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Posts from the ‘Labor Cost Management’ Category

Harvesting Your Workforce Benefits – Learning from the Past

Wales Punch ClockToday’s guest post is from our board member, Mark Wales.  Mark has over 30 years of retail experience both in the US, Europe and Asia with leading retailers such as Ralph Lauren, Williams-Sonoma, Selfridges, and Tesco. 

A couple of years back I took my American wife back to England (my home country) to spend time away from our busy New York schedule. We visited a working agricultural museum that had been a workhouse for the poor and destitute of the local parishes from the 1700s through World War II. It then became an “Old People’s Home” providing care for the elderly until my father closed it in the 70s as being unsuitable by modern standards. This allowed the building and lands to be turned into the working farm museum we visited, which today continues to educate today’s generations on the rich local history.

I was surprised that in the midst of the steam tractors and other farming machinery was an early 1900s punch clock, which immediately jolted me out of vacation mode and into thinking about my modern role in Workforce Management.  It made me realize that there is a link to my local history. Norfolk in England has a very long agricultural history. Caring for the land is important, and former British politician Thomas Coke promoted crop rotation to ensure that you could increase productivity through matching the right crop at the right time to increase yields by maintaining the right balance of fertility in the soil.

That lesson is as crucial for farming in the 1700s as it is for managing retail and hospitality in the 21st Century. Today too many companies treat their payroll as the largest controllable expense. They look at the numbers and, when they start to think how to make their business more profitable, they start to think of what they can take out and not what they have to put back to achieve productivity and profitability. Thomas Coke’s end goal was higher yields but he started with what he needed to put back into the soil to achieve that. For today’s executive, the conversation with their management teams should be:

“Is our investment in our employees giving us the right return?”

“Do we have the right people, at the right time, in the right jobs, doing the right thing?”

“Are we reducing turnover and increasing employee engagement to increase productivity and profitability?”

“Does our investment strategy align the values of the organization?”

If the answer to these questions is, “Yes,” then they will join the ranks of the admired companies that are out performing their peers because they have created the right culture which matches their company goals. An engaged employee will give that extra discretionary effort to meet the needs of the customer. When you have the right balance, that meets the needs of both your customer and your employees, you’ll have a better chance to develop a sustainable and profitable company.

It is a myth that payroll is your largest controllable expense, it is actually one of your most critical investment decisions.

How does your organization view payroll?

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Good Jobs Strategy = Happier Employees = Better Customer Service

TWS20.600.dashboardIn a recent New York Times Magazine article entitled Thinking Outside the (Big) Box, Adam Davidson (of NPR’s “Planet Money) talks about a great customer service experience he had at Ikea recently when he went shopping for a closet system.   He found the staff to be both available and helpful.  He was surprised given that he’d had a prior experience years ago that wasn’t so hot, so he decided to investigate what had changed.  He spoke with an executive at Ikea and learned the following:

“This wasn’t a fluke. A couple of days later, Rob Olson, the C.F.O. of Ikea U.S., told me that since my last visit, the company had invested in a new (Kronos) work-force-management system that reminded me of much of Ton’s thesis. The software helps the company to better distribute workers throughout the store, so that there are more of them in the areas where people have the most questions, like closets.”

The “Ton” referred to above is Zeynep Ton, a business professor at MIT and author of the new book “The Good Jobs Strategy”.  In the book (available next week) Ton argues that paying workers more and treating them better is better for the bottom line.  In her research for the book, Ton learned that even low cost retailers can provide good jobs for their employees while keeping costs low for their customers.  In the low cost retail sector, she found that the best employers operated on 4 key principles:

  1. They offered fewer choices to their customers
  2. They cross-trained their employees
  3. They standardize processes while empowering employees to do the right thing for the customer
  4. They “operate with slack”; i.e. they staff at levels that enable employees to spend time with customers

That last item is the one that workforce management software enables, providing employers with accurate data and predictive analytics about the staffing levels required to deliver a great customer experience.

If you’re interested in learning more about Zeynep Ton’s research:

Is the Working Families Flexibility Act of 2013 Good for Workers or Not?

This week I spoke with my Workforce Institute colleagues Sue Meisinger and Andy Brantley about the Working Families Flexibility Act currently making its way through Congress.  If passed, this Act would enable private sector employers to offer comp time in lieu of overtime pay to their hourly workers.  This has been the case for public sector employees since 1985.

This change would represent a significant change to the Fair Labor Standards Act (FLSA) for private sector employers and workers, and the bill has generated a lot of public debate about whether passage of this Act is good or bad for those workers.  Proponents believe this Act will provide workers with needed flexibility.  Detractors believe this is ultimately an anti-worker bill that will result in employers avoiding overtime pay that their workers are due.

Both Sue and Andy have given this legislation a fair amount of consideration in recent weeks. Andy testified before Congress in support of the bill, and Sue wrote about it in this week’s HRE online.   Both are skeptical it will ultimately become law. During our conversation, we discussed the following questions:

  • Does the Act give workers flexibility in trading overtime for comp time or does it further erode protections previously given to America’s workers by robbing them of overtime pay as required by the Fair Labor Standards Act?
  • Unions have come out against the bill – why?
  • Whether this bill passes or not, what are best practices employers can use to provide better flexibility to working families?

You can download and listen to a podcast of our conversation here:

Discussion with Andy Brantley and Sue Meisinger about the Working Families Flexibility Act of 2013

If you’d like to learn more about the Act, you can find a collection of supporting documents here.

You may also want to check in on the objections cited by detractors in articles from the Huffington Post, the New York Times, and The Atlantic.

What do you think?  Take our poll and let us know.

Do you support the Working Families Flexibility Act?

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