Tanda Blog: Clients & Partners AU

Clients & Partners AU

Crafting Workforce Success at Windsor Alehouse

Windsor Alehouse on Punt Road is something of an innovation itself. Formerly Pint on Punt, this familiar three-storey building transformed itself from an all-Irish pub to a classical beer bar, changing the way it does things in the process. “It was tough at the start,” says manager Ewan. “We actually got rid of what we […]

What You Need to Look for in Payroll Software

Payroll software takes away the hassles of manual calculation of each employee’s pay. It drastically cuts down processing time and errors, which means that your staff always get paid for the right amount at the right time. A quick Google search for “payroll software” shows that there are tons to choose from. But what exactly […]

How to be compliant for Single Touch Payroll

The new Federal Government initiative of Single Touch Payroll will aim to streamline business reporting obligations regarding certain taxes and wage information. Legislated on the 16 September 2016 under the Budget Savings (Omnibus) Act 2016, Single Touch Payroll (STP) will become mandatory July 1 2018, for employers with 20 or more employees. Single Touch Payroll […]

Tanda is MYOB’s Fastest Growing Add-on of 2016

Tanda was just named MYOB’s Fastest Growing Add-on of the Year for 2016. This is the first time the award has been conferred and is the first of its kind in Australia, marking an incredible milestone and achievement for Tanda. When I first joined Tanda in 2013, we were just a small team in a […]

Triumph for Tanda clients – and here’s the proof

Tanda works to help your business succeed by taking the dramas and expense of time and attendance out of your equation. That’s why we love to celebrate when we see our clients are doing so well. Brisbane-based company The Print Bar has been with us for a long time now and came to us with […]

The Print Bar uses MYOB and Tanda to control costs

The Print Bar’s warehouse in the inner-suburbs of Brisbane is a symphony of people and machinery, churning out some of the highest quality custom t-shirt printing available in Australia. In just 5 years, Managing Director Jared Fulinfaw has grown from 2 employees in his parents’ garage to become one of largest suppliers of custom t-shirt […]

Bendigo … Isn’t there a bank there?

Welcome to Bendigo. It’s here that, in 1851, the discovery of gold set the town’s future as a prominent Australian boomtown. And it’s here that, this week, the Tanda crew arrived for the Xero Roadshow’s first day. We didnt find any gold. But we did discover a lot more about Australia’s most historically significant finance […]

Tanda “Clocks In” to the Xero Roadshow!

Xero is hitting the road in February, taking their team of cloud accounting experts on the road to answer your questions. We’ve been invited along and are looking forward to catching up with our existing partners as well as meeting plenty of new ones across the country. Using Xero’s API we are helping businesses (and […]

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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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