Workforce management solutions (WMS) have been around for many years. This type of software automates and speeds up important tasks like payroll, scheduling, and employee onboarding. These solutions can also often help answer key questions about the cost and effectiveness of your workforce, including inquiries like "Which shift has the lowest variance from standard labor cost and why?" and "Which store managers use the most overtime as a percentage of total labor cost?"
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Most good suppliers of WMSs tailor their products for the demands of a particular industry. Some industries face unique business regulations, and without WMSs designed specifically to account for those regulations, companies may not be able to run efficiently.
If you work for a hospital, for example, you likely deal with a WMS specifically built for hospitals. Rules about nurse-to-patient coverage and other specific requirements for the field will be built into the WMS. Same goes for restaurants, department stores, and many other industries.
But what about the cannabis industry? WMSs for cannabis companies have only recently appeared, because the legal cannabis industry itself has only recently appeared. The good news is that the recent wave of states legalizing cannabis in this past election has lit a fire under everyone who seeks to sell goods and services to cannabis companies. Just as you would expect irrigation systems for cannabis growing to improve over the next few years, you should also expect WMSs for cannabis companies to improve.
What the Best Vendors Know
The legal cannabis industry is starting to invest in WMS technology for the same reason industries invest in any technology: to save money, to improve employee experience, and to improve customer experience.
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If you work in the cannabis business and are shopping for a WMS right now, you should narrow your choice of vendors to companies that understand the requirements of the cannabis industry, including the state-specific laws, federal laws, and published memos and interpretations from the Department of Justice, the IRS, and the Financial Crimes Enforcement Network (FinCEN) that affect how cannabis companies must manage employees and account for labor costs.
If you aren't shopping for a WMS just yet and you're wondering if you can run your cannabis business by using whiteboards for scheduling, free apps for timekeeping, and asking your bookkeeper to run your payroll on Quickbooks, the honest answer is "Maybe." However, the probability of running your business efficiently via these methods goes down over time.
Why Cannabis Companies Should Invest in Industry-Specific Solutions
There are three basic dynamics that push smart companies to invest in professional-grade cannabis workforce management solutions.
The first dynamic is the behavior of regulators in a company's home state. We can use Colorado, the state with the longest history of interactions between businesses and regulators, as our reference. The regulators in California, Nevada, Florida, and other states that chose legalization might allow up to 12 months for businesses to learn and adapt to the state's new regulations. However, once that grace period ends, audits begin, fines start being issued, and licenses start being revoked if a business is not up to regulation. If you get to the end of that grace period and you don't have good records and audit trails, the Colorado experience tells us that pleading ignorance of the rules may not get you very far.
The second dynamic is business growth. As your business grows, basic and necessary tasks – like making sure you have all the correct paperwork and registrations for new employees – can no longer be done in an ad-hoc manner. A good WMS makes tasks like this faster, easier, and better organized. Your costs stay manageable and your risk of noncompliance decreases.
The third dynamic is competition between cannabis businesses. As with any industry, the first way to compete is to have a cannabis product that is better than the rest. But once you have several companies in your space making excellent products, operational efficiency becomes another arena of competition. Your workforce is one of your largest costs – and also one of your most potentially important assets. Eliminating wasted effort, minimizing administrative workload, and keeping employees happy and engaged are important ways to be better than the competition.
A good WMS can make running a business in the cannabis industry much less complicated. As you assess potential vendors, remember to work only with partners that understand the complications of the industry in the first place.
Keegan Peterson is the founder and CEO of Wurk.