3 ways to improve
operational efficiency  

What do successful retail and hospitality companies have in common? They’re focussed on improving operational efficiency. Let’s dig into their reasons, methods, and how they’re using technology to their advantage.

Operational efficiency measures the relationship between your business inputs and outputs.  

Inputs are the resources needed to keep your business running. That’s everything from hours worked to wages to materials. Outputs are the goods and services you provide. 

By improving operational efficiency, you reduce your inputs while keeping your outputs the same. For example, this could mean reducing labours costs without negatively affecting sales.  

1. Reduced labour costs

Labour costs are your biggest operating cost.   

Efficient planning of your workforce means they’re working when and where they’re needed. And also working on the tasks that make the most sense – if they require special training or certificates for example. 

It also takes budgets, demand and availability into account. This way, you avoid costly over- or understaffing.  

2. Streamlined admin 

Retail and hospitality are plagued by tedious admin. It’s why managers especially spend hours in the back office making shift plans or preparing timesheets.

Outdated systems are usually to blame. But newer systems can be just as guilty if they aren’t serving your needs.

Simplify and automate these tasks to free up mountains of time every month.

3. Improved collaboration 

You want everyone working together towards a common goal. But this is challenging when you have multiple locations. Head Office’s strategies and KPIs become inaccessible for managers. And key metrics from your departments get trapped in different systems — not providing any insights.  

Operational efficiency gets rid of these bottlenecks. Everyone from HQ and Payroll to managers and employees has access to the data they need, in a way that most benefits their day-to-day work.

How to improve operational efficiency 

Putting concrete measures in place to improve operational efficiency seems hard. 

Which operational processes should you look at first? And how to go about it in a systematic fashion? 

tamigo has been working with retail and hospitality companies since 2006. Over that time, we’ve seen that efficiency drives tend to centre on three key areas: KPIs, scheduling and HR data management. 

Let’s look at each one and see the steps your business can take. 

You can only begin improving operational efficiency when you have a clear view of your business’s performance. That’s where KPIs come into their own. 

What are KPIs (and why are they important?) 

KPI stands for Key Performance Indicator.

KPIs are valuable metrics for measuring performance towards a larger goal. They should be relevant, achievable, and most importantly, measurable for whichever stakeholder is responsible for them.  

Let’s take an example. Say you run a chain of high-end fashion stores. Your goal is to grow annual revenue by 10%. To your store managers and employees, this goal seems abstract and disconnected from their daily work.  

Assigning managers the KPI of Sales-per-Employee makes it more concrete. They can see which employees are selling most, and at what times. It makes it clear how they can schedule their staff to optimise sales, contributing to your goal.  

Depending on your type of business, your KPIs will be different. Read on for some examples from the different industries are customers operate in.  

Why you need KPI software  

Choosing your KPIs is one thing. Tracking them — and making them accessible to the right stakeholders — is another. Leave them to sit in a sporadically updated spreadsheet and you might as well not have them at all.   

 Fortunately, the growing market for cloud-based workforce management (WFM) systems offers a solution.   

These software combines scheduling, time and attendance, absence management and more. And they enable businesses to work real-time KPIs into daily routines. 

 An obvious example would be a manager planning next week’s schedule. With WFM software, KPIs can be displayed to them as they create schedules. Every time they move a shift around, they see the instant impact on KPIs like Wage Percentages, Available Hours and Productivity. 

With this approach, it’s also easier to report on KPIs. Because everyone has access to the same solution. A regional manager can always see current Sales per Total Hours per location. While HR can find and export Staff Turnover for their German and Spanish operations — ready to export to their global BI system.   

Base data behind these KPIs (think budgets or sales figures) is generally imported into your WFM solution. This can be done manually via Excel files, or through integrations with other systems, such as your POS, HCM or Guest Reservation software.    

 With KPIs accessible and usable in this way, you foster a forward-looking working culture — focussed on improving efficiencies, rather than just reviewing past performance.   

Effective resource allocation is fundamental to boosting your business's operational efficiency. Demand-oriented workforce scheduling has a significant impact on overall efficiency. After all, it optimises resources and increases productivity throughout the company. 

How scheduling impacts efficiency 

There’s so many elements to consider when scheduling staff: Availability, labour laws, budgets, and not least of all, the number of customers you expect at any given time.  

Get these elements out of balance and you’ve got problems. The two most common: Under- or overstaffing.  

Understaffed locations drain employees’ morale and curb your number of potential sales. Not to mention harming your brand’s reputation in the eyes of frustrated customers. And if you’re overstaffed? Then you’re paying out wages to staff who have nothing to do.  

Make schedules that slot all these elements together and you’ll boost efficiency. Employees are working productively, where and when they’re needed, and have the time to give stellar customer service. Discover how to schedule employees effectively.  

The best scheduling software
and tools   

Planning shifts can take hours out of your week. This is especially true if you rely on spreadsheets or ill-fitting systems.   

But shift planning doesn’t have to be so daunting. Modern employee scheduling software offer a range of features to life the weight of your shoulders. These include automations, which can generate shifts for the weeks ahead based on your ideal number of employees per hour. You can base this ideal number sales or customer footfall data you import into the solution.  

There’s a lot of options out there when it comes to software — from free online tools to cloud-based suites.

It all comes down to your specific requirements. Do you want to plan with the help of KPIs? Will your scheduling need to integrate to an existing time clock system?  

You can discover tamigo, one of the market’s most comprehensive scheduling solutions, here. See why it’s trusted by customers like Marriott, Intersport and McDonald’s.  

What about AI scheduling?    

ChatGPT was launched in late 2022. For most of us, it was the first time we’d had hands-on experience with AI. It sparked a scramble to incorporate AI into every workflow and business process.  

AI’s potential for scheduling is inspiring, but here at tamigo we believe that a human should still have the final sign-off.  

To this end, we’ve partnered with RELEX Solutions. RELEX is the market leader in retail and supply chain planning. Through our integration, RELEX’s AI-driven workload forecasts and optimisations feed into tamigo’s shift generation tools, ready for planners to use and validate. 

It’s an opportunity that Finnish pharmacy chain Yliopiston Apteekki took on. One of the country’s best known healthcare brands, they have 17 locations and over 1000 employees to schedule.   

“With the new end-to-end solution, Yliopiston Apteekki can leverage machine learning to generate accurate workload forecasts and optimal shifts,” says Sami Laine, HR Director at Yliopiston Apteekki. “It also empowers our employees to carry out their essential workforce functions, such as shift swapping, time and attendance and absence management, with ease.” 

Find more details on Yliopiston Apteekki’s story here.  

Why HR management matters     

HR is the backbone of retail and hospitality businesses. It's not just about hiring qualified employees and getting paperwork done. It’s also developing processes that inspire and engage your workforce.   

When employees feel valued and receive proper training, they naturally offer exceptional service, fostering customer satisfaction and loyalty. Additionally, robust HR management is fundamental in ensuring compliance with local labour laws.  
 
However, balancing the expectations of employees, senior leadership and compliance demands can be challenging. And many businesses still rely on outdated methods, navigating through spreadsheets and paperwork.

By streamlining HR management and reporting, your business can avoid the pitfalls of manual and inefficient workflows — unlocking a host of benefits crucial for boosting operational efficiency:  

• Consistent and accurate reporting 
• Mitigation of payroll and benefits errors  
• Compliance with different local regulations 
• Enhanced employee satisfaction and reduced turnover rates 

Speed up processes with automated document generation      

Automated document generation fits right into the lean operations that fuel the efficiency and growth of your business. They not only free up your HR team's time but also drastically reduce the turnaround time of processes.  

This is especially valuable during recruitment. Take for instance digital signatures. With the electronic equivalent of traditional written signatures, new hires and managers can sign in minutes, not the hours or days it takes when contracts are sent via email or post. 

Just like their manual equivalent, they are legally binding. Plus, far more transparent. Instead of being filed away on an office shelf, signed docs are available online — readily accessible to the relevant stakeholders. Learn more about the benefits of using digital signatures in your business.

Drive business value with HR analytics 

Analytics guide better decision-making. This holds for HR as well.   

McKinsey reports that HR analytics can boost hiring efficiency by 80% and enhance company productivity by 25%. As a result, more retail and hospitality companies are embracing HR analytics, or people analytics, to boost efficiency. 

In these industries with diverse workforces, including part-time, full-time, and contractual employees, finding effective workforce strategies can be tough. By analysing a spectrum of parameters, encompassing customer feedback, sales productivity, and performance metrics, HR analytics offers a comprehensive view. This empowers swift and accurate identification of inefficiencies for agile operational improvements.  

Armed with this data, businesses can improve processes, optimize workflows, and foster better teamwork. And also, beyond HR, people analytics impacts various aspects of business operations: 

• Reduced turnover
• Drive profitability 
• Streamlined performance management 
• Improve real-time decision-making 

Increase success with HR reporting software   

For retail, restaurant and hotel businesses looking to continue evolving in today's digital era, the need for reliable and efficient HR software has become more critical.

Especially HR reporting software plays a pivotal role in enhancing operations.

These industries thrive on the effective management of diverse workforces, making precise insights and streamlined processes imperative.  

HR reporting software isn't just about automating reports; it's a data-driven powerhouse that allows you to drill down on the HR data that matters.

As such it provides critical insights for informed decision-making, significantly impacting operational effectiveness. 

Let’s look at some of the benefits of modern HR reporting software: 

• Informed decision-making. It delivers in-depth analytics on workforce performance, enabling your business to spot trends and patterns, track key metrics, and make informed decisions. 
• Efficient operations. The automation of your reporting processes will save you tons of time and minimise errors, leading to smoother operations.  
• Compliance across the board. Modern HR reporting software like tamigo allows you to configure your solution to the individual needs of the markets you’re operating in. Your employees will be able to use tamigo in 20+ languages. We will ensure compliance with labour laws and industry regulations to in-depth expertise about different markets. 

Mastering data with BI integrations  

In HR, data in the form of reports, budgets and various metrics is key to increasing operational efficiency and gaining a competitive advantage. However, managing this flood of data and drawing actionable conclusions can quickly overwhelm HR departments - especially if it is done manually and with time-consuming spreadsheets. 

This is where Business Intelligence (BI) software comes into play.  
 
BI systems offer advanced capabilities that give your HR department a new perspective on data. These platforms allow for a holistic view and empower HR teams to gain insights into key metrics, predict trends and make informed, actionable decisions.

However, integrating a BI system requires careful consideration. When seeking to implement a BI solution, look out for two things: 

• Compatibility: Ensure compatibility and seamless integration with your existing HR system, allowing for a unified and comprehensive data ecosystem.  
• Usability & Accessibility: Prioritize user-friendly interfaces and accessibility across different levels of the organization, enabling easy adoption and utilization of the BI system by various stakeholders.