Workforce Management: A Workforce Optimized

Payless ShoeSource associates sold 182 million pairs of shoes in 2005. Here's how the retailer will top that without significant addition to its labor budget.

When your department is in large part responsible for achieving three of your company's five overarching corporate goals, making the right operations decisions isn't optional – it's mandatory. Payless ShoeSource's company goals, as framed by its relatively new CEO Matt Rubel, are to offer ontrend, targeted products; to effectively market the brand; to provide a great shopping experience; to run an efficient operation; and to develop a customer-focused organization and infrastructure. Larry Leibach, director of store operations at Payless, is responsible in part for helping his company achieve all of these goals, but he's most accountable for reaching the latter three. When it comes to improving the shopping experience and operations and developing a customer-focused organization and infrastructure, Leibach points to the company's workforce management initiative as exemplary.

Payless began a 23-store pilot of Kronos' Web-based workforce management suite in August 2005 after a yearlong initiative to find a replacement for its proprietary labor scheduling system. The Kronos applications are housed and managed on a central server, enabling single-action updates and maintenance. "With approximately 4,600 locations, we didn't want a PC in the back office of each store, potentially housing different versions of the software," says Leibach. "We wanted to be able to maintain it as a Web-centric application from the home office."

Using Payless' old system, managers entered the associates' hours into the schedule and the system processed the entries, then generated a coverage report that store and district managers could use to electronically track hours worked compared to schedules. The schedules then had to be manually written and posted. The application worked as intended, but left little room for schedule optimization or the ability to create schedules based on historic store traffic and sales, upcoming shipments and promotions, and other work drivers. "It's difficult to create optimized, efficient, customer-focused schedules if you can't take work drivers, those influences that impact our associates' workdays, into account," says Leibach. This was Payless' primary reason for pursuing a new solution. "With more than 25,000 associates, you're always looking for technology that will help you optimize the dollars you spend, which in our case amounts to hundreds of millions of dollars per year in payroll," he says. "We're also seeking to mitigate the inflationary pressures of payroll costs. The ultimate impact on labor costs remains to be seen."