Customer voice: Towards forecast-based workforce optimization

Nov 13, 2019 4 min

Stockmann, Finland’s leading department store, has been using RELEX’s forecasting and replenishment system since 2011. Like most retailers, Stockmann wrestles with the rapid changes disrupting the sector. That’s why in 2018, they extended the collaboration by introducing RELEX’s forecast-based workforce optimization solution.

Staffing costs comprise one of the biggest cost centers in retail. With the right system and smart algorithms in place, though, retailers can optimize work shifts for each department based on 1) customer volume per store at any given time of any day, as well as 2) what products they will likely purchase. By using customer footfall and sales forecasts to accurately match staffing to actual workload, retailers can reduce excessive staffing costs while improving customer service and employee wellbeing.

In this Customer Voice blog, Suvi Ragnell, Stockmann’s Head of HR Services and Digitalization, and Tiina Siurua, team leader for Stockmann’s shift planners, discuss the changing dynamics in retail workforce management — and how they are managing the change from manual to optimized workforce planning.

From Manual to Optimized Workforce Management

Before we introduced RELEX’s workforce solution, our work shifts were quite regimented, and workforce management was based on a structured approach. We had morning, day and evening shifts, but little understanding of what criteria should determine these shifts, whether they were well-organized, or even whether they were necessary at all.

At Stockmann, shift planners are responsible for the entire workforce management process, all the way from planning shifts to producing hourly budgets and payroll material. Before, workforce management was very much based on these planners’ own (largely manual) work and assumptions.

Given the considerable amount of data companies can now gather from employees and business operations, that individual, manual approach no longer makes sense. With the new workforce optimization system, we’re aiming to use all of that rich data in our decision-making.

Our goal is to be able to access all of the data that influences workforce optimization in one place. That data visibility will allow us to make smarter decisions about each task, including optimal timing, who should complete the task, and where and how it should be executed. These important decisions shouldn’t be determined by who happens to be on hand at a given moment; they should also reflect the tasks that need to be carried out. Using this approach, we can optimize work shifts on a 15-minute level of detail based on demand forecasts.

At the same time, we have greater visibility into the whole balance period — normally a 17–18 week period — so we can better prepare for upcoming changes in staff needs or capacity. For example, if we see that a number of temporary contracts are due to end in the coming weeks, we can start proactively recruiting new employees.

Power Shift from Employers to Employees

If we think back 10 years, employees had little room to set conditions for their employers. More likely, they just took the shifts they were given and planned their lives around them. This dynamic has been completely transformed, though. Today, employees can place greater constraints on employers regarding their availability, and that makes workforce optimization even more challenging.

When it comes to creating a positive employee experience, flexibility is key. The ability to influence their own works shifts goes a long way toward improving employees’ work-life balance. From a workforce management perspective, we’re constantly trying to balance our employees’ preferences and our business needs, and we want to combine them in the best possible way. Currently, we allow for two “wishes” per week, and so far, we’re proud to have been able to fulfill these wishes almost perfectly.

But shifts aren’t the only place where employees look for flexibility — our employees also wanted the ability to check their shifts easily wherever they are. After all, nobody wants to use their free time to go to the store to check their shifts. Our new, modern system will allow employees to check their shifts on the go so they can make full use of their time away from work.

Managing the Change

Whether big or small, there are always a few hiccups when you change the way people work. These hiccups are far less likely to be about the system/technology itself, but more about the cultural change.

Historically, our employees have been used to a very structured work shift pattern. Because we’re now optimizing shifts to meet forecasted demand, we’ve felt some growing pains as it’s disrupted the established pattern. For example, an employee used to working 7.5 hours per day may be surprised to find that work shifts can now vary in length and time.

It has been crucial for us to engage our employees in conversations that clearly explain the reasoning behind these changes. When people understand the “why” behind changes, they are more willing to embrace them. We’ve asked our employees to come to terms with the fact that shifts can’t be as regimented as they used to because retail is undergoing massive changes that follow from changing consumer behaviors.

A second challenge that arises from the new, less regimented shift patterns is the question of fairness. Work shifts can vary quite a lot, and employees are conscious of the need for equal treatment. The “desirability” of working hours can be a very subjective judgment. We encourage all employers to think long and hard about how to determine fair, equitable shifts despite the difficulties of modern workforce management.

Despite these challenges, our new system is valuable for both our employees and our business. We can make better decisions faster and based on our actual needs, and our employees will be much happier due to improved shift flexibility and visibility. As a company, we are far better equipped to deal with the challenges our industry is facing.

Written by

Tiina Siurua

Team Leader for Stockmann’s Shift Planners

Suvi Ragnell

Head of HR Services and Digitalisation at Stockman