| Home Page: www.ProphecyWatch.biz Wal-Mart 'Optimizes' Workers January 5, 2007 By Jennifer Zaino Source: http://www.bitaplanet.com/business/article.php/3652126 Retailers implementing advanced scheduling systems to improve the customer experience and cut labor costs may face unintended consequences. Wal-Mart Stores Inc. has long been intent upon using technology to enhance the customer experience. But does its latest effort risk disrupting the employee experience? Even if you believe that corporate behemoths don’t care about the individual worker, they should care about potentially losing future leaders. Earlier this week, news broke in the Wall Street Journal that the nation’s largest private employer is deploying a new computerized system that will change the way it schedules its workforce hours. The system will use data to determine the busiest times of day for stores, in order to have the optimal number of workers available to service them. Some analysts, according to the WSJ story, say this will result in more irregular part-time work for employees. It’s natural for retailers to want to embrace technology that will make the sales experience more efficient and effective for consumers. “They are trying to figure out how to invest to improve the customer experience,” says Forrester analyst Nikki Baird. No doubt it’s doubly appealing if a technology investment can do duty on two fronts: Enhance the customer experience and also produce savings by taking labor out of the pool of fixed costs. After a less-than-enthusiastic December buying season, such investments may begin to look even more appealing to retailers. According to the International Council of Shopping Centers, December same-store sales rose 3.1%, vs. a 3.5% gain for the same month last year. Optimization, or Unpredictability? According to the WSJ story, Wal-Mart says it’s not using the system in order to try to schedule fewer workers. But the story raises the point that such labor optimization systems could make life unpredictable for employees, who may not be able to count on making a certain income per month, or be able to plan child care, or consistently work around a school schedule. Of course, Wal-Mart isn’t the only retailer investing in such systems, but the deployment — and its potential implications for more than 1 million employees and the retail giant itself — will be particularly interesting to follow. A simple click-through of the walmartstores.com site will shed some light on why. A “Did You Know” box on the Careers section cites this figure: “76% of our store management started in hourly positions.” Here you also can read associate stories, like the one about Darrin, a market manager for Sam’s Club who went from a part-time associate to help pay for college to managing nine Sam’s Clubs 18 years later. Or Mindy, who started working in Wal-Mart at age 16 as a cashier and is now a compliance manager. Or Rhea, who worked in a Georgia Wal-Mart while attending college as an hourly associate, and is now a market fashion manager. These are inspiring stories, to be sure, and they reflect the Wal-Mart culture of helping to grow leaders from the ground up. The details on how Wal-Mart will use the system have yet to emerge, but the deployment itself makes one ponder: Would these folks — or hundreds or thousands of other associates like them — who’ve moved up the ladder from store cashier, service or stock positions, have been able to make that leap if their work lives were at the mercy of an advanced labor scheduling system? Would they even have been able to afford to stay on the job if they couldn’t count on something close to a steady income or something resembling a set schedule? Even if they could manage that, would they have missed opportunities to learn more about what makes Wal-Mart tick — and how they could positively influence that — because they were no longer scheduled to work much during the slow hours? It’s not in the heat of a customer rush that a manager might have the opportunity to help mentor a sales clerk or stock-boy who shows interest and aptitude for the retail business. Whatever bad press Wal-Mart gets for some of its policies and practices, the company’s focus on developing its talent was evident a few years ago, on a site visit to its headquarters. At the time, the company was working on a system to make it easier for employees to disclose their special talents (such as foreign languages) or goals so that the retailer could help them realize their ambitions, whether it was to work overseas or get training. That’s the kind of business-technology effort that pays dividends for workers as well as employers. Labor optimization software has its place, no doubt, but it would be a shame if business and tech teams reach alignment on this front, only to deprive the organization of developing its future leaders. |