Getting Started on the Path to Better Labor Management

By Dan Bursik
VP, Best Practices

It can be a daunting mission to take your company from old-school labor management practices to understanding and allocating labor as a valued resource deployed to deliver strategic sales, merchandising and service objectives that fit your brand. Where to start? What to do first? How to prepare the business for change? How NOT to get shot as the messenger?

First, cut yourself some slack. One of my valued friends and former colleagues put it very well for me when he said, “Things are the way they are because they grew that way.” Understanding that at one time almost every grocery business, and many businesses in general, started with limited metrics and less sophisticated ways of understanding, planning or scheduling labor – far behind the optimized potential of what you can envision today based on better software tools, best methods and engineered labor standards – illustrates that the journey is not only possible, but that many organizations have navigated big steps forward with significant success.

So if your organization is caught time-warped using only Wage Percentage or Sales per Hour (SPH) to plan its most important controllable expense – and the lifeblood of your brand – rest assured your organization has much to learn and great benefits to gain. Let that knowledge motivate and energize you. It’s not an easy journey but there are proven successful paths of change management to reach milestones of success and benefits.

While every starting point is somewhat different, here are some of the things you need to muster fairly early in the process:

  1. Executive Sponsorship to create or carry the vision, to articulate the needs, and to engage stakeholders in considering then embracing better approaches.
  2. Knowledge of the components and tools needed to foster work content based understanding of labor. Ultimately, you need a capacity to create an effective Labor Model that can be contoured to your brand and support the outputs for planning, scheduling and results reporting.
  3. Business reporting to create a common version of the truth on labor performance is essential. Be sure to include old metrics as well as new metrics. No one should argue that Wage Percentage, Sales per Hour, or Average Hourly Rate are not important metrics. Your goal is to help them understand that they just aren’t the best metrics to steer your ship by. Old metrics and new help people better understand the new approach and transition their thinking.
  4. Stories or illustrations that people can relate to that show the limitations of Wage Percentage or Sales per Hour thinking versus real world experience. Talk to any Meat Manager who has worked stores in a range of markets and they can speak at length about the SPH attainable in country club markets where high ticket items sell well. But talk to them about the workload in less affluent communities where the work content of the sales involves cheaper cuts, value portions, thinner steaks, smaller roasts, etc. and the absurdity of using similar SPH values across such stores is obvious. Do you expect cashiers to meet the same front end standard when one store has an average item value of $3.50 and another is at $2.75? Would you ask a small volume store in your organization to match a larger store’s Wage Percentage or SPH with much less sales to support similar fixed labor commitments? These are examples you will need to call upon to help people understand. Remember, to make the journey most people need to understand why – what’s in it for the company, and what’s in it for them – and to see the better path forward.
  5. And don’t forget the magic ingredient that all good labor managers need: tenacity. Rome wasn’t built in a day and neither will your transformation. Look for incremental steps. Don’t demand perfect, but make progress happen. Focus on what matters most. If your resources are limited, by all means: narrow the list and get something done. But build on accomplishments; help people understand them, quantify the gains, and do your best to identify and recognize the local heroes in stores that make it all happen.

Finally, don’t think you will ever be done. You won’t be. The path toward optimization is all about continuous improvement. But one thing is also certain: from where you are standing now I guarantee that you can’t see all of the potential that you will see tomorrow, especially if you can make your steps today count.