Have you ever wondered how often you should review your labor models? Could outdated standards be costing your business money? Regular maintenance of labor models is not just important—it’s absolutely essential. Here’s why.
Compliance, Accuracy, and Fairness: The Foundations of Effective WFM
Businesses constantly evolve—new operating procedures, working conditions, and processes are introduced as new technologies and tools emerge to help colleagues perform their duties more efficiently. From the introduction of RFID tags that speed up stock counting, to audio and visual enhancements in distribution centers that reduce order pick-times, to the now-ubiquitous self-service checkouts, the way we work has dramatically transformed over the last few decades.
But technological advancements aren’t the only drivers of change. Shifts in labor laws and the need for businesses to remain compliant with new regulations are just as significant. Think about the mandatory use of Personal Protective Equipment (PPE), improved sanitation requirements, and more frequent audits of high-traffic areas. These evolving regulations directly impact how businesses staff their teams and maintain a safe and compliant work environment.
No matter the setting—be it an office, a retail shop, or a manufacturing plant—the workplace is always changing. Staying compliant with labor laws, embracing technological advancements, and ensuring fair and transparent labor standards are all crucial elements in this ongoing evolution.
Why Do Labor Standards Matter So Much?
While many businesses focus on adopting the latest technology to forecast sales and volume drivers, such as AI and Machine Learning, they often overlook the importance of up-to-date labor standards. But neglecting these standards can lead to serious issues.
Labor standards are more than just numbers on a spreadsheet. They represent the time it should take for an employee to complete specific tasks under normal conditions. Think of them as a playbook for your staff, helping everyone understand what’s expected and how to deliver their best performance. But what makes these standards so crucial?
Ensuring the Right Staffing Levels
Have you ever faced a situation where there were either too many or too few staff on the shop floor? Accurate labor standards help you avoid these scenarios by providing a clear picture of staffing needs based on real tasks and customer demand. This way, you ensure that your store is never overstaffed or understaffed—just perfectly balanced.
Boosting Employee Performance
When everyone knows the playbook, it’s easier to measure performance. Labor standards provide a baseline to see where employees excel and where they might need a bit more coaching. This approach encourages continuous improvement, which is key to maintaining high service standards and a motivated team.
Controlling Costs
Labor costs can quickly spiral out of control if not managed properly. By using precise labor standards, you can minimize unnecessary overtime and make sure every hour worked is productive. This keeps costs in check while ensuring fair pay for your employees.
Enhancing Productivity and Customer Experience
When employees have clear guidelines, tasks are completed efficiently, operations run smoothly, and the customer experience improves. Everyone is on the same page, and the result is a seamless shopping experience that keeps customers coming back.
Staying Flexible and Adaptable
The retail landscape is always changing—whether it’s a holiday rush, a new product launch, or an unexpected spike in demand. With accurate labor models, you can quickly adapt to these changes without sacrificing service quality or operational efficiency.
If your labor standards are outdated, incorrect, inflexible, nonexistent, or overly complex, your labor forecast will inevitably be inaccurate. And inaccurate labor standards can lead to:
- Overestimating Hours: Leading to overstaffing and increased costs.
- Underestimating Hours: Resulting in understaffing, lower service quality, and potential compliance issues.
- Operational Inefficiencies: Causing chaos in daily operations and affecting service quality.
- Employee Dissatisfaction and Turnover: Leading to stress, unpredictability, and high turnover rates.
Think about it—how often have you heard stories of retail staff feeling overworked due to poor scheduling? Now, consider the difference when a store operates with accurate labor standards. Employees know what to expect, schedules are fair, and tasks are balanced. The result? A happier, more productive team and a smoother, more efficient operation.
The Bottom Line: Don’t Let Inaccurate Standards Cost You
Outdated or inaccurate labor standards can cost your business more than just money—they can impact employee happiness, customer satisfaction, and even your brand reputation. If your labor standards haven’t been reviewed in a while, it might be time to take a closer look.
Stay tuned for our next blog, where we’ll dive into practical solutions for keeping your labor standards up to date and effective.