Henderson Group

Knowing the company
Henderson Retail is part of The Henderson Group, Northern Ireland's largest privately-owned company, and operates some 70 SPAR, EUROSPAR and VIVO stores in Northern Ireland.

The long opening hours of its convenience stores means that Henderson Retail has always grappled with premium payroll costs. However, this challenge has intensified enormously in recent years: the minimum wage rate has increased faster than revenue growth, at 53 percent between 1999 and 2007, and staff holiday entitlements have been extended by eight days annually. This put an inevitable upward pressure on Henderson Retail's cost-to-sell by more than two percent. With a recession looming, Henderson Retail realised that effective workforce planning was critical to its ability to sustain a healthy cost/performance ratio.

Defining the strategy
Henderson Retail wanted to optimise its rotas, to improve productivity and service levels while minimising overtime and keeping employees happy.

This was a complicated challenge. Each store has unique trading patterns: those on commuter routes might have spikes in fuel and newspaper sales before 9 a.m., while neighbourhood stores might have a rush on cooking essentials early in the evening. Adding complexity, many employees are contracted on hourly rates, with variable shifts.

Henderson Retail needed a detailed picture of customer flow and purchasing patterns in each store, and the ability to align this with employee skills, availability and rates, as well as regulatory requirements, to enable it to develop cost-effective workforce plans.

Choosing the solution
To tackle the challenge, Henderson Retail asked Torex to use its substantial experience and expertise in the retail market to provide it with a comprehensive
productivity assessment.

Using Torex Productivity Management - a complete, proven performance and productivity management solution - Torex was able to help Henderson Retail establish a comprehensive operating model. This involved working out how employees use their time, how long processes take, and which items sell when
at each store. With this, Henderson Retail could effectively forecast and cost its staffing requirements both company-wide and by store.

Importantly, this first stage highlighted a mismatch between the workload and staff availability in Henderson Retail's SPAR outlets, which was resulting in unnecessary use of overtime.

Henderson Retail was then able to use the labour budgeting and forecasting capability in Torex Productivity Management to calculate accurate labour investment requirements - for the entire year, for 15-minute intervals and for each discrete task.

Torex also enabled Henderson Retail to standardise performance measurements across its locations, and investigate 'what-if ' scenarios for each site's unique mix of people and processes. At the touch of a button, it could account for special events such as promotions and holidays.

The scheduling capability in Torex enabled Henderson Retail to match
workload with staff capacity and requirements - while remaining on budget, maintaining high quality service even during peak trading, complying with HR rules
and regulations, and accounting for employee skills, contracted hours and preferred shifts.

In all, these reports gave Henderson Retail 47,000 data points, which enabled it to re-draw contracts to tightly support its consumer and business profile, while taking into account employee preferences and HR regulations.

Henderson Retail then used the Torex Time and Attendance module to help it monitor its performance KPIs, and decrease costs by better managing absences, overtime, lateness and holidays.

Achieving return on investment
Using Torex Productivity Management has helped Henderson Retail to combat escalating wage costs and a recession, and achieve a flat-line labour cost percentage.

Sam Davidson, Group HR Director, Henderson Retail, said, "With its easy-to-interpret dashboard of critical metrics, Torex has given us a clear understanding of our cost/performance ratios in each store. We can now accurately forecast
requirements well in advance, yet use the early warnings capability to proactively tweak the schedules to sustain service standards while keeping control of the wage budget.

"As a result, we've been able to keep labour cost percentage flat for the last couple of years despite difficult market conditions."

With this and other innovative initiatives, Henderson Retail won Convenience Chain of the Year at both the 2007 and 2008 UK Retail Industry Awards.