Impact of HR Technology Solution in Retail Management
About the Case Study
This case study is about the Human Resources Management challenges faced by a retail organization and the appropriate HR solution to meet these challenges.
About the Client
The organization that partnered with Saigun in the case study is one of the largest retail store chains in the world. They have around 100 retail stores in India in different locations and were looking to expand further to more than 200 stores.
- Organizational Structure
The client had a centralized Human Resource Department located in its head office.. However, although HR processes were managed centrally, many HR tasks, policies and procedures were controlled by retail store managers or regional offices.
- Current HR management Process
The client used excel sheets to exchange and compile reports from various regional offices and store. This was performed by a team of HR executives in the main head office.
Applicability of the Case Study:
This case study is equally applicable to organizations having retail chains in Consumer Goods, Health Care, Multi Locational sales offices etc.
Challenges Faced by the Retail Industry
The senior HR Manager at the client side revealed that there were many administrative and HR issues with the retail store sites. Due to high focus on sales, the Retail Store Managers has no time to focus on issues like attendance, discipline and critical HR practices. The problem areas that were identified during the discussions were:
- Challenge 1. Irregularities in the attendance data of the staff at retail stores and other regional offices. Sometimes many of the staff did not sign the attendance register or signed intermittently. During HR audits it was found that some staff signed the attendance register only at the end of the day. Further, sometimes staff signed the register and then left their post.
- Challenge 2. There was no mechanism to track the leave data of employees. Employees did not know their exact leave data. At the end of the year it was revealed that some employees have taken excess leave while some employees worked incessantly, creating frustration among staff.
- Challenge 3. Discrepancy in HR reports: HR provided a set of excel sheets and paper-based forms to help store managers maintain data. However, many store managers used and made unique formats of reports making it difficult to collate the reports. The data thus collated had to be verified over again and again, as there was a tendency for errors to crop up.
- Challenge 4. Salary discrepancies: HR and attendance data was used to generate data for payroll. As there were many discrepancies in HR data, these also found their way into payroll data. This created several salary discrepancies and caused numerous issues among the employees, thus lowering employee satisfaction rate and affecting the employee morale.
- Challenge 5. Mismanagement of employee expense during travel etc. There were lots of travel activities in the organization but the expense data that reached the head quarters was based on the individual employee’s feedback and there was no mechanism to verify the validity or requirements of the travel. There was no policy based approval mechanism for travel and expenses, which was also beginning to affect the client’s budget.
- Challenge 6. Training and communication issues: As the company was growing at a fast pace, training employees on various HR procedures and policies was becoming increasingly difficult. Thus employees took decisions based on their previous experience or personal insights and created unnecessary hassles that required HR intervention.
Impact of challenges
The above challenges affected critical business metrics like availability of staff at the stores, customer service, professionalism, and financial issues like unnecessary expenses, lowered sales and poor customer experience.
Analysis of the Problem
After identifying the challenges, a stream of discussions were conducted by the Saigun’s team of project managers, analysts and HR consultants with the client’s HR and operations managers. These discussions churned out the following as the top 5 reasons of the problem:
- Lack of consistent HR systems across the organization.
As the operations managers came from different domains and industries, they brought different practices with them and felt comfortable in applying the same to their current organization.
- Lack of consistent, recorded log, and communication mechanism:
There was no reliable feedback mechanism for HR to communicate policies, changes in processes and training for employees and managers. As a result, many employees remained confused about HR issues.
- Lack of proper tools for collaboration between HR managers and employees:
Neither employees nor the manager had appropriate and simple tools to follow HR practices and policies. The client invested more time in improving existing systems rather than exploring the possibility of a new solution. They were reluctant in partnering with HR and considered HR to be a hindrance to their routine jobs.
- Delayed reports when making business decisions:
The HR reports were often delayed or completely ignored while making business critical decisions.
- Lack of accountability:
As there were no job descriptions, SMART goals, or other work-flows for managing human resources, managers and employees did not feel accountable to HR.
On the basis of extensive discussions with the client, Saigun suggested the ‘EmpXtrack Professional Edition’. This is a state-of-the-art solution for managing Human Resources by automating significant functions. With Professional Edition organizations can manage employee data, extend HR services to employees and managers, and evaluate performance of employees using a web based appraisal system.
As the client was completely paper based, migrating instantly to an online system would create change-management issues and leave employees unprepared to use the new system. As a result, Saigun and the client decided to implement the HR technology solution in two phases.
First Phase: In the first phase, the client introduced the online Employee Database and Employee Self Service. This helped them to painlessly switch from current traditional practices to a paperless global HR system. The web-based Employee Database helped the organization’s HR Department to slowly absorb the benefits and challenges of online management. Employee Self Service used its functions such as online leave approvals, travel and expense management and personal data updates to slowly transform HR practices.
Benefits of First Phase:
- Painless Change Management: The simplicity of the solutions did not cause much training issues and also eliminated confusion among employees. The simplicity of the solution helped streamline the change process and was incorporated by the organization with minimal resistance from employees. Within 3 months the usage of EmpXtrack system reached 90%.
- Accuracy of employee data: By using the Self Service mechanism, employees helped HR to change the data accurately and effectively. Three months after implementation, the client found that 99% of the data was accurate.
- New employee induction: All new employees joining the organization were instantly added to the employee database and then used self service to provide further data.
- Accuracy of payroll data and salaries: Correct leave data was available to the payroll department, allowing salaries to be transferred accurately.
- Decrease in travel expenses: Most travel expenses were approved using a pre-defined process. This resulted in higher accountability for expenses incurred during travel and other related activities.
- Increase in employee availability: Due to increased accountability of managers in implementing HR policies and improved morale, there was a significant upswing in employee availability and by extension, overall productivity.
- Better MIS reports: Instant reports were available to HR and the client executives to help in making critical business decisions.
Second Phase: The second phase is still underway. The second phase will focus on Performance Management to measure and improve employee performance and meet organizational goals. A goal setting process will be initiated for all employees for a specific period, at the end of which, employees will face a fair and accurate appraisal process.
The impact of HR Solution
EmpXTrack helped the organization implement their HR policies and procedures effectively. Appropriate and accurate data became available to the management to make objective decisions while employees were more satisfied with company as a whole.