Managing labor costs in the grocery business has always been a challenge. Until recently, scheduling and timekeeping were more of a manual operation, with managers relying on experience and gut feelings to build employee schedules. In addition, timekeeping in many stores fell under Human Resources instead of operations, which created a disconnect between what was happening in the store and what happened on the timecards.
While timekeeping automation became available in the grocery industry and improved the situation somewhat, there was still a disconnect between payroll and sales data. Early time clock software systems were standalone and didn’t integrate with any sales data. This might not seem like a big issue, especially for a single store operation, but this kind of disconnect can become an expensive problem when you’ve got 50 stores. The apparent solution is to integrate the point of sale and employee time clock software, but does the ROI on such an effort merit its cost?
The cost of “the way we’ve always done it”
Managers who rely on past experience rather than data to create employee schedules are more likely to schedule in a way that seems to make sense, instead of basing decisions on what actually happens. For instance, a manager might copy last week’s schedule because they assume this week’s sales are going to be about the same. However, without sales data there’s no way to know if that’s true or not. This false assumption often results in scheduling either too few or too many employees to handle the customer traffic.
Those little scheduling mishaps can significantly raise labor costs. Overscheduling results in paying for employees you don’t need. Underscheduling, on the other hand, can lead to a higher turnover rate, as employees have to stay longer than their shifts and end up feeling overworked. Since grocery employee turnover can be as high as 150 percent a year, and replacing them can cost almost a 1,000 percent of an employee's weekly pay, most managers will do what it takes to reduce that cost. That means replying more on sales forecast data to create employee schedules and less on the way they’ve always done it.
Integrating sales data into the equation
Fortunately, managers now have time clock software options that can be tied together with sales data from the point of sale (POS). These systems can typically suggest a schedule based on sales data as well as other metrics such as your budget, preferred shifts, and part- or full-time hours. Managers can make schedule adjustments if they need to, but overall, they’re utilizing hard sales data to make scheduling decisions to optimize staff coverage.
One way to implement time clock software is to have your IT team build it. While this is often the first option considered, it almost always turns out to be much more expensive and takes more time to implement. Plus, if you outsource the project, this system may be designed by someone whose expertise isn’t in grocery, so it often doesn’t pull the right data necessary for optimal use.
A better option is to use a product or a service provider that specializes in grocery timeclock software. This Software-as-a-Service (SaaS) option is generally faster and more cost-effective than outsourcing to build a custom integration solution. Another benefit of SaaS is that it’s less expensive at startup and requires only a monthly fee to access to the software. This recurring operational expense can be a lot easier to build into your finances for the year, rather than coming up with a large initial capital outlay.
What you’ll get from integrated time clock software
When stores install integrated time clock software and put in the effort recommended by their service provider to properly use it, they should see benefits immediately.
The system’s immediate benefit is transparency, telling you exactly what's going on in your sales as it occurs. This allows you to make adjustments to your labor staffing as you need to. Proactively scheduling appropriate staff coverage can translate into significant labor savings. In fact, when stores couple this system transparency and schedule enforcement using time clock software and biometrics, studies show they see an immediate 4% labor savings.
Thanks to current technology, you no longer have to buy all your software from one vendor to ensure it functions together. Modern software programs have the ability to integrate software from different vendors using APIs that let them work together. Many of these apps can be viewed online, eliminating the need to install software on a retail store’s servers, PCs or mobile devices. This lets businesses can pick and choose the best version of software for their stores, instead of waiting around for an all-in-one package to come along.
Doing it the way you've always done it just doesn't cut it anymore
While integrating your time clock software with your POS does have a price, it’s fairly easy to justify the expense. With this integration, your grocery managers can use sales data direct from the POS to create the optimal employee schedule, allowing them to maximize your labor force and minimize costs. With the competitive nature of the grocery industry, you can’t afford not to invest in integrated time clock software.
TRUNO’s integrated Point of Sale solutions can help use real-time sales data to cut your grocery labor costs.