Operations - Scheduling to Maximize Payroll Dollars

We've all experienced it.  It's 3pm and we walk into a store to find three employees standing around chit chatting, talking on cell phones and altogether ignoring us.   What are three employees doing working in a specialty store in the middle of the afternoon (the deadest time period in retail)?  That's an easy one -- someone who doesn't know how to schedule employees is scheduling employees.

Scheduling is one of the easiest operational issues to conquer in order to maximize your payroll dollars. 

THE REAL WORLD TAKEAWAY
Sharpen your pencil, get out your calculator and pay attention because Scheduling 101 class is in session.  This will seem a little complicated but it's quite simple.

1.    Determine you hourly needs.  Take out a piece of paper and label each day of the week across the top.  Now for each day, write down the hours your store is open (9-9, 9-9, 9-6, etc.) and underneath that, write down the total number of hours the store is open each day (12, 12, 9, etc.).  Finally, list your store's busiest time periods for each day (for most retailers it's over the lunch hour and after work into early evening.  Be exact (e.g.11:30a-1:30p, 5:00-7:30p).  We call these peak periods.  The rest of the time is known as non-peak.  Total and label your peak and non-peak periods at the bottom.
2.    Determine your people needs.  How many employees do you need to service your customers during peak periods (e.g. three employees) and non-peak periods (e.g. 1 employee) for each day?  Label and list those numbers at the bottom.
3.    Total your hours.  At the bottom you should now have [by day] the total peak hours and the number of employees needed for each peak period and the total non-peak hours and the number of employees needed for each non-peak period.
4.    Now do the math.  Simply multiply the employee hours needed by the peak and non-peak hours and you'll have the total payroll hours needed for each day and for the week.
5.    Check your math.  Take your total sales for last week and list the percentage of sales for each day.  Now do the same for your hours - take the total hours and find the percentage for each day.  If you estimated the employee needs correctly the percentages should be close -- and that's how you know you're maximizing your payroll dollars.
6.    Fix any errors.  If you percents are way off, then you're not maximizing your payroll dollars and chances are the three employees standing around chit chatting and talking on their cell phones and working for you -- it's too many people on the sales floor for the sales volume.  Adjust the hours and/or number of employees needed to bring the percents more in line.

Sometimes there are special needs (e.g. two employees must be present at store closing, shipments come on Mondays so you need an extra employee).  Just keep this in mind when looking at your percents.

Now you have the right number of employees to service the in-store customers during peak and non-peak time periods, leaving your customers happy.  And you, as the owner, you should be even happier because you can leave knowing that you've maximized payroll, one of biggest expenses a retailer has. 

More on scheduling in my next post…