But losses mount for the home furnishings e-retailer that went public in October.
Retailers are discovering the new efficiencies of web-based workforce management systems.
Computerized employee scheduling systems are certainly nothing new to retailers. Excel-based or client server-based workforce management systems have been around for years. And they generally did a competent job of automating the time-consuming process of writing up employee schedules.
The problem with these programs, however, was that they didn`t always live up to expectations and some store managers were reluctant to use them. And these early systems were typically maintained at each store location, making it difficult for corporate management to keep track of what was going on.
Enter the web
All that has changed during the last two years as the web entered the picture. Putting scheduling and employee utilization programs at a central corporate location, then using the web to move schedules and related information between the corporate center and the store has made the whole process more manageable. Additionally, store-level managers are freed up to do more sales-related tasks and employees are kept more closely informed of their upcoming work schedules.
"With the second-generation systems, which were client server-based, each store still maintained an isolated system and retailers conducted scheduling in silos," says Rob Garf, research analyst with AMR Research Inc. who last fall completed a study on computerized workforce management systems. "As a result, the home office was not kept abreast of what was going on. With the introduction of web-based systems, the software resides in a central location and is accessed by store management and employees in a real-time manner. "
Such systems still give store managers the ability to make changes in scheduling to fit their needs, but the central office now knows what is happening at each store. "An alert can go out, for instance, if certain stores are exceeding their labor budgets and the home office controls what standards are used to decide who works," Garf says.
If nothing more, using the web to implement a computerized workforce management system is more expedient than without the web. "We had one retailer that went live with its system in 1,700 stores in one day," says Peter Reilly, vice president of sales for BlueCube Software Inc., Alpharetta, Ga.-based developer of a web-based workforce management system. "It would be impossible to send out all the necessary software and get all the stores up and running with separate systems in that amount of time."
Other benefits of web-based management systems include:
l A level of objectivity in scheduling. Having the central office set scheduling criteria and a computerized system determine the actual schedule eliminates any accusations that a manager favored certain employees when setting the schedules.
l Easy access as employees can view their schedules from home by signing on to the web site.
l The ability for employees to publicly request shift changes by stating the need for a replacement on the web site and allowing coworkers to use the site to volunteer to swap shifts. Management can review and approve these changes online. Employees can then go online again to see if their requests were approved.
l The ability for multiple stores to share employees. By keeping the scheduling centralized, employees can work at multiple stores within the chain without scheduling conflicts. This is especially helpful with highly skilled employees whose services may not be required on a full-time basis at any one store.
In addition to these web-specific benefits, the new systems often improve upon other advantages that earlier computerized scheduling programs created, such as the ability to program in union or federally mandated work rules, and assuring the optimization of employee utilization so that stores are not wasting money by overstaffing certain departments while potentially losing sales by understaffing others.
"The web allows companies to have better control over how labor and business rules affect scheduling," Garf says. "Before, the central office might have sent down schedules that applied federal rules and standards and then the individual store managers would have had to go back and make changes to comply with local and state rules. California, for example, has much more rigorous labor laws than other states."
With the web, the corporate office can program the California rules into the system so that the scheduling system automatically applies those rules only to stores in California. Local managers would not have to make any adjustments and the corporate office could be assured of total compliance.
When many retailers talk about workforce management systems, they are often looking mostly at how to cut costs by reducing employees. But that is not the objective they should be trying to achieve, vendors and analysts say.
"The idea is to get the right employees doing the right jobs at the right time. Sure, you`ll save on labor costs, but more important, you should increase sales by making sure customers are being waited on properly," Garf says. His report cites an unidentified apparel retailer that showed a 50-basis point improvement in conversion rates when it used an algorithm-based scheduling program to align staff with customer demand. That improvement translated into a 2.5% increase in sales.
Web-based systems often are better at predicting workforce requirements than earlier systems because they can look at more factors when determining how many employees will be required in each department. Vendors of workforce management programs tout a number of improved analytic features in their most recent products.
"Theoretically, these new analytical tools could have run on the client server or even the old mainframe models, but the reality is that they didn`t," says Katherine Jones, research director with Boston-based Aberdeen Group. "Using the web makes it easier to get the information, crunch it and disseminate it in real-time, or web-time, as we like to call it."
While Garf says many of the improved analytical components of the web-based systems introduced in the last two years would most likely eventually have been applied to the legacy or client server platforms, it is not completely coincidental that they debuted simultaneous with the introduction of web-based systems.
"The centralized approach that you get with the web makes sure all these factors are being applied consistently," he says. "Also, as retailers move to web-based systems, many see it as an opportunity to re-evaluate and upgrade the analytical tools they were using with their old legacy systems."