From November 2007

By M.V. Greene

As vice president of finance for the hip Anchor Blue youth apparel chain, Andy Boada is constantly on the lookout for ways to reduce costs. Much to his satisfaction, Boada found measurable savings as the result of a switchover to a new web-based workforce management system.

The workforce at Ontario, Calif.-based Anchor Blue’s stores is typically in the 20- to 25-year-old age range; some part-timers are as young as 16. (“Catch the vibe!” screams the headline on the jobs page of the company website.)

“It’s a fairly young group,” Boada says. “You have to be able to reach them, speak to them, connect with them in a way that is more than just ‘this is a job and this is a paycheck.’ You’ve got to keep these kids engaged.”

Most of the company’s 237 stores are located in the western states and Florida, and the youthful staff is merely a reflection of the customer demographic.

“We’ve got the music playing in our stores,” Boada says. “We’re casual in our approach and we’re casual in our dress. We don’t want to be overbearing with a lot of rigidity and formality; that wouldn’t necessarily coincide with the workforce and our customer base.”

Automated workforce management processes represent a key tool the chain is using to manage productivity and ultimately drive customer satisfaction and sales, he says. Scheduling, budgeting, analytics, absence management and talent management all come into play and, while the company’s workforce may be young and loose, Anchor Blue can’t afford to be lax in its processes.

“We want systems that will provide all the controls that are necessary for being a good operator,” Boada says.

Boston-based market researcher Aberdeen Group reports that automated workforce management systems have helped organizations achieve ROI ranging from 25 percent to 450 percent or more.

Metrics that outline savings include labor cost as a percentage of sales, overtime as a percentage of total labor hours, direct turnover percentage and absenteeism percentage, the report says.

Real-time tracking
Organizations that focus on achieving real-time tracking of labor schedules and timekeeping and attendance at the single employee level will realize the greatest opportunity for cost efficiency, according to Aberdeen.

Anchor Blue selected the Kronos for Retail Workforce Management system from Chelmsford, Mass.-based Kronos and has been using it for two critical time and attendance functions since its launch in August. One reconciles employees’ time accounting; the other closes the pay period.

The system allows Anchor Blue to automate the labor-intensive, error-prone processes that come with tracking time and attendance while administering and enforcing complex attendance policies.

In overtime, for instance, Anchor Blue is able to control the function via software that tracks time and attendance at every level of the business. Having that data empowers store managers to make better staffing decisions and control labor costs.

As any good retail finance executive knows, increased sales or reduced operating costs can quickly justify an investment. Boada estimates that each Anchor Blue store is saving 45 to 90 minutes each week as the result of the new Kronos for Retail system.

“Now I’ve got managers in stores able to [spend that extra time] helping employees train on processes or helping customers on the sale of product and not doing back-office administrative work,” Boada says.

“That’s what we’re kind of excited about … an hour-and-a-half on a weekly basis is a lot of training you can do to see that the associates are doing their jobs properly.”

Based on results so far, Boada is estimating that Anchor Blue will reap annual savings of $200,000 through increased productivity and will achieve ROI within eight months.

The Kronos system is configured for flexibility so that organizations can hire and deploy emerging, remote workforces that are driven by demand and business strategy.

Rapid growth mode
“In a rapid growth mode” – Anchor Blue expects to double the number of retail locations within the next several years – “time becomes of the essence,” Boada says. “You have to be able to organize and plan out how you’re going to bring on an average of 25 to 30 people to open up a new store.

“Multiply that out by however many new stores you have going in at any given time, and you are going to need systems in place to minimize the amount of manual processes.”

Labor costs remain a retailer’s largest controllable expense, and the primary objective of workforce management solutions is to ensure that employee scheduling is aligned with customer demand.

”They have to manage those actual costs effectively against their budget,” says John Anderson, global practice leader for retail at Kronos. “This is more true in retail than in any other business. Anything that increases output or reduces costs increases productivity.”