The Wall Street Journal: HR Software Maker Shifts Emphasis to Employee Satisfaction

The Wall Street Journal, November 13, 2015
Elizabeth Dwoskin

Companies including Gap Inc., Starbucks and Target have come under fire for turning workers’ lives upside down with unpredictable hours set by automated scheduling software. Now one of the largest vendors of such software aims to profit from a different approach: prioritizing employee satisfaction.

Kronos Inc. executive Charles DeWitt, speaking on a panel at the Next:Economy conference in San Francisco, showed off new product features that score businesses on the predictability of employee schedules and number of working hours assigned to each employee.

Kronos’ effort comes at a time when government officials are scrutinizing employment practices that require low-wage workers to show up, stay home, or be on call with little notice, interfering with their ability to do things like care for children, attend classes, or take on other jobs. New York’s attorney general in April warned 13 large retailers that such practices may violate state law.

At the same time, software vendors see opportunity in collecting, analyzing and displaying new types of data that can provide a bird’s eye view of business performance. Startups that specialize in the functions known as people analytics use software-based formulas to evaluate employee behavior, supplementing or potentially replacing human managerial judgement.

Typically, Kronos software helps managers set workers’ schedules and monitor their punch cards. The new features in its Analytics for Retail program show relationships between employee scheduling and financial performance,  so businesses can see the impact of, say, staff retention on sales at a given store.

The new features, which DeWitt said are being tested by several retail chains, show store managers how their location stacks up against sibling stores in terms of workers’ quality of life. Stores where workers have predictable schedules that meet an agreed-upon target for number of hours assigned get a green check mark. Those that don’t are scored with a red x.

The software shows how metrics of scheduling equity, as DeWitt puts it, correlate with turnover and absenteeism. DeWitt said he hopes eventually to show the positive relationship between scheduling equity and sales, customer satisfaction and brand awareness. For instance, stores brimming with employees may generate a better customer experience and thus greater sales and name recognition than locations so thinly staffed that it’s hard to find a person who works there.

While the software is designed to help managers make more worker-friendly decisions, there’s no guarantee they’ll use it that way. “The technology is not the problem, it’s how companies are choosing to use it,” said Carrie Gleason, Director of the advocacy group, Fair Workweek Initiative Center for Popular Democracy, who also spoke on the panel. Ms. Gleason announced at the conference a code of conduct for companies looking to change their management practices.

Kronos’ new features take advantage of the company’s access to databases of its retail customers that weren’t designed to be queried by an everyday retail manager, DeWitt said. The predictability score was based on how consistently employees worked from week to week and how often managers changed schedules last minute. The target number of working hours was based on targets defined by the employer or employee, or both, at the outset of an employment. The software compares hours actually worked with the target.

DeWitt said his thinking was influenced by Marshall Fisher at the University of Pennsylvania’s Wharton School, who wrote about how mining data could help retailers rethink traditional ideas about supply and demand. If labor was viewed only as a cost, Fisher wrote, managers were less likely to see value in their workers.

“For so long, labor was represented by the cost line,” DeWitt said. Until executives can see labor “reflected in the top line, it will be hard for them to make clear decisions.”