Tanda Blog: Industry Insights UK

Industry Insights UK

UK’s Multicultural Workplaces: Common challenges and how to address them

If you think you’ve noticed a rise in migration in the UK over the past year, you are not wrong. According to the Office for National Statistics (ONS), there was a 13% increase in net migration from 2016 to 2017, with them mostly coming from non-EU countries. Migrants most commonly move for employment reasons, followed […]

All Onboard! Why onboarding matters for UK businesses

Onboarding in Europe is easier said than done, according to a recent survey by the Vlerick Business School and Talmundo. Onboarding, or welcoming a new team member into the company, can pose a challenge to HR managers and staff. There are many things in an onboarding checklist, from a review of company rules to integration into […]

Should you approve shift swaps at work?

If you run a service-oriented business, you’re all too familiar with staff requesting to suddenly change or drop shifts. It’s something that any business owner cannot control; staff will encounter unlikely situations and will get sick from time to time. What is shift swapping? Shift swapping is a need for staff to change the time […]

Guide to UK Part-time Workers’ Employment Benefits

Part-time workers are very common in the workforce today. In fact, they account for 26% of the total UK labour force (8.5 million people) as of July 2018. Part-time workers are classified based on the policies created by the employer. There is no specific number of hours that makes someone full or part-time as it […]

Happiness and Healthcare: Why UK’s healthcare workers need a morale boost

The UK’s healthcare market is one of the largest in the world, collectively being worth £167 billion ($221 billion). The National Health Service (NHS) alone employs 1.7 million people, making it the biggest employer in the UK, and the fifth biggest employer in the world. But healthcare is notable for another statistic: it is one of […]

4 Helpful Tips for Your Restaurant Interior Design This 2018

Your restaurant interior design shouldn’t be an afterthought, and should be designed in a way that will drive more profit to your business. But how? To help you get started, here are four helpful tips to remember when designing and constructing your next restaurant. Size Matters Constructing your next restaurant starts with looking at the […]

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 […]

The next stage in retail evolution?

Three reasons why you should integrate your POS software The advances in credit card technology and the creation of the of the electronic payment terminal in 1982 revolutionised payment processing for businesses around the world. It leads to better cash flow management, and an increase in sales processing efficiencies, ultimately influencing customer spending behaviour. Over the […]

How much data do you bench(mark)?

Here’s a question for you: What is the fastest growing under-utilised resource in today’s modern society? According to Bernard Marr, we are creating data at an unprecedented rate, the likes of which have never been seen before in human history. So why then are we surprised to find that less than 0.5% of all data […]

Top 5 Digital Restaurant Marketing Tools You Need (2018 Update)

In today’s restaurant marketing, digital marketing is the name of the game. If you want to succeed in the restaurant industry, billboards and newspaper ads will no longer cut it. QSR Web reported that 2017 would be the year of digital marketing for restaurants. If you weren’t able to keep up with it last year, don’t worry! 2018 […]

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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 labor 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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