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Labor Standards for the New Normal

Today's post comes to us from retail industry veteran and Workforce Institute board member, Mark Wales.  As we emerge from the pendemic, businesses worldwide will need to redefine their labor standards for the new normal.

I defy anyone right now to know what the new normal is. The blurring of our home lives, work lives, and school lives has brought dramatic changes to our daily lives, the way we work, how we communicate and how we shop. While we see steps towards a return to normal life, this is unlikely to be quick, and there is genuine concern about what life will be like in the weeks and months to come.

Which changes are temporary, and which may be permanent changes in our behaviors? Big questions are being asked about what will make us feel safe to fly, to shop, to go to a restaurant, or go to a mass event such as a concert or a sporting event.  Each state has its own plan to balance economic recovery against the potential loss of life associated with reopening too soon.

So how do businesses dependent on frontline workers plan for this? For decades, best practice has been to fund labor for stores, restaurants and events based upon labor standards, which are established measurements of how much effort it takes to complete a task. This could include the ringing up of a sale, the stocking of shelves, cleaning, and all the activities required by a specific location or event. Combine these standards with forecasts of traffic and you can project the labor required.  

As the economy slowly re-starts in the wake of the COVID-19 pandemic, there are two huge challenges to this established best practice.  The first is that we have never seen a worldwide event of the scale or impact of COVID-19 before and we have no real idea of what to expect in the weeks and months to come. This hugely reduces the accuracy of forecasting traffic and customer demand.  

For example, during this pandemic, many more of us have used the services of companies where you create your order and either have it delivered or waiting for you for curbside pickup. The question is, are people itching to get back into stores, or will this be a turning point where fewer people want to shop in the store or eat in a restaurant?  

Another example of the radical change that has occurred in such a short period of time is in the form of the wearing of masks and social distancing. These new practices change the way staff interact with customers, work together, where they have breaks, and even when they arrive at locations. The ramifications are significant and only now beginning to be thought through. For example, do you keep strict shift patterns to separate staff into A and B shifts to minimize the risk of infection? What hours do you operate to allow for additional cleaning? Big questions that need to be worked through using data to drive decisions about schedules that will keep customers serviced while keeping employees safe.

The second big challenge is that companies, when their profitability is threatened, have often turned to their labor cost and cut hours to reduce costs. Given the economic challenges of many businesses there will be some tough decisions on how to stay open and cover costs. Business models will be rethought as restaurants deal with seating limited to 25% or 50% of previous seating capacity, stores with limited customer counts at one time, or limits on maximum attendees at events. It will be a huge effort for businesses to understand how they can operate profitably in the weeks and months to come and what can they afford in terms of staffing.  

What this means for labor standards is that almost no business model or task is now as it was before, and no forecast has a valid history to be based upon. Planning labor will need to adapt quickly to ensure the safety and health of the customers, the staff and the business.  

Re-opening in the post-COVID-19 world will challenge every practitioner in operations, HR and Finance to find viable and ethical solutions to these challenges. The use of labor standards will have only a limited value until we truly have discovered what the new normal is. Then we face the challenge of how to implement and operate these changes across all locations at a time when consumer behavior is changing more rapidly than businesses can adapt. 

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