Tanda Blog: Events & Media AU

Events & Media AU

Tasmin Lands in San Fransisco for Tanda Tour

One of our directors, Tasmin, just landed in San Fransisco for his Tanda Tour of the USA. He’ll be blogging here regularly as part of his trip! Here’s his first post. I’ve been lucky enough to board with Mark Howard and his wife in the heart of Palo Alto, Silicon Valley. Mark is the Senior […]

Tanda are Officially Hot to Watch

Over the weekend, the Sydney Morning Herald published a list of Australia’s top 10 startups to watch in 2014. “In ten years you’re going to wish you’d gotten in on the ground floor with these exciting enterprises.” We’re humbled to be included on their list. It’s been a big 12 months for us and 2014 […]

The 2013 Lord Mayor’s Entrepreneurs Grant

Last September, Tanda co-founder Alex Ghiculescu was one of the recipients of the inaugural Brisbane City Council Lord Mayor’s Entrepreneurs Grant. Through this grant, he was awarded $1000 to support his professional development and Tanda’s ongoing growth. Alex wrote a summary of his experiences, which we’ve included below. I used my grant to attend the […]

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 […]

PayAus is Changing Name! Meet Tanda

We’ve got some exciting news to share. From January 5, we’ll be changing our name to ‘Tanda’. It’s our big New Years Resolution. Why Tanda? Tanda (pronounced Tan-da) is simply the long form of ‘T&A’ or ‘time and attendance’. It’s catchy, fun, and significantly less confusing for what services we provide. The name change forms […]

Bright Ideas Paying Dividends for Budding Entrepreneurs

Four housemates, a bright idea and a client list that’s pushing towards triple figures six months after launch. Technology entrepreneurship is alive and well in Brisbane and software developer PayAus (Now, Tanda) is among the latest wave of shoe-stringers to find an untapped market niche. PayAus’s cloud-based rostering, sign-on and reporting program promises a low-cost […]

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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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