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.
Todayâ€™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 â€“ their basements or storage closets â€“ 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 â€œjust in timeâ€ producers of consumer goods drove carrying costs down and squeezed out additional profit. This â€œleaning outâ€ 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 â€œwarehouse,â€ 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 oneâ€™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.
Todayâ€™s post comes to us from the executive director of The Workforce Institute, Dr. Chris Mullen, Ph.D., SHRM-SCP, SPHR.
The grocery store aisles may currently be stocked with Halloween candy, but I can tell you that retailers everywhere (along with my kids) are already thinking ahead to the holiday shopping season. The latest UKG survey looks at retail trends for this holiday season which, in light of the unprecedented global pandemic we are all currently living through, is likely to be a season like no other.
The survey touches on a variety of issues from how confident retailers are about staying open through the holiday season, to how good managers are more important now than they ever have been.
Some of the findings I found most interesting focused on prioritizing employee well-being and evolving for the new normal:
The retail industry has shown remarkable resilience and innovative thinking throughout this pandemic, and itâ€™s critical that they continue to do so as the holiday shopping season commences. Perhaps most important, retailers must recognize and appreciate their frontline workers and minimize the risks they face while doing their jobs each day.
And a final thought: We as shoppers and consumers should also remember how indebted we are to these hardworking frontline workers. Be extra patient while waiting in the check-out line, show your genuine appreciation to the person helping you pick out that perfect gift, keep your sense of humor when things donâ€™t go as quickly or smoothly as you had hoped. A little patience, gratitude and good will goes a long way in these difficult times!
You can download the full report here.
Today's post is submitted by Joyce Maroney, Executive Director of the Workforce Institute.Â Black Friday is upon us, and retailers everywhere are scrambling to get ready for lots of shoppers and extended hours to staff.Â Are you ready?
No-shows, call-outs, and last-minute schedule changes arenâ€™t just frustratingâ€”unplanned absence is corrosive to the day-to-day operations at retail stores across the globe.
According to a recent survey by The Workforce Institute at Kronos Incorporated, retail managers across six global regions revealed that last-minute absenteeism leaves their stores understaffed a quarter of the time, while more than half of retailers surveyed (52 percent) cited unplanned absence as one of their organizationâ€™s most difficult, complex, and time-consuming issues.
The pervasive issue of unplanned absence
Regardless of country, employee head count, or sectorâ€”from grocery to warehouse, convenience, or department storesâ€”the challenges posed by unplanned absence are universally felt and can directly impact a storeâ€™s bottom line: Retailers surveyed acknowledge that at least one in 10 in-store labor hours budgeted is wasted due to staffing misalignment resulting from absenteeism.
â€œImagine if companies were wasting 10 percent of their product, or losing 10 percent of their revenue. Retailers would immediately put in place a task force to solve the issue,â€ says Workforce Institute at Kronos board member Mark Wales, a leading retail industry advisor and global expert in next-generation workforce management. â€œHowever, with workforce management being a traditionally less-than-sexy topic, this flies under the radar and the consequences of unplanned employee absence, although severe, are far from being resolved at most organizations.â€
This isnâ€™t to say that retailers havenâ€™t been working to get ahead of the absence curve. Particularly as the holiday shopping season draws near, itâ€™s not uncommon for managers to proactively overschedule a busy shift in anticipation that associates may call out. Yet this attempt to address the problem can often lead to more issues: Without accurate and actionable data to inform when and where additional staff support will be needed, overscheduling can lead to wasted labor hoursâ€”both for managers and their staff, who ultimately feel underutilized and unchallenged.
On the flip side, managers who donâ€™t overschedule run the risk of needing to fill vacant shifts on the fly. This causes unnecessary stress for store managers who find it challenging to deal with associates working additional shifts beyond their scheduled hoursâ€”especially if they incur overtime. The impact of filling these shifts on short notice also means that one in four (26 percent) retailers are working with staff that have the wrong skills or a lack of skills at least half the time. Not to mention, tapping into overtime and increasing individual workloads can swiftly impact morale of current employeesâ€”in fact, theyâ€™ve been found to be two of the three largest contributors to burnout.
Smart solutions for smarter workforce management
It remains challenging to identify the root causes of unplanned absence, and the study suggests retailers may not be doing all they can to address the issue. Findings reveal that only about half (55 percent) of retailers worldwide have technology in place to help manage unplanned absence compared to three-quarters of retailers using automated technologies to track time and attendance (76 percent) and manage planned absence (73 percent). And although more than half (59 percent) of retailers worldwide believe scheduling technology has a positive impact on staff productivity, more than a quarter (28 percent) are still using either spreadsheets or pen and paper to manage staff schedules.
Most retailers are embracing at least some workforce technologyâ€”yet increased adoption, particularly of solutions that specifically manage unplanned absence, would enable more managers to identify and analyze stable schedules that promote strong teams, assign shifts based on associatesâ€™ preferred availability, and automate shift-swapping approvals to ensure real-time coverage for vacant shifts.
But thereâ€™s good news for retailers hungry for new technologies that can help solve their staffing issues. Not only do these solutions already exist, but theyâ€™re getting smarter. Recent innovations have delivered workforce management technology that can meet the expectations of workers who otherwise run their lives on their smartphones.Â Retailers can provide their associates with friendly self service solutions that support their needs for flexibility by empowering them to use those smartphones to request time-off, swap a shift, or request a schedule change.Â Employees who can collaborate with their managers to select shifts that fit their needs are less likely to call out at the last minute. Â Â At the same time, those solutions can also capture the attendance patterns and labor insights managers need to effectively schedule their teams and drive sales.
Boosting both employee engagement and the bottom line
Solving the unplanned absence equation can significantly reduce operating costs.Â According to the U.S. Department of Labor, labor costs on average represent as much as one-fifth of retailersâ€™ total revenue. According to retail managers in our survey, a new absence and shift-swapping solution has the potential to reduce overall labor costs by nearly 3 percent.Â In addition, our retailers worldwide are optimistic that an effective absence management solution could reduce unapproved absence rates by 18 percent on average.
The key is to empower employees with technology that enables them to manage their work schedules in a way that simultaneously supports their need for flexibility while still delivering the coverage and productivity required by their employers.Â Accurate and automated absence management technology can allow managers and teams to collaborate more effectively to maximize productivity and deliver an exceptional customer experience.
Now more than ever, retailers have an opportunity to deliver a differentiated customer experience by investing in technology that will enhance their associates experience.Â Associates who can work the hours they need while still attending to their lives outside of work are going to be more engaged, loyal, and effective at work.Â And theyâ€™re going to be the kind of ambassadors whoâ€™ll keep your customers coming back for more.
This article by Joyce Maroney was originally published inÂ Chain Store Age.
Shopper photo originally published in the Boston Globe.
Today's post is submitted by Joyce Maroney, executive director of the Workforce Institute at Kronos.
According to a recent survey of 800 retail managers across multiple countries we conducted with our research partner Coleman Parkes, Â for every 10 hours of in-store labor budgeted, more than one hour is wasted due to staffing misalignment caused by unplanned employee absence.Â We've written a lot about the impact of absence on business in the past, but not with this focus on retailers.Â As the holiday season looms, in this climate of record low unemployment, retailers are more concerned than ever about finding and keeping the right person in the right place at the right time.
We analyzed the responses of retail managers across Australia, Canada, France, Germany, the U.K., and the U.S. to examine the broad impact of absenteeism on retail organizations with more than 1,000 employees. According to more than half of retail managers worldwide (52 percent), absenteeism is one of their organizationâ€™s most difficult, complex, and time-consuming issues.
I sat down with our board member Mark Wales, a long time veteran of the retail industry, to talk about some of the key findings of this research.Â MarkÂ has more than 30 years of experience in the US, Europe, and Asia with leading retailers such as Starbucks, Ralph Lauren, Williams-Sonoma, Selfridges, and Tesco, where he has focused on implementing workforce management strategies and solutions to drive company performance and customer experience by investing in the retail employee experience.
You can listen to a podcast of our conversation at the bottom of this post.Â We discuss key findings of the research and Mark's recommendations about why these issues occur and what store executives and managers can do to improve their planning for and response to staffing issues.
In the podcast, I posed the following questions to Mark:
Click on the player below to hear Mark's answers:
Today's post is courtesy of our board member Bob Clements.Â Bob is Senior Principal at Axsium Group,Â a leading workforce management consulting firm.
Â The gig economy is a hot topic with human resource and operations professionals around the world. Itâ€™s now estimated to make up about 30 percent of the workforce in North America and Europe with numbers growing steadily.Â At its core, the gig economy isnâ€™t a new concept. Contingent and temporary labor has been around for as long as people have earned compensation for work. Whatâ€™s different today is the technology involved. Itâ€™s made it much easier for temporary workers to find gigs and companies to find the giggers.
Though there are new opportunities for businesses and workers, itâ€™s also brought on some controversy. When we consider lower wage, hourly jobs like those often found in the retail and hospitality industries, the gig economy has the potential to make whatâ€™s perceived as a problematic employment situation even worse. Imagine a scene where retailers, restaurateurs and hoteliers jettison part-time employees in favor of gig workers who must bid against each other for shifts. If you think these industries get a bad rap now because of poor pay and inconsistent hours, imagine the public outcry if a situation like this one played-out.
Today, many of the retail and hospitality clients I work with recognize how important their associates are to the success of their business, so itâ€™s unlikely that such a development could take place. Stores, restaurants and hotels depend on customer service; a race to the bottom with wages will directly impact the customer experience, resulting in negative consequences to earnings. Instead, to drive financial performance, theyâ€™re seeking ways to give employees more hours and better training to increase retention. I believe the gig economy can do a lot to help promote that goal. Here are three potential scenarios that can work.
Scenario 1: The internal gig economy
The first scenario creates a gig-like economy inside of your company by making it easy to share employees between locations. Today, administrative rigor and out-dated technology make it difficult for stores, restaurants and hotels to do this effectively.
By creating an internal gig economy, a casual dining chain, for example, would open up shifts (gigs) to all locations in a certain geographic area. Team members would go online and build their schedules by picking up the gigs at locations and times convenient for them.
As with each scenario, rules would be put in place to ensure employees only pick up shifts theyâ€™re qualified to work, that comply with all applicable laws and policies, and canâ€™t create overtime without approval.
Scenario 2: The seasonal gig economy
Many retailers already use seasonal staff to flex up and down at scale. A good example of this is Target in the U.S. At Christmas time,Â Target hires around 100,000 people, on top of their 325,000 other employees. Though the gig economy is similar to seasonal hiring it represents a shift in mindset and a better use of technology, particularly related to the mobile scheduling tools used.
The scenario for a retailer adopting into the gig economy, would look something like this: A retailer would band together with other retailers that have complementary seasons. For example, an electronics retailer that hits its peak in December, an office supply retailer with a strong back-to-school peak and a DIY retailer with a spring planting season could form a â€œgig coalition.â€
Each retailer would staff itself with the full-timers and part-timers necessary to handle its off-peak demand. The coalition would also start to create a pool of seasonal workers that could transition from retailer to retailer as seasons change. Shifts would be posted and shared where workers in the seasonal pool could pick up gigs, giving each retailer coverage at critical times of their individual businesses.
The benefit for retailers is that once the seasonal pool has been on-boarded and trained for the first season, the same employee is ready with a little updated training for subsequent seasons. The benefit for employees is that they have steady, reliable work during the most exciting time of each retailerâ€™s season.
Scenario 3: The private gig economy
Arguably, the second scenario is easily extended to create a â€œprivateâ€ gig economy. Here companies share associates all year, with employees picking up shifts at retailers in the gig coalition whether itâ€™s in-season or not.
Today, employees work multiple jobs to make ends meet. Both the employee and the employer have to manage conflict. In the private gig economy, known, trained employees can work across retailers and are empowered through technology to manage their schedules and avoid conflicts between employers.
Making the right choices
Thereâ€™s no doubt that the gig economy is set to change the way the retail and hospitality industries manage their workforces. Though there are a number of scenarios that can work, applying the right processes and technologies to take advantage of the changing workplace will help to achieve substantive advantages â€“ for employers and their workers.
Today's post is courtesy of our board member,Â Mark Wales.
Recently, weâ€™ve seenÂ 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 thatÂ more than 8.5k stores are projected to close in 2017Â 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:
â€¢ All employees are not created equal. Experience, tenure and capability matter and significantly impact productivity.
â€¢ Stores themselves vary in format, customer-flow and sales mix.
â€¢ Weather, transportation patterns, special events and numerous other factors (even the stock market), can influence local demand in variable ways.
â€¢ 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 youâ€™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.
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