How two retail leaders are building an intelligent workforce management strategy

On the second day of Ceridian’s virtual INSIGHTS conference, Karin Odasz, Director of Retail Labor Planning at Sephora USA, and Matthew Gist, Senior Store Systems Specialist at Designer Shoe Warehouse (DSW) spoke to attendees about how they have continued to deliver on customer expectations, even as those expectations have rapidly transformed.

Both companies have shifted their people operations in three key areas in order to effectively apply labor coverage to meet business demands, while also meeting the needs of their employees.

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Adjusting labor planning to account for changing demand drivers

The COVID-19 pandemic has shifted demand in the retail industry significantly, making it difficult for organizations to properly forecast and plan for labor needs in different departments.

DSW’s Matthew Gist said even though the company was filling a fair amount of online orders pre-COVID, the demand for online orders versus in-store visitors has become even more hard to predict.

“To ensure we have associates in the warehouse zone daily, we fund the hours based on a weekly order total, and then distribute them throughout the week. That way we know we have the proper coverage to process and ship those orders,” he said. “But it is also really important that we have associates available on the sales floor to assist those customers coming in throughout the day. It is important for us to have the right person, at the right time, in the right place.”

Sephora’s Karin Odasz explained that in the beauty industry, they normally have different departments that handle makeup, skincare, and fragrance. But, as traffic has changed at Sephora’s stores due to COVID-19, a more general, consolidated approach to customer service is needed. She said that Sephora no longer has the need in the majority of its locations to have separate departments. Instead, at most stores, the company is consolidating departments into a single general selling function.

Generalizing departments and roles within stores makes it easier for managers to do budgeting and labor planning, as they don’t have to try to predict when certain departments will be busy. “The whole labor demand post-COVID has been an experience of trying to figure out how the traffic patterns are different, and how to look at overall volume versus in a specific area. But it's absolutely made it cleaner, and we think that we have a better demand allocation now that we are consolidating it all rather than piecemealing the labor all over the place,” said Odasz.

Looking towards next year, Gist explains that forecasting for 2021 will be difficult given the irregularity of 2020. “I think especially when we're doing forecasts and plans, the year-over-year data isn't really helpful at this point. I think we'll probably [have to] focus more on what the real-time, current trends look like, and what kind of promotions we are doing,” he said.

Odasz and her team are devising a few different methods for forecasting and planning they can test moving into the new year. “One option is to use the current post-COVID trends, so instead of forecasting every week according to its variance to 52 weeks ago, we're looking at changing the offset weeks to map it to six months before, so that we're mapping COVID business to COVID business. That's one way to do it. Another way is to just go all the way back to 2019 and look at variances to 2019,” she said. “It’s a really fascinating conundrum that we're actually working through [with forecasting]. We're looking at a couple of different options, and we're planning to run it a couple of different ways… to experiment with that and see which one gives us more accuracy.”

Looking ahead, retail organizations need to apply the creativity and agility they’ve demonstrated in the short-term to their long-term forecasting and operational planning. Companies that embrace the rapid pace of change as an opportunity for growth will be able to adapt more quickly, and ultimately drive value for the future.

Cross-training and sharing talent resources

With the structure of both company’s retail departments shifting to favor a more consolidated model that facilitates coverage and agility, the roles that employees fill have also shifted to be more generalist focused.

At DSW, for example, Gist said most employees in the warehouse are now also crossing into the front-of-house retail sales side as needed. In addition, due to the increased volume of curbside pickup orders, cashiers have been cross-trained on how to manage and fulfill those as well. “With smaller budgets and reduced traffic… the zones tend to overlap a little bit more than they did before. Associates now need to be trained with multiple skills to ensure they can be assigned in different zones or different activities,” he said.

Odasz said that at Sephora, a similar generalist mindset is being adopted where necessary. “It started as just a low volume strategy, but now there are so many stores that have shifted volume as we've come out post-COVID, and it’s become more apparent that cross-training and having more of a generalist approach is really the way to move forward in the majority of our locations,” she said.

“Beauty advisors are now able to cover all worlds. It's easier to schedule, and our beauty advisors also feel more empowered to provide the best client service because they know all of the worlds.” – Karin Odasz, Director of Retail Labor Planning, Sephora USA

Odasz pointed out that while traffic to stores in large city centers may be down, traffic to suburban locations is up compared to the demand they normally see. “Within a district there has been a big shift in where the labor demand is. We have a lot of locations in downtown San Francisco or downtown New York where we retained all of our full-time employees, and the traffic is not there anymore. But the traffic has shifted to the suburban areas that surround the cities,” she said.

Sephora has embraced talent sharing as a way to make sure that not only will stores have the people needed to service customers, but that employees will be taken care of and able to work regardless of their main store’s volume.

“Our stores that are less busy than they used to be will share their employees with stores that are starting to have pick-ups in demand and have the need,” said Odasz. “It's been very key to make sure that our employees are getting their maximum hours, so that we can take care of them.”

Cross-training and sharing talent between stores lets companies not only leverage current talent pools more efficiently to meet changing business needs but will also help provide current employees with the hours they need to support themselves. In an industry where talent is valuable and turnover is comparatively high, it is important to not lose sight of the strategic value caring for employees can provide long-term.

Refocusing on flexibility for employees

Caring for employees not only means providing them with sufficient hours, but also giving them the tools and flexibility to manage their scheduling to best fit their needs.

Odasz said when Sephora implemented the Dayforce mobile app for shift swapping, it was incredibly well-received by employees.

“They love it. We rolled it out probably about a year and a half ago, and it was the best feedback that we've ever gotten on any feature that we've rolled out to our employees,” she said. “They love the ability to manage their own schedules, and our managers love the fact that they don't come in to 20 sticky notes all over their desk saying ‘I want to swap out this shift’ or ‘I want to pick up a shift.’ It's made everything so much easier for both our managers and our employees.”

Gist had a similar experience when introducing DSW employees to the Dayforce mobile app. “We were [previously] using paper schedules, so things like updating availability and swapping shifts were very difficult. When we [moved] to Dayforce, we not only got an advanced scheduling tool, but we also gave our associates the ability to do a lot of those things through the mobile app,” he said.

“Because it made their jobs easier, we saw a pretty quick adoption of the [Dayforce] mobile technology.” – Matthew Gist, Senior Store Systems Specialist, Designer Shoe Warehouse

Building an intelligent workforce management strategy that is flexible and agile is crucial for retailers to be able to weather uncertainty and continue to care for both employees and customers. Through using modern HCM solutions like Dayforce, organizations like Sephora and DSW are able to continue to evolve as the industry and environment evolves with them.

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