September 16, 2020
After inventory, payroll is an independent pharmacy’s biggest expense. Scheduling personnel can be the difference between a lean or a bloated payroll, and it can also affect every part of your pharmacy, from customer satisfaction to employee productivity.
Phil Keough is the CEO and co-founder of YourLifeRx, a chain of independent pharmacies, and previously ran pharmacy operations for chains like CVS, RiteAid, and Kmart. He sees scheduling as an under-discussed facet of running a pharmacy. “It’s a foundational piece of operations,” he said. “You can have all the best systems, all the best technology, the best products, but if you don’t schedule people properly, you’ve kind of wasted all your other efforts.”
As crucial as it is, scheduling can be a difficult task to get right, even for the most successful retailers in the country. “This is a tricky topic if you think about it from a retail manager perspective,” said Saravanan Kesavan, an associate professor at the UNC Kenan-Flagler Business School. In his 17 years researching retail operations—including work with Kroger, Lowes, and Gap—he’s found that retailers struggle most with balancing employee satisfaction with the employer’s priorities, which is the key to a good schedule.
“What is good for employers may not be good for workers, and what is good for workers may not be good for employers,” he said. “On one hand, workers say they want to have steady, stable shifts, but if you think about it from a retailer perspective, when traffic is moving up and down, what’s the point of having people sit idle in the store?”
Similarly, Keough keeps two things in mind when creating a schedule: employees and customers. “Proper scheduling is really the key to making sure you can take care of both of those groups,” he said. If you’ve got too many people on the schedule, payroll costs will eat into your bottom line. But there are downsides to running too lean. “If you don’t do it thoughtfully, you can actually hurt morale. That can hurt the bottom line because the customer experience is diminished. You’ve got an overtaxed staff and you can end up driving customers away.”
An ideal schedule would have just the right amount of staff relative to the amount of traffic at any given moment. “You want to have the most productivity with the least amount of payroll,” Keough said. That means ramping up numbers during peak shopping hours and paring them down during slow hours, which can vary day by day and season by season. To best align schedule with traffic, Keough suggests using data from your point-of-sale and pharmacy management systems, making sure to factor in any overlap you may need to cover breaks and lunch.
Although you want to try to match your scheduling to patterns in customer traffic as closely as possible, that will inevitably conflict with what’s best for your employees. “It is a balancing act, and if you do this wrong you lose on the customer front and you lose on the employee front,” Keough said. “Which goes back to my overarching theme, you’ve got the two most important things to take care of, and if done incorrectly you’ve now negatively affected both of them.”
This is a key point that retailers often miss, according to Kesavan’s research. “Purely from a profit perspective, it appears most retailers think that if they can get a tight match between the employees in the store and the customers coming to the store, then that’s where the profit is going to be highest. That is what many people might consider a ‘good’ schedule,” he said. “But we have to think about it from the employee’s perspective, the person who is actually having to do the work. If you treat people like widgets, profit could go up, but it’s not that simple, because people aren’t widgets.”
This push and pull is exacerbated by the fact that part-time work is on the rise in the United States, but many part-time employees would like the predictability of full-time employment. “It causes an enormous amount of stress for workers when schedules change from week to week,” Kesavan pointed out. It makes it harder for employees to budget and find appropriate childcare, which adds a lot of stress to their lives and causes their work to suffer.
Assigning workers to relatively stable shifts can keep your pharmacy profitable, even if it doesn’t exactly match the flow in customer traffic. If you assign employees to erratic schedules that match up with foot traffic, Kesavan points out, your best employees are going to take their talents to a competitor that is offering a better schedule. Then, you’re left with C-players who aren’t happy with the shifts they’ve been assigned and aren’t on their best behavior with patients.
“Retailers need to look at the big picture,” Kesavan said. “Not just at how to maximize profitability, but take a more empathetic viewpoint. Think about what your employees want.”
Retailers can save money on payroll by giving employees more autonomy over their schedules.
This is what the Gap discovered when they gave their employees more control.
When employees weren’t in control of their schedules, they were late more often—by around 4 to 5 minutes. “This may not seem like a big deal, but the downstream impact was big,” Saravanan Kesavan explained.
When employees were late, they were more likely to take a 30-minute lunch instead of an hour, adding a half-hour to their pay. They also left between 8 and 9 minutes late.
Employees who had their preferences taken into account were more likely to adhere to the schedule. They came in on time, took their full lunch, and left on time, trimming down payroll in the long run.
When employees feel like they are constantly getting the short end of the stick with their schedule, morale suffers. “Years back I worked with a company that knew that one of the least desired shifts was the Friday evening shift,” Kesavan recalled. “This is the time that people wanted to spend with their families, but it was also a time that had a lot of customers coming in.” As a solution, managers worked to schedule these less desirable shifts on a rotation basis, so the same employee wasn’t working every Friday evening.
While working on research with Gap, Kesavan helped to implement a system where schedules were initially created by a software program, but employees were able to make adjustments to their schedules using an app. He described, “If there was a shift that someone didn’t want to work, there was usually a person looking to make some extra money that happened to be available. And the manager doesn’t even have to get involved! This is a win-win-win solution.”
However, not all managers are comfortable giving their employees complete autonomy over their schedules—including Keough. “I always have employees work through a supervisor that is ultimately responsible for staffing and scheduling to make sure that we’re properly covered,” he explained.
Because supervisors know their staff member’s strengths and weaknesses, they are in a good position to understand who is best utilized when. Keough said, “They see that this employee is great with customers but gets overwhelmed with high volumes, so you wouldn’t want to put that person in on the busiest day.” When managers field scheduling requests, they can make sure the pharmacy always has the right balance of employees available.
Making sure the pharmacy always has adequate staff is another way Keough works to maintain high morale. When the pharmacy runs too lean, employees feel like they can’t take a break because there aren’t enough people to provide coverage, which adds unnecessary stress to their jobs.
To create a schedule that works for both employers and employees, Kesavan recommends considering three factors: consistency, predictability, and control.
Even if many of your workers are part-timers who aren’t working the same 9 to 5 hours, you should still strive to assign them to a somewhat consistent schedule. Instead of assigning an employee 5 hours one week and 30 hours the next, try to assign them around 20 hours every single week. “It helps employees plan their lives,” Kesavan pointed out. “Maybe it allows them to get another part-time job with another retailer. That’s easier to manage with a consistent schedule.”
Giving employees adequate notice about their shifts can also help them manage their lives and be more present while they are at the pharmacy. One mistake Kesavan has seen in his research is employers that announce their schedule with only a day’s notice. When employees can’t predict what their week’s schedule is going to look like, it makes it difficult to arrange their life. To add predictability, announce your schedule at least a week in advance.
“Giving employees some degree of say over when they will work and when they will not work makes a big difference in their satisfaction,” Kesavan said. When an employee starts, they might prefer shifts on Monday, Wednesday, and Friday, but those needs aren’t static, and their scheduling preferences will probably change over time. Find a way to take employees’ changing scheduling needs into account and give them more control over when they work.
Keough has noticed that when managers show a willingness to work with people on their scheduling needs, people are more willing to be flexible. “You can create a team environment so people can work together and swap shifts,” he said. “This works in the front-end of the pharmacy as well as behind the counter with pharmacists and technicians.”
And of course, you can’t play favorites. It doesn’t matter if an employee has been working the register at the pharmacy for 25 years; you have to treat their requests the same as if they were from any other employee. He added, “You’ve got to be consistent, you’ve got to be fair, and you’ve got to be reasonable.”
Keough also keeps his schedule nimble by hiring a mix of full-time and part-time workers. “Where I see people really getting into trouble around scheduling is if they’re too heavy in one category,” he explained. If everyone is working full-time, employees will be left in the lurch if one of their co-workers decides to take a vacation. “Having a mix of full- and part-time workers gives you more flexibility to adapt the schedule for when customers need you.”
No matter how well you do at configuring the perfect schedule, Keough acknowledges that you simply won’t be able to please everyone, and you have to be able to live with that. You just have to do the best you can. “As a human being you want to try to help people, and your employees are so important to you,” he said. “They’re more than just employees. Early on I tried to make everybody happy, but it just doesn’t always work well for the business. You’ve got to have some guiding principles that you follow and share, and people will appreciate and respect that. ”
This article was published in our quarterly print magazine, which covers relevant topics in greater depth featuring leading experts in the industry. Subscribe to receive the quarterly print issue in your mailbox. All registered independent pharmacies in the U.S. are eligible to receive a free subscription.
Read more articles from the September 2020 issue:
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