Sep 22, 2015

Evolving With Expanded Overtime Regulations

The White House’s recently proposed overtime pay rule, which would raise the wage ceiling for time-and-a-half pay from $23,660 to $50,440, has few fans in the retail industry. Middle managers – including store leaders and shift supervisors who often spend extra time overseeing hourly employees – frequently fall within this salary range, a reality that can quickly eat into corporate profits under the suggested regulations. Many retailers have scheduling policies in place to mitigate overtime expenses from hourly workers, but may be less prepared to contend with overtime obligations for store managers that often work more than a forty-hour work week.

Already accustomed to operating on razor-thin profit margins, retailers will need to find new ways to keep their labor costs manageable, maintain regulatory compliance, and avoid passing on these costs to customers. This means updating technology, reducing managers’ workload, and ensuring that labor spend companywide is being used most effectively.


Lighten the Manager’s Load

From employee disputes to scheduling to budgeting payroll, there’s no debate that managers have a lot on their plate. While managers are most valuable when they’re facing customers on the floor, much of their time is spent serving as moderators between head office management and employees in one way or another because the necessary reporting and communication channels do not currently exist.

By implementing an integrated employee relationship management solution, like WorkJam, that engages employees in self-management in a controlled, recorded environment, retailers are able to reduce the daily responsibilities of managers while fostering a more connected employee base. Adopting such a platform will allow employees to conduct trade shifts, complete training sessions and provide employee feedback in one central hub that head office management has access to. Not only will managers be able to focus on more strategic and customer-facing business tasks, but retailers will also benefit from a more engaged workforce.


Eliminate Manual Processes

Scheduling is an unnecessarily time consuming responsibility for managers. This is largely due to the fact that 67 percent of managers still manually make schedules with pen and paper or spreadsheets. Beyond the basic mathematical puzzle of putting people in the right shifts, the sheer quantity of different communication channels managers currently use to get employee availability (from text, to email, to handwritten notes, to phone calls) make creating and adjusting schedules an incredibly slow moving process.

Now, that managers’ weekly hours will be limited, retailers should consider implementing a system that can automate schedule creation, communicate that schedule to employees, and facilitate shift changes smoothly without involving third-party communication channels. By implementing the right platform, retailers can not only speed up the scheduling process, but also enable better tracking of day-to-day operations and retain more control over processes.


Ensure Labor Efficiency

With rising overtime and time constraints on managers, retailers have even less wiggle room with their labor spend, and it’s more important than ever for store operators to deploy data-driven models for their staff allocations. Labor accounts for 20 to 70 percent of a retailer’s total expenses, so every opportunity to fine tune their operations can have a major impact on the bottom line. By harnessing data from inputs like historic demand trends, omni-channel sales, and employee availability, employers can ensure they are scheduling the right people at the right times, and avoid overspending on unnecessary hours or understaffing and watching customer service levels drop.

Regulation changes like this one can feel like an uphill climb for retailers, but with the right approach, retailers can gain a competitive operational advantage by streamlining operations, updating processes from the ground up, and maintaining records for head office.

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