Tanda Blog: Awards & Rostering

Awards & Rostering

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 […]

A Roster System’s Role in Revitalising Australian Hospitality

Millions are being poured into locations around Australia as hospitality and tourism infrastructure projects aim to create thousands of new jobs and improve each city’s economy. But expensive new buildings may not be enough to attract local talent. According to projections from the annual National Skills Week in 2017, waiters, chefs, bar attendants and baristas, […]

Mountains into Molehills: Ways Businesses Reduce Admin

With business growth comes the increase in tasks in a manager’s plate. Critical thinking, staying abreast with the trends, making data-driven decisions, and empowering the workforce to ensure success become more important. But as a business grows, admin and paperwork tend to balloon too. So how do you grow your business but not your paper […]

3 Ways a Timesheet App Saves Businesses Time and Money

Balancing all the resources that go into handling a business is tricky. Cost, profit, wages, rostering, and more mean even the best supervisors could let something slip through the cracks. More often than not, underpayment is one of the most prominent blind spots. Research from PwC estimates the scale of underpayments in Australia goes up […]

Improve Employee Engagement with Technology (Bonus: Free Payroll Calculator)

Media often frames technology and automation as warning signals, heralding the potential replacement of workers and death of the job market. But the truth is that no one can avoid technology at work forever. Industries are moving forward; according to the McKinsey Global Institute, by 2030, approximately 14% of the global workforce may find themselves […]

Payroll Compliance: Solving the Underpayment Crisis

Plenty of media attention is being given to the issue of employee underpayments.  At the heart of the employee underpayment crisis is the complexity of the terms and conditions in awards and enterprise agreements.  The existing impasses in the political and industrial relations systems mean that there is no immediate possibility that awards or enterprise […]

Annual Leave Entitlement: Answering 3 common questions

Aussies are taking fewer and fewer vacation days each year. While this would ordinarily be good news for employers, there are more drawbacks to business than positives. National Employment Standards (NES) apply to all workers covered by the national workplace relations system, regardless of award and industry. They stipulate all non-casual employees have four weeks […]

Online Scheduling Software: 3 Things It Should Have

In an ideal world, managers focus on building people up, improving workflows, and strategising to achieve the organisation’s goals. Unfortunately, that’s not always the case.  In reality, managers juggle a lot of tasks that holds them back from doing high-value initiatives for the organisation. Most of which involve admin work that is tedious, repetitive, and […]

Announcing Student Visa Management: How to avoid a $63,000 fine and maximise visa workers’ hours

Creating a roster that maximises student visa hours while remaining below the 20-hour-a-week limit is a big challenge for businesses. With our customers employing anything from 15 to 2,000 student visa workers, this was a major pain point.  The maximum fine for breaching this condition is AU$63,000. For each breach. So giving as many hours […]

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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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