Lack of Staff-Level Optimization Can Cost You

When businesses schedule too few people to work they can actually be losing money. And when workers don’t show up for their scheduled shift everything from business reputation and revenues to customer satisfaction and employee engagement can suffer. That’s why we’re hearing so much lately about the importance of optimizing staffing levels and addressing absenteeism.

An article in the current Harvard Business Review says that: “For every dollar a retailer saves on staffing costs, it may be losing several dollars in revenues and gross margin if customers leave a store empty-handed because they can’t find a knowledgeable employee to help them.” The piece by three University of Pennsylvania Wharton School professors goes on to say that resulting poor customer service can lead to further revenue and personnel declines, and ultimately even store closures.

The piece suggests that retailers should optimize staffing levels using historical absenteeism data to estimate the effect of staffing. The professors write “if 30 people are scheduled to work in a store and only 27 come in, how do actual sales compare with forecasts? If they met forecasts, the store is probably overstaffed. If they’re down 10 percent, increased staffing by 10 percent would most likely raise revenues by 10 percent.”

Meanwhile, a survey by The Workforce Institute at Kronos (News - Alert) Inc. looks at perceptions of the effects of unplanned absenses. Fifty-eight percent of those surveyed said absenteeism can adversely impact productivity.

More than half (55 percent) of those surveyed said unplanned absences create manager stress.

Meanwhile, 47 percent said customer satisfaction takes a hit from absenteeism. And 46 percent said it hurts team morale while 42 percent said it decreases store revenue.

Poor employee engagement leads to higher absenteeism, according to The Workforce Institute at Kronos. And its survey results suggest than 62 percent believe a greater focus on work-life balance can lessen unplanned absences. And 59 percent reportedly said workforce scheduling technology can help as well.

Edited by Maurice Nagle