The ongoing debate to increase hourly wages has been well publicized in the labor-intensive retail market. In a recent Bloomberg article, the columnist discusses Wal-Mart's recent wage increase in its attempt to attract and retain a dedicated pool of higher-value employees. The rationale behind this decision was simple: by delivering a greater customer experience through cleaner stores and better-stocked shelves, Wal-Mart leadership hopes to also increase profit margins. While this strategic shift may indicate a larger trend in retail and order fulfillment environments, the ever-present mandate to "do more with less" is still in effect.
Changing personnel demographics are also forcing retailers' hands. As a generation of aging employees is retiring, millennials - who bring a completely different set of expectations for prospective employers - are taking their place. To appeal to this succeeding generation, companies must build more attractive workplaces with opportunities for advancement, perks and, yes, higher wages.
As a result, many companies are opting to offer higher wages to a smaller, cross-functional workforce. Among the many challenges to this approach include:
- Establishing standards with which to measure performance
- Identifying the company's top-performing employees
- Cross-training staff to be proficient in multiple areas
- Maintaining a continually motivated workforce
A labor management system (LMS) is ideally suited to address these challenges. Here's how:
Engineered labor standards. A successful LMS implementation includes the development of labor standards for all tasks in the store or warehouse. This establishes a baseline of performance to which employees will be held.
Employee performance metrics. Understanding what makes the top performers tick and achieve their high efficiency rates can offer actionable insights. The winning habits of these employees can then ideally be replicated across the entire staff.
Training and coaching. Asking fewer employees to do more means they'll have to quickly become proficient in multiple functional areas. By pairing LMS with a voice system, training, coaching and mentoring become integral to delivering ongoing performance improvements.
Employee engagement. LMS helps establish a culture of accountability via its ability to create healthy competition among employees and by incentivizing their performance. Programs can be designed to offer the top performer daily monetary incentives, paid time off or other bonuses.
Without question, utilizing a smaller workforce will require every employee to operate at maximum performance at all times. But without the metrics to continually track employee performance and incentive programs to ensure an engaged workforce, achieving this goal will be a tall order. Intelligrated's GoalPost®LMS - combined with our Voice solutions - can deliver the throughput and accuracy benefits equivalent to a traditionally larger workforce.