Magazine Article | March 26, 2012

Managing A Labor Budget Turns Into Real Savings

April 2012 Integrated Solutions For Retailers

By Bob Johns, associate editor

Regional grocer Doc’s Food Stores saves on labor costs by implementing a cloud-based employee management system.

The retail grocery industry is more labor intensive than many other retail verticals. Efficiently managing and scheduling this labor force can represent significant cost and time savings for the retailer. Doc’s Foods Stores Inc., a 66-year-old, family–run, six-store grocery retailer, was facing serious time management and scheduling issues concerning its 250 employees. Managers were spending too much time scheduling, adjusting schedules, monitoring breaks, budgeting departments, controlling overtime, and sending payroll to corporate. Doc’s president and CEO Jim Brown knew that a cost-effective solution to the problems had to be found. In mid-2010, Bixby, OK store manager Kevin Caskey became the guinea pig for implementing a new system at the store level. At the time, store managers did not have immediate access to associates’ time punches; this information was not readily available until payroll wrapped at the end of the week. “To see if someone in the meat department was into overtime, I had to have corporate run reports and forward them to me,” Caskey complains. Managers had no visibility into the current time management system.

A Timely Solution Leads To Big Savings
Instead of having to seek out a solution, the solution came to them in the form of My Ez Schedule, which was being beta tested by My EZ Applications’ managing partner, Sunil Mathew, whom Brown had known for years. Mathew approached Brown to test the product, and Brown was happy to do so. “I agreed to put the product in, because basically I did not want my name associated with something that didn’t work. This way I was in on the development and helped to tweak the product to Doc’s needs,” he notes.

Brown and Caskey worked hand in hand with My Ez Schedule to get the beta up and running right away. Caskey remembers that “The hardest part of the implementation process was keying in the employees.” Once all of the employees were registered, training them on the system was simple. They are able to use a thumb or forefinger to clock in or out on the proprietary biometric reader. Using the biometric readers helped eliminate the possibility of associates clocking each other in or out, also known as “buddy punching.”

Each time an employee punches, the manager and corporate can view it in real time. Breaks can be monitored, lates and overtime can be managed, and actual vs. scheduled hours can be tracked. Managers can now sit down with associates to review the policies right away instead of at the end of the week when payroll is run. The system uses actual wage information for each associate to show budgeted hours and costs. “Ideally, we would like to have labor be 10.5% of sales, but we were running well over 11%,” Brown laments. Most recent figures show a drop to 10.7%. While this does not sound very significant, it represents nearly $150,000 in savings.

Daily sales figures are uploaded from the POS to the scheduling module to give the managers an accurate view of payroll to sales on a daily basis. From there, Doc’s managers can make individual adjustments to department and associate schedules. The solution builds recommendations based on sales figures, so as the system gathers more information, the budgeting and forecasting will become even more accurate in aiding the managers to allocate the correct labor.

Accountability — Management Can See Everything
Brown is enjoying the accountability that the new system offers. “I can now look at a store’s labor position in real-time. If I see any red flags, I can call up that manager and ask them exactly what is going on,” he says. “This keeps the managers on their toes and allows them to discuss labor issues when they happen and are fresh in their minds rather than at the end of a week.” If someone does not take a break or lunch, which could cause the company to be in violation of federal/state laws, the manager, and corporate, can know right away. My Ez Schedule now allows Brown to view all of his stores’ labor whenever and wherever he wants, creating a leaner, more efficient payroll and a more profitable company.

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