [MA000010] outlines the award for this industry. It covers all employers and employees throughout Australia who are involved in any manufacturing-related work. Examples of these occupations include engineering and manufacturing tradespersons and apprentices, laboratory technicians and testers, and locksmiths. Classifications and minimum award rates for an adult employee can be found below. However, there are exceptions that need to be taken into account. Using the manufacturing award is not always as easy as it appears.     Read more: Australian Manufacturing Back on Track: How to ride the sector’s trends Manually calculating manufacturing award rates Many business owners and managers manually compute manufacturing award rates through the P.A.C.T. Pay and Conditions Tool. Using this tool, you can look up the award rates for your employees based on their occupation. You can also use the leave and shift calculators. The more staff you have, the more time consuming and difficult this becomes. Payroll errors are a frequent occurrence for businesses who choose to manually calculate their employee\'s entitlements, and these mistakes can be costly. For example, inaccurate calculations can result in compliance penalties, retroactive tax payments, and labour hours spent rectifying mistakes flagged by employees.  Read more: Taking Back Time: Solving the enduring wage theft problem in Australia Automatically calculating manufacturing award rates With many Australian business owners in manufacturing industries unable to manually calculate the increasingly complex award entitlements,  automatic award interpretation software has become the new industry standard. Within Tanda, our award engine automatically adds compliant pay rates to your rosters and timesheets, including base rates, overtime, allowances, and higher duties. All managed awards, including the manufacturing award, have built-in base rates that sync with payroll and update when Fair Work mandates change. This means that award rates are updated in accordance with all future Fair Work changes and birthdate rollovers for employees, keeping businesses compliant without constantly monitoring Fair Work’s site for updates to complex rule sets. To put our award engine to the test sign up for a free trial of the system. 

How to Understand the Manufacturing Award in Australia

10 August 2020

Awards & Rostering    |   

In 2019, the Australian retail industry achieved a turnover of $AU329.6 billion, making it one of the largest industries in the country. There are almost 140,000 retail businesses in Australia, employing approximately 1.2 million people. This accounts for 10.7% of all employment, meaning a large number of Australians are covered under the retail award.  What is the Retail Award? The General Retail Industry Award [MA000004], is a comprehensive set of pay rules created and maintained by the Fair Work Commission. It advises employers of the minimum entitlements they must provide employees and covers the specific pay rates, allowances and rules relating to all employees working in the Australian retail industry. Examples of those covered under the award include employees working in food retailing, supermarkets, grocery stores, department stores, clothing and recreational goods retailing amongst other types of businesses. A full definition of the scope of the award can be found here under “3. Definitions and interpretations”. Below are the minimum rates for the various levels of employment. The current rule set came into effect on the 1st of July 2020. Additional changes are scheduled for the award on the 1st of February 2021, where employees will be required to revise their rates to reflect the updated entitlements.  Limitations of The Award System Australia has 122 Modern Awards, with the average Award having between 180-200 individual rules. These rules are extremely comprehensive, covering overtime hours for weekdays and weekends, RDO overtime, public holidays and late-night shifts. While the award system does provide an airtight set of instructions for employers, many are finding that the increasing complexity of entitlements is proving difficult to keep track of.  Historically, business owners and managers have used the Fair Work Commission’s calculator to manually look up entitlements for each employee, before entering the rates into their payroll system. However, the more staff you have, the more time consuming and complex this process becomes. A 2019 study by the Australian HR Institute revealed that 33% of Aussie businesses admitted to making errors on every single monthly pay run. With 241 individual rules and classifications within the General Retail Award, it’s no surprise that errors are a frequent occurrence.  Read more: Why is it so hard to pay people correctly in 2020? Automatically Calculate the Retail Award Rate With many Australian business owners unable to manually calculate the growing list of entitlements, automatic award interpretation software has become the new industry standard.  Within Tanda, our award engine automatically adds compliant pay rates to your rosters and timesheets, including base rates, overtime, allowances, and higher duties. All managed awards, including the retail award, have built-in base rates that sync with payroll and update on staff birthdays or when Fair Work mandates change. This means that award rates are updated in accordance with all future Fair Work changes and birthdate rollovers for employees, keeping businesses compliant without constantly monitoring Fair Work’s site for updates to complex rule sets. To put our award engine to the test sign up for a free trial of the system. 

How to Understand the Retail Award in Australia

28 July 2020

Industry Insights    |   

This guide explains how to lodge a tax declaration form, to the Australian Taxation Office (ATO) online without having to print, type, or scan a thing.  Firstly we describe the traditional method using the ATO business portal. Then, a new, faster, and easier method using ATO compliant digital onboarding software.    Option 1 - The traditional method via the ATO Business Portal An option to lodge the tax file number (TFN) Declaration form online via the ATO business portal has existed for some time.  While many employers still distribute paper forms to new employees, the ATO will now accept a digitally signed form which is a welcome advancement. This method of lodging through the ATO business portal still has major limitations not yet addressed by the tax office: ❌There are no digital “checks” available to reduce errors in the ATO digital form. ❌Paper forms are prone to manual entry errors. ❌Duplication of work is required to enter this data again into accounting or payroll software. ❌The ATO form is more complex than other methods available. To lodge directly through the ATO website you will need to have an ATO business portal account. Copies of the process and the digital version of the TFN Declaration form are located here.   Option 2 - The more efficient method using the ATO-compliant Tanda Onboarding tool This faster option to lodge a tax declaration form forms uses Tanda’s software which meets ATO compliance requirements and lodges forms directly.  Not only is this option faster, but it solves the major limitations of the traditional TFN Declaration form. The form is compliant with ATO ‘SBR’ requirements, meaning Tanda collects all the required information but using an easier format. The benefits of using Tanda Onboarding include: ✔️Inbuilt logic to pick up incorrect TFN numbers, and assist to catch common mistakes before they happen. ✔️The fastest method available by eliminating the need to double enter form responses. ✔️Automatically create the employee in MYOB or Xero Payroll systems to eliminate errors and save time. ✔️Tanda Onboarding is the simplest method available to collect the required information.    How it works: Send a link to Tanda Onboarding directly to the employee by email or text message  Instantly collect the receipt of the tax declaration form on completion by the employee Allow you to lodge the tax declaration form directly to the ATO with no data entry required Send the employee automatically to MYOB or Xero    Automate more than just the tax declaration form Tanda Onboarding also partners with accounting systems MYOB & Xero to provide automatic transfer of the details filled out in Tanda Onboarding to your new employee in your payroll file. Tanda Onboarding will still work and lodge the TFN Declaration with all other systems. This means you can not only collect all the required payroll documentation but also automatically create the new employee in MYOB or Xero with no manual entry required. Looking to get started with Tanda Onboarding? Sign up for a free Tanda trial account, and follow the guide to experience all the platform has to offer.

How to lodge a tax declaration form online (TFN)

16 July 2020

Awards & Rostering    |   

The manufacturing industry presently accounts for 5.6% of Australia’s economy. The industry is responsible for producing a wide range of products including food, beverages, tobacco, textiles, chemicals, machinery, and furniture and as such covers a large number of Australian workers. Although there is some variance, the majority of employees in these professions are covered under the manufacturing award. Despite a recent slowdown, industry prospects are looking up. The latest quarterly survey of industrial trends found that while COVID has heavily impacted the industry, many firms are able to see past current challenges and expect a return to normality in the near-term. The industry is facing challenges, the most significant of which is managing talent. This begins with an accurate and reliable payroll that balances labour expenses with profits.  What is the Manufacturing Award? The Manufacturing and Associated Industries and Occupations Award 2010 [MA000010] outlines the award for this industry. It covers all employers and employees throughout Australia who are involved in any manufacturing-related work. Examples of these occupations include engineering and manufacturing tradespersons and apprentices, laboratory technicians and testers, and locksmiths. Classifications and minimum award rates for an adult employee can be found below. However, there are exceptions that need to be taken into account. Using the manufacturing award is not always as easy as it appears.     Read more: Australian Manufacturing Back on Track: How to ride the sector’s trends Manually calculating manufacturing award rates Many business owners and managers manually compute manufacturing award rates through the P.A.C.T. Pay and Conditions Tool. Using this tool, you can look up the award rates for your employees based on their occupation. You can also use the leave and shift calculators. The more staff you have, the more time consuming and difficult this becomes. Payroll errors are a frequent occurrence for businesses who choose to manually calculate their employee\'s entitlements, and these mistakes can be costly. For example, inaccurate calculations can result in compliance penalties, retroactive tax payments, and labour hours spent rectifying mistakes flagged by employees.  Read more: Taking Back Time: Solving the enduring wage theft problem in Australia Automatically calculating manufacturing award rates With many Australian business owners in manufacturing industries unable to manually calculate the increasingly complex award entitlements,  automatic award interpretation software has become the new industry standard. Within Tanda, our award engine automatically adds compliant pay rates to your rosters and timesheets, including base rates, overtime, allowances, and higher duties. All managed awards, including the manufacturing award, have built-in base rates that sync with payroll and update when Fair Work mandates change. This means that award rates are updated in accordance with all future Fair Work changes and birthdate rollovers for employees, keeping businesses compliant without constantly monitoring Fair Work’s site for updates to complex rule sets. To put our award engine to the test sign up for a free trial of the system. 

How to Understand the Manufacturing Award in Australia

10 August 2020

Awards & Rostering    |   

In 2019, the Australian retail industry achieved a turnover of $AU329.6 billion, making it one of the largest industries in the country. There are almost 140,000 retail businesses in Australia, employing approximately 1.2 million people. This accounts for 10.7% of all employment, meaning a large number of Australians are covered under the retail award.  What is the Retail Award? The General Retail Industry Award [MA000004], is a comprehensive set of pay rules created and maintained by the Fair Work Commission. It advises employers of the minimum entitlements they must provide employees and covers the specific pay rates, allowances and rules relating to all employees working in the Australian retail industry. Examples of those covered under the award include employees working in food retailing, supermarkets, grocery stores, department stores, clothing and recreational goods retailing amongst other types of businesses. A full definition of the scope of the award can be found here under “3. Definitions and interpretations”. Below are the minimum rates for the various levels of employment. The current rule set came into effect on the 1st of July 2020. Additional changes are scheduled for the award on the 1st of February 2021, where employees will be required to revise their rates to reflect the updated entitlements.  Limitations of The Award System Australia has 122 Modern Awards, with the average Award having between 180-200 individual rules. These rules are extremely comprehensive, covering overtime hours for weekdays and weekends, RDO overtime, public holidays and late-night shifts. While the award system does provide an airtight set of instructions for employers, many are finding that the increasing complexity of entitlements is proving difficult to keep track of.  Historically, business owners and managers have used the Fair Work Commission’s calculator to manually look up entitlements for each employee, before entering the rates into their payroll system. However, the more staff you have, the more time consuming and complex this process becomes. A 2019 study by the Australian HR Institute revealed that 33% of Aussie businesses admitted to making errors on every single monthly pay run. With 241 individual rules and classifications within the General Retail Award, it’s no surprise that errors are a frequent occurrence.  Read more: Why is it so hard to pay people correctly in 2020? Automatically Calculate the Retail Award Rate With many Australian business owners unable to manually calculate the growing list of entitlements, automatic award interpretation software has become the new industry standard.  Within Tanda, our award engine automatically adds compliant pay rates to your rosters and timesheets, including base rates, overtime, allowances, and higher duties. All managed awards, including the retail award, have built-in base rates that sync with payroll and update on staff birthdays or when Fair Work mandates change. This means that award rates are updated in accordance with all future Fair Work changes and birthdate rollovers for employees, keeping businesses compliant without constantly monitoring Fair Work’s site for updates to complex rule sets. To put our award engine to the test sign up for a free trial of the system. 

How to Understand the Retail Award in Australia

28 July 2020

Industry Insights    |   

This guide explains how to lodge a tax declaration form, to the Australian Taxation Office (ATO) online without having to print, type, or scan a thing.  Firstly we describe the traditional method using the ATO business portal. Then, a new, faster, and easier method using ATO compliant digital onboarding software.    Option 1 - The traditional method via the ATO Business Portal An option to lodge the tax file number (TFN) Declaration form online via the ATO business portal has existed for some time.  While many employers still distribute paper forms to new employees, the ATO will now accept a digitally signed form which is a welcome advancement. This method of lodging through the ATO business portal still has major limitations not yet addressed by the tax office: ❌There are no digital “checks” available to reduce errors in the ATO digital form. ❌Paper forms are prone to manual entry errors. ❌Duplication of work is required to enter this data again into accounting or payroll software. ❌The ATO form is more complex than other methods available. To lodge directly through the ATO website you will need to have an ATO business portal account. Copies of the process and the digital version of the TFN Declaration form are located here.   Option 2 - The more efficient method using the ATO-compliant Tanda Onboarding tool This faster option to lodge a tax declaration form forms uses Tanda’s software which meets ATO compliance requirements and lodges forms directly.  Not only is this option faster, but it solves the major limitations of the traditional TFN Declaration form. The form is compliant with ATO ‘SBR’ requirements, meaning Tanda collects all the required information but using an easier format. The benefits of using Tanda Onboarding include: ✔️Inbuilt logic to pick up incorrect TFN numbers, and assist to catch common mistakes before they happen. ✔️The fastest method available by eliminating the need to double enter form responses. ✔️Automatically create the employee in MYOB or Xero Payroll systems to eliminate errors and save time. ✔️Tanda Onboarding is the simplest method available to collect the required information.    How it works: Send a link to Tanda Onboarding directly to the employee by email or text message  Instantly collect the receipt of the tax declaration form on completion by the employee Allow you to lodge the tax declaration form directly to the ATO with no data entry required Send the employee automatically to MYOB or Xero    Automate more than just the tax declaration form Tanda Onboarding also partners with accounting systems MYOB & Xero to provide automatic transfer of the details filled out in Tanda Onboarding to your new employee in your payroll file. Tanda Onboarding will still work and lodge the TFN Declaration with all other systems. This means you can not only collect all the required payroll documentation but also automatically create the new employee in MYOB or Xero with no manual entry required. Looking to get started with Tanda Onboarding? Sign up for a free Tanda trial account, and follow the guide to experience all the platform has to offer.

How to lodge a tax declaration form online (TFN)

16 July 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

How to lodge a tax declaration form online (TFN)

This guide explains how to lodge a tax declaration form, to the Australian Taxation Office (ATO) online without having to print, type, or scan a thing.  Firstly we describe the traditional method using the ATO business portal. Then, a new, faster, and easier method using ATO compliant digital onboarding software.    Option 1 – The […]

Why is it so hard to pay people correctly in 2020?

Most people never have to worry about the payroll compliance process required to get someone paid. It’s not a hugely riveting subject; staff go to work, they work, they get paid. However, as Fair Work’s list of big names failing to pay minimum entitlements continues to grow, we’re often left wondering why it is so […]

Awards & Rostering

See more

How to Understand the Manufacturing Award in Australia

The manufacturing industry presently accounts for 5.6% of Australia’s economy. The industry is responsible for producing a wide range of products including food, beverages, tobacco, textiles, chemicals, machinery, and furniture and as such covers a large number of Australian workers. Although there is some variance, the majority of employees in these professions are covered under […]

How to Understand the Retail Award in Australia

In 2019, the Australian retail industry achieved a turnover of $AU329.6 billion, making it one of the largest industries in the country. There are almost 140,000 retail businesses in Australia, employing approximately 1.2 million people. This accounts for 10.7% of all employment, meaning a large number of Australians are covered under the retail award.  What […]

Product Updates

See more

Managing leave requests without tedious manual entry.

In a first for workforce software, leave management now has intelligent automation. We believe that intelligent automation will transform the way you run your business. Automation is already everywhere in Tanda. From simple functions like sending bulk rosters to all staff, to more complex operations, such as our Cognitive Rostering. Only Tanda automates the filling […]

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.’ […]

Events & Media

See more

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

How Care Agency’s recruiting team slashed their onboarding time by 94%

Handling more than a hundred employees and keeping them happy and satisfied isn’t a walk in the park. It’s one thing to manage who you hold throughout the year. It’s a whole other challenge entirely to go through an extensive hiring and orientation process when you coordinate with some of the largest healthcare organisations in […]

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’ […]

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?

More Resources

Subscribe to the Tanda Blog!

Stay updated with the latest insights on frontline work, industry news, business templates, and other free resources.

*Please fill this field
*Please fill this field