The Evolving State of Workforce Management

Retail workers are being asked to do more than ever before. One minute they might be stocking shelves, then helping a customer locate an item, only to be called into action filling a digital order for online pickup a few moments later. To ensure this all happens smoothly while simultaneously engaging with front-line staff during the ongoing labor shortage, retailers are upping their investment in workforce management solutions. Read on to uncover how your retail peers are leveraging modern workforce solutions to lessen the impact of outside elements on their staff, and where they are investing today to ensure happy employees tomorrow. To say that operating amidst the ongoing workforce disruptions has been a challenge for retailers would be an understatement. Rising wages, labor shortages, and evolving attitudes toward permanent employment have all made staffing the retail enterprise increasingly difficult. Retailers were asked for one word to best describe the current state of their workforce management capabilities, and not surprisingly most took a half-glass-empty approach in their response. Basic, evolving, lacking, limited, and bad were among the most common answers. While much of the industry is still struggling to normalize their workforce in a sea of disruption, a handful of respondents report that their workforce management abilities are adequate, improving, and solid (Figure 1). In addition to asking retailers to describe workforce management in one word, we also asked them for their biggest in-store employee challenges. A near unanimous 97% report that attracting and retaining staff are major hurdles, with 50% citing rising wages and 47% reporting scheduling as major components of the workforce puzzle (Figure 2). To solve the workforce conundrum, retailers are turning to technology, upping their investment in in-store workforce management software. For this year, retailers are allocating 11% of their in-store tech budget to workforce solutions, with a major bump to 16% anticipated for 2023 (Figure 3). While labor shortages and rising wages are not unique to the retail industry, what is distinctive to retail is the new set of responsibilities that are being thrust on its dwindling workforce. Over the past decade, and accelerated by the pandemic, retailers have introduced a host of omnichannel services to their stores to blur the distinction between digital and physical retailing and make the shopping journey more convenient for consumers. Nearly three-quarters (73%) of those surveyed offer in-store pickup of digital orders, 59% offer curbside pickup, 49% deliver from store, and 35% ship from store (Figure 4). Providing these omnichannel services quickly, seamlessly, and accurately requires flawless communication between employees, management, and corporate to ensure order information is disseminated to front-line staff precisely and rapidly. While traditional e-mail (83%) is still the most popular method through which corporate communicates with front-line staff, off-the-shelf task management software (50%) and home-grown communication solutions (38%) are being deployed at scale. In addition, mobile apps (35%) and text messages (35%) keep the in-store workforce informed (Figure 5). The commitment to communicating with in-store staff via a multitude of channels aligns perfectly with retailers’ technology-driven workforce strategies. Survey takers were asked for the strategies that will drive their employee approach over the next 18 months and 77% named improving engagement and retention, 62% said enabling a personalized customer experience, and 44% point to expanding their omnichannel initiatives (Figure 6). With retail associate responsibilities on the rise and recruiting and retaining talent a top priority across the industry, retailers are taking a long hard look at their training approach. Associates require more training than every before to ensure they can multitask with ease as well as fully capitalize on the next-gen technology they are being equipped with. In addition to preparing associates for the job they have now, a successful training program will plant the seed for growth within the organization. By providing retail workers with the skills they need to advance within the organization, retailers greatly increase the likelihood that new hires will stick around for the long haul. Currently, most new hires (65%) receive one week or less of training, with 25% receiving just one to three days of onboarding. One in four retailers provide new employees with two weeks of training, while 10% provide a month or more (Figure 7). While most associates receive enough training to learn the basics of their job before being thrown into the retail fray, many retailers believe the current level of training is not enough. When asked how much training employees should receive during onboarding, a resounding 73% said two weeks or more, with 35% pointing to a month or more of training to be ideal (Figure 8). Retailers told us that they are planning to increase their commitment to workforce management by upping their tech spend to 16% of their total in-store tech budget next year, up from 11% this year. The next logical question is: Where is this influx of funds going to be allocated? More than half of survey respondents report that they are up to date on foundational labor management capabilities including time and attendance (68%) and labor scheduling (53%). In addition, around four in 10 report modern software is in place for human resources and benefits (45%), recruitment and onboarding (40%), task management (38%), and education and training (38%). While a large percentage of retailers have invested in their workforce management capabilities over the past couple of years, much of the industry is still playing catch up. The biggest area retailers are currently investing in is education and training, with nearly four in 10 (38%) reporting they have started a major upgrade. Other noteworthy areas currently getting an upgrade include human resources and benefits (25%), recruitment and onboarding (25%), and employee engagement management/monitoring (20%) When asked what areas they plan to invest in over the next 12 months retailers point to employee engagement management/monitoring (30%) and mobile workforce and/or HR applications (23%) as the areas of greatest need. Methodology This research was conducted in April and May 2022. The survey was sent to retail executives at both large-scale and small regional chains. More than half of respondents (56%) are employed at retailers with revenue north of $500 million, with 30% working for retailers with annual revenue in excess of $5 billion. Specialty (27%), grocery/warehouse/mass market (25%), and convenience (20%) make up nearly three-quarters of the respondent pool. More than one in three (35%) of survey takers work in IT/technology, with significant numbers of executives checking the store operations (16%), marketing (14%), and customer management/sales (11%) box. Overall, 45% of respondents hold VP titles or higher, with an additional 35% employed as directors. Conclusion Ongoing disruption has made attracting and retaining in-demand retail associates extremely difficult. In response, leading retailers are upping their technology spend and investing in the digital tools necessary to engage with their workforce and allow them to shine in the fast-paced and evolving retail store. Key Findings 97% of retailers say attracting and retaining staff is a major hurdle, while rising wages (50%) and scheduling (47%) are keeping them up at night as well. Retailers are allocating 11% of their in-store tech budget to workforce solutions this year and plan to increase to 16% in 2023. 77% of retailers say improving engagement and retention is a top priority driving their workforce management technology approach. 65% of new hires receive one week or less of onboarding training. 38% of retailers are currently upgrading their education and training capabilities. Over the next 12 months, 30% will invest in employee engagement management/monitoring and 23% plan to upgrade their mobile workforce and/or HR applications.

Related Articles

Related Topics