This article was published in the January 2017 issue of STORES Magazine.
Standardizing workforce management benefits McLendon Hardware employees
For nearly 90 years, McLendon Hardware has attracted generations of do-it-yourselfers in the Puget Sound area of Washington state by catering to their every home improvement need, eliminating the need for trips to multiple stores.
You might say that the seven-store chain is doing the same thing for its employees, with one-stop shopping to get them more directly involved with human resources and work-related issues. “We’re heading toward a holistic view of workforce management,” says Nathaniel Polky, director of information technology for the retailer.
The key has been McLendon’s move to standardize its human capital management processes through Kronos, which not only enabled the company to cut workforce management expenses by one-third but also replaced multiple applications from other vendors in HR and payroll functions.
“McLendon Hardware is built upon a foundation of superior customer service and understands that happy team members lead to happy customers,” says Liz Moughan, senior director of the retail and hospitality practice group for Kronos.
“It’s also a progressive retailer that believes in leveraging technology to help with operational excellence. This enables superior customer service through employee empowerment.”
Cultivating experts
McLendon’s history is one of innovative thinking. Moses Jones McLendon, who founded the company in the 1930s, had a knack for knowing what his neighbors needed — even before they did — and made sure everything was waiting for them in that first small store. Today, the company operates seven stores from Seattle to Tacoma, ranging from 20,000 to 100,000 square feet. The 45,000-50,000-square-foot range is the sweet spot for McLendon’s, Polky says, and the company will be looking to expand over the next couple of years.
“Recently, our focus has been on reinvigorating our digital and marketing efforts,” he says. “We went live this year with a fully responsive e-commerce website that shows local market inventory and customer pricing. Early next year we’ll be going live with a transactional component enabling customers to buy online and pick up in-store, and we’re looking at direct-to-consumer fulfillment later in 2017.”
Overall, the chain’s success stems from attention to offering categories and product selection beyond what’s available in traditional big box stores, Polky says. “Instead of 50 SKUs, we might have 100 on some items and categories.”
“We’ve spent a lot of time cultivating [expert employees] and we want to make sure we have solid systems and processes to retain and bring in new team members.”
Beyond merchandising, another important differentiator for McLendon’s is the pride it takes in its team members. “We’re a family business,” he says. “We have some people who have worked here for 40 years, and a lot in the 20-25-year range. We’ve spent a lot of time cultivating people that are able to offer expert advice to customers, and we want to make sure we have solid systems and processes to retain and bring in new team members.”
The company has between 400 and 450 full- and part-time workers in its stores, depending on the season. “We spent the last couple of years trying to keep a balance between the needs of the business on the financial side and doing right by our team members in fixing schedules or checking on vacation time,” Polky says. “It’s about offering a consistent experience for long-term team members and improving staffing in the stores.”
‘Simple but powerful’
McLendon’s had been using Kronos systems for time and attendance since the early 2000s. But when team members punched in and out the data was exported to ADP, which handled payroll, vacation accruals and other components.
“We had two systems that had to be integrated,” he says. “We’ve modernized backend systems over the past couple of years, but we still hadn’t come to grips with how we were going to structure our team member information and payroll information in order to get some value out of it. By moving to Kronos we were able to change some simple but powerful things.”
One example is vacation balances. “Prior to using a single platform it was challenging for a team member to know how much vacation they had actually accrued,” Polky says. “The data was maintained at ADP, which only got it every two weeks. But vacations happen all through the year, and information about benefits was not always accessible to team members.”
The other challenge was the lack of standardization.
“Nearly all vacation requests were done manually,” he says. “We have policies about requesting vacations a certain number of days in advance, but the rules weren’t always followed. So a team member in one location could get a day off with only a day’s notice, but at another store [they] might have to ask a month in advance.
“Everything is simpler. Team members can see accrual balances, sick time and paid time off.”
“The most impressive thing about bringing everything to one system under Kronos is that everything is simpler. Team members can see accrual balances, sick time and paid time off, and the system is always updating.”
The company also moved to Kronos Cloud, which significantly broadens access to information. “Team members can now do their vacation planning at home from their own computers. There’s also a mobile solution that enables them to see their schedules [and] vacation time and immediately get approvals on their phones. It’s not the most glamorous thing, but all that transactional activity that happens through the day has to occur. We’ve been able to make it quick and efficient,” Polky says.
“Employees love seeing their schedules. It’s a small thing, but very important for them to know when and where they are working at any point in time. It gives them choice and flexibility, and it’s been very well received.”
Employee engagement
The Attestation tool kit from Kronos gives team members a simple way to be engaged in the time card review and documentation process, allowing them the opportunity to review, approve and reject time cards by using Kronos data collection devices including time clocks and mobile, tablet and web platforms.
This helps employees attest to the accuracy of changes and time totals before the retailer accepts the approvals. Attestation also helps the company manage compliance with various federal, state and local labor laws.
There was an implementation period with Kronos during which McLendon’s had to upgrade its own systems. But integrating the data was a smooth process. “At that time everything went paperless,” Polky says, “and I like to think of it as an important but uneventful day.”
Since then, there have been some unanticipated institutional benefits for McLendon’s.
“We’ve been able to minimize a lot of risk,” Polky says. “For a long time, we had one person dedicated to doing payroll. That’s all she did — she even scheduled her vacations around it. This gave us the opportunity to offer her the same benefits as other team members and actually cross-train people. Distributing the work across a number of people makes for a more efficient environment and eliminates that one single point of failure.”
Where does the chain go from here? “Our big vision is ‘next-gen scheduling,’” he says. “We’re looking at labor regulations and increased flexibility in scheduling. We want employees to be able to swap shifts between themselves and do labor pooling. For example, this will give cashiers the opportunity to work in different stores to get additional hours and shifts.
It’s very challenging to find high quality talent these days,” Polky says. “We want to do everything we can to retain team member and to get new people in the organization.”