June 30 2014 - For the first time in years, the news for retailers is looking positive. As a result, employment levels are increasing, with both full time
and temporary contracts rising. Indeed, the retail sector now employs three million people in the UK(1) - and companies are showing strong signs of extending their retail estate;
both in the UK and abroad.
However, organisations know the recovery is still fragile - especially given the economic damage associated with this winter's flooding.
It is therefore essential to impose strong control over employee management processes - from ensuring accurate and timely weekly payment to minimising the risk of
fraudulent over-claiming of hours, understanding trends in sickness absence and maximising employee utilisation.
Roger Moore, General Manager, FMP Global outlines the key requirements for minimising payroll overhead and maximising employee cost visibility
in a continually changing retail market.
Understanding Employee Costs
Staff wages are a significant component of the retail cost base. Yet the vast majority of retailers would admit that information regarding employee working
hours is patchy at best. For many companies, unless proactively informed about absence or overtime, employees will be paid based on contracted hours - and many retailers
simply have no idea just how much over-payment this incurs.
With growing numbers of retailers increasingly looking to cut costs by minimising head office administrative functions and devolving tasks to store managers,
it is essential to ask: what is the best way of imposing greater employee control without over-burdening managers with excess administrative requirements? Or distracting
them from the day-to-day in-store activity?
Relying on managers to collect employee time and attendance information via manual spreadsheets which are then collated and manually keyed into the payroll
system at head office is far from ideal. The process is time consuming, complex, prone to error and extremely unpopular with managers. While it is bad enough to deal with
employees complaining about HR or payroll making a mistake - how much worse for a shop manager if the mistake was his?
Exploiting Time & Attendance functionality within a payroll system drastically reduces the amount of data input required. The system automatically lists
the relevant employees and employee number in each store and populates the information based on each employee's contracted hours. If an individual has worked standard hours,
the manager has to do nothing. The only information required will be lateness, the number of hours overtime worked or sickness absence. Starters are automatically included;
leavers automatically removed - the manager simply has to update the exceptions. The entire process is quick and straightforward for the manager and provides HR, payroll and
finance with an immediate view of the hours worked in each store on a daily basis.
In addition, using self-service functionality employees can update their own address, telephone and email information as required; with some companies even
encouraging employees to update banking details.
Alternatively, if the company uses the Time & Attendance functionality within its EPOS system, that data can automatically populate the payroll solution to
deliver the same insight and avoid any additional administration.
This approach increases accuracy and minimises the chance of employees being overpaid. For those companies paying on a four weekly cycle, it ensures the 13
annual payroll runs for permanent employees plus the additional weekly seasonal payroll for temporary employees at Christmas can be undertaken without incurring significant
manual overhead and risk of employee queries.
Furthermore, it adds essential flexibility in a fast changing retail environment. While growing numbers of retailers are looking to empower managers to take
greater control over employee management, including recruitment in some cases, most know that a blanket 'one size fits all' policy is unlikely to succeed. Some managers may
require more hand holding than others; while many companies may prefer to retain central control over other non-head office based locations, such as distribution. The ability
to deploy diverse working models based on one core payroll solution and employee information database provides essential business agility.
Providing direct, dynamic access to this solution is not just about minimising the managers' administrative burden - although that is an essential benefit. It
is also about gaining far better insight into operational performance at both an individual store level and across the organisation. Detailed information into why employees
have been absent - such as back pain or stress - can provide valuable understanding of occupational health and training requirements. Proactively introducing new equipment,
counselling to alleviate stress or reducing bullying can have a significant impact on reducing days lost to sickness.
Recording not just why an individual was off work but when also enables the business to flag trends in behaviour - identifying those who always seem to be unwell
on a Monday; or employees often off sick on the same day. Providing both HR and managers with this information enables proactive management of individual staff.
In addition, the store managers updating Time & Attendance information on a daily basis gain immediate insight into cost to date this week versus budget; thus
enabling a manager to add staff for a busy Saturday afternoon, for example, if the budget permits, or reducing planned overtime if not.
Armed with this detailed employee information, it is also far easier to add a rostering solution, enabling managers to move away from manual rostering calculations
towards an automated model that reflects each employee's individual working hours. In addition to significantly reducing the time taken to create a weekly roster, the system
enables managers to plan further ahead - helping employees better plan their working lives and, critically, flag up potential roster problems well ahead of time, thus reducing
the likelihood of unexpected absence.
The retail sector now employs around 10% of the UK population. If shop managers are to be tasked with greater day-to-day employee management without affecting
in store performance they need information. By enabling the store manager to update employee working hours daily the retailer will minimise the payroll overhead, achieve a
streamlined and accurate four weekly payment process and minimise overpayment. Furthermore, not only will store managers have far more control over budget and rostering,
but the retail organisation will also have the critical insight required to achieve effective workforce utilisation and support strategic resource planning across the retail estate.