Good, Bad and Ugly Shadow Atlas Labor System

A Sept. 9 Wall Street Journal article on Ann Taylor's new computerized workforce management system — Atlas — drew media and retail buzz, as well as questions about workplace ethics.

Industry experts at Retail Wire, an online discussion forum, weighed in with the pros and cons of such systems, which are now part of any large grocery chain's operation and used primarily for scheduling. Such systems work to cut labor costs, increase productivity and ensure compliance with labor laws. The investment in such systems can be made up within a year, Tom Murphy, president, Peak Tech Consulting, who consults for the grocery industry, told me. “All work well and produce results,” he said.

“Retail labor scheduling is not rocket science — it's harder,” said John Anderson, director of retail marketing at Kronos, a company that provides workforce management consulting and solutions. The impact on productivity, customer service, labor cost control and employee satisfaction can be considerable, he said.

As the WSJ story described, Ann Taylor's use of the technology, which delves deeper than others into performance metrics, calls into question the company's image as a good employer, its workplace culture and its impact on employee morale.

The fashion retailer uses the system to cut labor costs and boost sales by mining its talent pool to place the highest-producing sales associates in prime-time traffic periods, while the hours of those with less sales per hour are scaled back or rescheduled to slower time periods. Results for the retailer were positive. Executives reported increased comparable-store sales. More shoppers were converted into buyers. Managers no longer devote long hours to writing employee schedules.

Results for some associates were less than desirable. They were pitted against one another in a competitive battle to ring up sales from shoppers browsing for goods. Those who didn't meet performance standards of sales per hour saw their hours scaled back and their schedules reshuffled to off-peak hours. As a consequence, these associates — most part-timers — saw smaller paychecks.

Comments voiced by some of Retail Wire's panelists, who questioned the impact of micromanaging employees and their schedules via automation, were: “It takes a bite of the humanity out of the job”; “[Workforce becomes] an expense item to be minimized, optimized or dehumanized”; “None of these programs ever evaluate the human portion of the equation.”

Murphy said he believes Ann Taylor is walking a fine line in how it uses its labor scheduling technology. “There is nothing inherently evil with the software. I can use it for good or for bad.”

A measurement to add to the process is employee turnover. According to a 2002 KPMG study, employee turnover in the U.S. supermarket industry represents $5.8 billion in lost productivity and hiring costs annually. Remember, cashiers — which make up 34% of supermarkets' workforce — are the last contact customers have with store personnel on a shopping trip. Unhappy employees, as Wal-Mart knows, can be detrimental to a retailer's public reputation and image. Satisfied employees are critical!