The Right Labor Model for Workforce Management

Workforce Management software is a critical tool that retailer’s use to manage their largest expense and their most important asset …people. Part of a successful implementation is ensuring they have a labor model that accurately predicts and allocates hours to meet the needs of the business.

Build your labor model right, using proven professionals with a solid methodology and toolset capable of a successful implementation of a high performance labor model.


Every project starts with an assessment of current operations to find opportunities to improve operations (low hanging fruit). Simple changes like improved stockroom organization or changing a truck delivery schedule can make a big difference in efficiency with little or no implementation cost.

It’s important to find the correct mix of sample stores for the analysis. The sample has to account for variations such as; store size, constraints in stock rooms, and high variations in sales per square foot. For a large chain this sample may include as many as 6 to 10 store types.

Determine the Work Drivers

The work drivers are determined by examining the sources of work in the store. In a retail store, the most important driver of work is your customer and the customer experience. By working backwards from the customer, the level of customer service and the events necessary for the right customer experience are determined.

Typically, the other significant driver of work is inventory. Receiving, processing merchandise, presentation, markdowns, and recovery represent most of the work. The complexity of presentation, the number of SKU’s and the type of merchandise become the key drivers of inventory work.

Improve the processes

Never set a labor standard against a bad process. That’s the golden rule of developing a high performance labor model. Every process has opportunity for improvement. Determine the gap in each process versus the industry best practice and categorize the gap as simple procedure, technology, or physical constraints.
A process improvement report will detail the opportunities and quantify the impact of the change. These changes can then be incorporated into the labor model.
“One of the most important byproducts of developing a high performance labor model is the identification of opportunities to improve the customer experience or increase process efficiency.”

Measure the Work and Set the Standards

The sample stores are used to make observations of the labor processes, associate activity, and customer interaction. These observations become part of the quantification of process improvement opportunities. These observations are made by using process video through the WorkBuilder tm Tablet App. The WorkBuilder tm Tablet App makes it easier to maintain labor standards and integrates seamlessly with the WorkBuilder tm Task Generator and Demand Curve App.

Pilot the Improvements and The Standards

The process improvements and the labor standards should be tested and sharpened by applying those changes to pilot stores. The pilot process helps with change management by proving the validity of the labor model in real stores. It becomes important to demonstrate the benefits of the model through real results. These pilot stores become opinion leaders in the organization and can become centers of innovation.

Implement the Labor Model

The labor model is finally implemented by integrating with the WFM package to create the demand curve for each location using forecast data for each main work driver applied against the labor standard. This demand curve is balanced against the financial budget KPI for each location. The selected financial KPI’s are usually Sales per Associate Hour, or Payroll % to Sales, although other KPI’s can be used.

The Results

Finally, the new labor model should achieve the objectives of the organization by providing the precise balance of customer service, labor efficiency, and financial control. The result of this project is usually 10% or more improved labor efficiency with a positive impact on customer service.