Today’s post comes to us from the Executive Director of The Workforce Institute, Dr. Chris Mullen, Ph.D., SHRM-SCP, SPHR.

Have you started your holiday shopping yet, or have you even begun to think about it? Retailers have — and they’re already busy navigating how to attract talented associates who will help meet consumer demand this holiday shopping season.

Lingering supply chain issues and labor challenges brought on by the COVID-19 pandemic continue to impact global industries, especially retail. According to new research from UKG, labor shortages left 68% of retail stores struggling to meet sales goals this past summer, and 88% of retailers are concerned about burnout and fatigue among store associates as we enter peak-selling season.

It’s not all doom and gloom, though. While 63% of retailers feel this could be the worst holiday hiring season in memory, according to the study, almost all are confident they can still deliver a positive experience for associates (93%) and shoppers (94%).

That’s good to hear, because the National Retail Federation predicts in-store retail sales could exceed $3.35 trillion this year, which is up from $3.10 billion in 20201. All the more reason retailers will need to find innovative ways to not only recruit employees for another busy season, but also ensure their people remain happy and willing to stay through the holidays, and beyond (95% of retailers surveyed by UKG believe it’s more important to fill permanent positions rather than to hire temporary seasonal staff).

What can retailers do? According to the UKG study — titled “Retail’s 2021 Holiday Season Outlook” — it’s about more than just increasing employee pay, though that’s critical too.

While the research shows that about 70% of retailers made direct, long-term investments in their people in 2021 — i.e., raised wages or offered innovative and impactful benefits — others have committed to providing schedule flexibility, job stability, and development opportunities.

Furthermore, as the UKG study cites:

Retail is just like other industries — business success is directly tied to employee happiness, even more so during a pandemic. It’s a simple concept, but not exactly the easiest to execute on.

As we plan for another holiday season, and the joy that often surrounds it, let’s think of the ways we can keep workers happy. And while you’re out in the stores shopping for those must-have gifts, remember to be kind to all of the hard-working retail associates, and maybe even take a moment to thank them. Kindness is a gift we can all appreciate.

Are you struggling to recruit and keep great employees? Register for our October 20 webinar: “Beyond the Great Resignation: An Action Plan for Hiring and Retention.” I’ll be joined by Workforce Institute advisory board members Sarah Morgan and John Frehse. It’ll be a great discussion, and we hope to see you there!

1 Based on the National Retail Federation’s June 9 projection that 2021 retail sales could total more than $4.44 trillion, including an estimated $1.09 trillion in non-store and online sales, and that total retail sales in 2020 reached $4.02 trillion, including $920 billion in non-store and online sales.

Today's post comes to us from Workforce Institute board member John Frehse, senior managing director at Ankura Consulting Group, LLC.

Did you really need 200 rolls of toilet paper, 300 lbs. of dry dog food, and 24 cases of sports drink? Probably not, but you bought it anyway. Just in case. Just in case the supply chain broke down completely and these items stopped becoming available at your local supermarket. Panic at the Walmart was visible to everyone back in March at the beginning of the global COVID-19 pandemic as initial concerns quickly exploded into all out fear.

As consumers created a network of new warehouses in the supply chain - their basements or storage closets - a massive disruption for manufacturers ensued.

Over the last several decades, forecasting demand has become a more exact science, although manufacturers will argue it still has a long way to go. This continuous improvement gave large, global brands the ability to consolidate warehousing space and carry less inventory. The effort to become “just in time” producers of consumer goods drove carrying costs down and squeezed out additional profit. This “leaning out” of the supply chain was celebrated as progress.

But, as we all know now, this new, lean supply chain was never engineered for the type of panic buying spurred on by the pandemic that was seen in 2020. Shelves quickly emptied of essential items causing manufacturers to ramp up production.

There was a brand new and unforeseen problem. Customers were not consuming the products they were buying, but storing them in their basements and other storage spaces, therefore creating a new network of warehouses in the supply chain. As concerns over supply eased, consumers began using the products from their own “warehouse,” therefore decreasing demand at the store level. This backed up the real warehouses as manufacturing sites were now overproducing. The initial shockwave that caused the ramp up in production was now hitting the opposite way, a sharp decrease in demand and the need to dramatically ramp down production.

This was not true for everyone. The sectors with the biggest gaps in supply chain agility had winners and losers. When the shelves were empty of one's preferred brand, whatever was available was purchased and those who were on the shelf gained new customers for life. This customer acquisition trend through product availability (or lack of availability) will have an impact on demand long after the pandemic is over.

So, what does this mean for labor? As shockwaves continue to reverberate through the supply chain, employees are being asked to be more agile than ever. The amount of overtime worked during the pandemic for many of these employees is unsustainable, and fear of reduced hours below the traditional 40 is now a real fear as consumer demand adjusts. This type of whiplash is especially painful for companies who have not created agile labor strategies and systems to handle such fluctuations.

As exhausted as we all are right now, there is no better time to assess what has happened, develop the right labor strategies, and make our companies more resilient for the next big disruption. It is not a question of if, but when it will happen again.

Today's post is courtesy of our board member, Mark Wales.

Recently, we've seen increasing pressure on retail profitability. Declining traffic and retention, combined with increasing labor costs, higher customer expectations, and the need for more frequent investments in technology and store renovations, are all making survival in the retail jungle a real challenge. The result is that more than 8.5k stores are projected to close in 2017 which is higher than 2008, the previous worst year on record.

And yet, challenging times like these can provide an opportunity for employers. Rather than deciding to squeeze the cost of labor as a way to try to protect the P&L, employers can rather look for ways to work smarter with the employees they have.

By focusing on optimizing forecasting and scheduling, retailers can enhance their ability to have the right employees, in the right stores at the right time. Furthermore, if retailers allow employees to have input into their schedules, they are more likely to have engaged employees who will give that extra discretionary effort to deliver the right customer experience.

Retailers must keep in mind that optimization is not a one-size-fits-all solution. In fact, the factors that most impact forecasting and scheduling are often very local, such as:

• All employees are not created equal. Experience, tenure and capability matter and significantly impact productivity.
• Stores themselves vary in format, customer-flow and sales mix.
• Weather, transportation patterns, special events and numerous other factors (even the stock market), can influence local demand in variable ways.
• Store closures, pop ups, Amazon and other online options are quickly affecting demand in unpredictable ways.

However, one factor transcends local needs and is consistently true across all stores and markets: Good managers build great teams. They find the right individuals, blend their skills, and lead their teams to achieve their goals. So give your managers the tools they need to build good teams. The ability to schedule employees to work together on a frequent basis builds up a level of trust, knowledge and teamwork that unlocks productivity. You must ensure that your forecasting, planning and gatekeeping at a corporate level support the ability to execute at a local store level. By doing this you will set your managers up for success.

So put your faith in your leaders in the stores. Make sure that you're triggering the right behaviors in field leadership by emphasizing simplicity and consistency. This creates time for managers and employees to focus on servicing the customer in ways that bring them back. In the end, it is not cutting labor, but rather investing in and supporting labor that will increase sales, and protect the profitability of stores.

mall shopperToday's guest post is by our board member,  Mark Wales.  Mark is an expert in workforce management for the retail industry.  Here he shares his perspective on how retailers and services providers are looking to their workforce as a strategic asset and not just an expense to be minimized.

Recently at an International Workforce Management Summit I witnessed the seismic shift in how workforce management is perceived and how it has grown in strategic importance to retailers and service providers. Ten years ago it was IT and HR who attended these events, now it was exclusively Operations. Why the dramatic change and what does it mean for the workforce?

The reason for the change is the rising strategic value of employees. While many retailers and service providers may see labor as the largest controllable cost, many have turned the corner and realized that their brand, their business model, and their profitability depend on how wisely they invest in their employees.

It is essential to pay your employees in a timely and accurate manner with appropriate controls and visibility. That, however, is not enough. It does not maximize the full potential of your employees, your customers, or your profitability. You will fail to recognize the value of many facets of employee experience, customer experience and productivity. To raise the strategic importance of workforce management you must draw a direct link between investing in the employee, impacting the customer experience and driving profitability.

Forward thinking retailers and service providers are building a new generation Operations discipline.  They envision a holistic multidisciplinary approach to workforce management that is centered on productivity and optimization of both the employee and customer experience. You will see this impacting hiring, training, team management, service design, organizational responsibilities, and decision making. The changes may seem subtle and evolutionary at first, but they have the potential to radically impact company performance over time.

Relevant Links:

New York Times article "Thinking Outside the (Big) Box"

Good Jobs Strategy = Happier Employees = Better Customer Service

How do retailers make you stop shopping?

 Kronos white papers on workforce management for retail

 

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