With contributions from Joe Vernon
It makes you a better manager of headcount and labor costs. The solution identifies cost drivers, produces related metrics and builds a foundation of operational intelligence specific to labor. The data is robust, granular and conclusive and drives programs in Pay for Performance and Labor Planning and Forecasting.
’Pay for performance’ is an incentive based pay structure that financially awards workers who consistently work above the standard. The system produces an individual labor scorecard and tracking mechanism. Since people tend to act differently when they know they are being measured you can rely on a WFM implementation to yield a positive result. Typical improvements are : increases in productivity per FTE; lower overall labor costs; improved control of break times ; and improved employee morale. For benefits of a WFM in a retail environment read this study sponsored by Redprairie (JDA).
The Forecasting and Planning module of WFM is a tactical tool for managers who are trying to decide how many people they need. Retail tends to be a dynamic demand driven environment especially with the advent of multichannel fulfillment (shipping to stores, retailers, web customers and managing returns) all out of one DC. The shipping and processing requirements for a day can vary in volume and complexity. That creates the need for an analytical tool that can look at a specific profile of work(demand) over a shift, day or week and determine what are the right number and type of employees to complete the tasks on-time and accurately. You can extend this capability to plan and forecast labor for a month or season. This modeling of demand and fitting the right workforce against it broadens the circle of WFM’s influence and can drive the hiring directives for human resources.
If you do choose to deploy WFM you should account for a large element of Change Management. How you communicate the standard, how you structure the incentive, how results are displayed, and inevitably, how top performers are paid are just a few of the key pieces to be cognizant of and to handle appropriately for your work force. Mismanagement of one of these items can undermine the entirety of the project.
With WFM you get visibility and operational intelligence and that translates into objectivity, awareness and benchmarking. Objectivity is provided by engineered standards. Awareness is made manifest with reporting and dashboards and benchmarking is established by comparing the standards against actual performance.
A WFM implementation if properly managed will have a positive influence on your operational costs, the way you look at and talk about distribution processes, and on work force satisfaction and engagement. Most people enjoy the immediate feedback of being measured and are empowered by being compensated and recognized for their performance. If you achieve just this sense of empowerment your organization will have benefited a great deal.