May 1, 2015
One of the biggest challenges for retailers today is to maintain a flexible supply of labor in the face of mounting pressure to sell more while all the while keeping costs in check. In this age of automation and data-driven decision making, retail store managers still find themselves spending an exorbitant amount of time piecing together a jigsaw puzzle of available hours, only to find themselves continuously falling short of customer and employee expectations. Indeed, many store managers find themselves having to hire an increasing number of part-time labor to keep costs down. However, because the part-time work force can’t get the required hours to support themselves, they end up working multiple jobs; and because their time is split between multiple jobs, they’re often not available when needs arise, especially last minute.
Sound like a problem you’re familiar with? Despite these challenges there are steps that progressive retailers have taken to change their mindset regarding labor, from purely cost cutting measures, to strategies to optimize labor utilization because they realize the long term impact this will have on enhancing the in-store experience, which will make or break their business in the face of ever-increasing competitive pressure and thin margins. The following are some ways in which retailers today can achieve the higher level of flexibility in their labor supply to meet ever-changing customer demand, while at the same time increasing employee satisfaction and managing labor costs:.
One of the most effective means to achieve this flexibility is to provide tools that increase communication and collaboration between associates and managers. Web and mobile self service applications that empower associates to manage their own availability and schedules are a great way to facilitate more frequent communication between associates and also with management. Leaving the manager to merely approve a shift swap that has already been negotiated between 2 associates via a mobile app, will significantly reduce the administrative burden on managers while increasing the probability of being able to fill last minute schedule vacancies. Self service apps can also enable employees to communicate more readily and frequently their on-call availability, providing visibility to a ready labor pool during unforeseen swings in demand.
Another effective strategy is to leverage availability across stores in a region. A single store has limited human resources, but extending visibility and collaboration across stores, with perhaps the same web and mobile self service apps, could enable stores in the region to more effectively pool their resources. Managers are happy because they’re able to staff the right resources at the right time, the customers get the service they need, and employees feel motivated because schedules are more aligned with their availability.
The benefits of augmenting the work force with part-time labor are compelling, since demand fluctuates and it’s often easier to fill open shifts with part-time employees as and when the need arises. However, employers must note the median turnover rate of 67 percent per year for part-time retail employees. So the gains you thought you made in costs could end up costing you more in replacing and re-training new employees more frequently than expected. To stem this tide, retailers can consider providing the right incentives to retain and leverage their existing staff. Instead of incurring the exorbitant overhead of hiring and training additional labor to staff for peak demand, companies can provide attractive bonuses to existing staff to work the extra hours. Combine monetary incentives with more extensive training and the opportunity to learn new skills, and you may have a winning formula to motivate staff to work the extra shifts.
Finally, it also helps to have a few sources of 3rd party temporary labor to complement your workforce for those unexpected and seasonal peaks, where demand just can’t be supported with in-house staff alone. Traditional retail temp labor agencies like Quest and SASR have been reliable sources of retail labor across multiple disciplines. However, there is a new generation of crowd-sourced labor that has disrupted this market, providing a lower cost alternative to source mainly back-office tasks that require less training and functional expertise. Companies like Gigwalk, CrowdFlower, and Wonolo are providing a more cost efficient and expedient way to deliver large projects that can be broken down to simpler, micro-tasks, but again, employers are advised to utilize these services for simple projects that do not require a high level of domain and industry expertise.
Because the face of retail is changing rapidly from a primarily transactional environment to one where the in-store experience is becoming a more critical differentiator, it is all the more important for forward-thinking companies to pursue creative ways to develop and retain a high-performing, motivated, and flexible labor force. We’ve shared our thoughts, but would love to hear your ideas on how to staff for competitive advantage.