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Keeping retail afloat amidst a constrained labor market

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In the onset of the COVID-19 pandemic, the global labor market saw massive disruptions, with several critical industries, including retail, taking a direct hit. Following the shutdowns and the layoffs came what was dubbed “the Great Resignation”, in which millions of workers across the globe handed in their notice.  Since then, the phrase “labor shortage” has been a buzzword on the forefront of many retailers’ minds. But the concept isn’t new, the record high numbers have just brought the key issues behind it into the light.  And with many businesses coming back online, the need for a sustainable solution is more dire than ever.  

While staffing and recruiting play big roles in combating the labor shortage, there are other factors that contribute just as much to the overall solution. So, the question businesses are asking is what strategies should be deployed to alleviate pain points for themselves, their employees, and their customers despite the constrained labor market?

Strategy 1 – Allocate labor for greater efficiency 

Hiring an influx of new associates may seem like the best answer for a business looking to be more productive; however, the most efficient solution actually lies in optimizing the talent  already on-deck.  No two associates are alike, each has their own unique set of strengths and weaknesses, personal schedules, and expertise, which can get complicated for managers to keep on top of when creating a store’s schedule.  Still, 57% of retailers manually create weekly employee schedules. Oversights and inefficiencies when scheduling can decrease retail performance and cause workers to become burnt out, not to mention the significant amount of time it takes to create said schedules. Turning to artificial intelligence (AI) can drastically improve overall performance by analyzing historical data to create the optimal schedule, even in the event of unexpected staffing shortages.

Strategy 2 – Keep store managers active on the floor

Store managers are highly valuable and often overlooked when it comes to discussing associates.  In many cases, they are the most knowledgeable resources a store can have, but more often than not, you can’t find them on the floor- why is that?  Store managers are the ones largely responsible for the administrative, back-office support work, which at times can be endless.  Just like with the scheduling dilemma, automating manual reporting and planning processes can optimize manager performance as well.  Utilizing AI for planning and analysis has been shown to save store managers 6 hours of administrative work each week, meaning they have more available time to assist on the floor and make sales.  Keeping store managers on the floor leads to overall improvement in store performance (we’ve seen  2% comp growth), even during labor shortages, while also cutting down on operational costs.

Strategy 3 – Train new hires faster and more effectively

New associates need to become brand experts across channels almost instantly, but there aren’t always enough resources available to help train them.  The solution is simple- use the same tools and systems that current associates use and apply them to new hire training.  By embedding training and instruction into a system that automates tasks using a step-by-step approach, new hires can get realistic hands-on experience as soon as they walk in the door. In order to make this work, technology needs to be intuitive. Utilizing modern interfaces , instead of outdated POS systems that rely heavily on memorization, ensures a quick learning curve as well as uniform education.  

Strategy 4 – Create stronger pathways for associate success

The retail shopping experience is quickly moving to an channel-less approach, and in order to sell effectively, store associates need to be moving with it, instead of being confined to just one space.  Associates need to be able to see beyond just who is in their store and what products that location has.  By branching out with systems that link online and in-store, associates can access the full breadth of products the business offers and connect them to customers online and across channels. Giving associates the power to be able to communicate and sell to customers from anywhere opens up the door to new possibilities where customers can pre-book  appointments, send personalized product recommendations, and even chat through WhatsApp or live video.  It’s also important to provide organizational tools to keep track of customer interactions, preferences, and next steps  so that associates  don’t need to memorize the data and remember to follow up themselves. Retail is competitive and associates need to be equipped to consistently deliver the unified experience customers expect and drive sales. 

Strategy 5 – Motivate talent to stick around

Perhaps one of the biggest and most obvious things a company can do to combat the labor shortage is to retain the talent they have.  Workers across the country are leaving their positions and seeking better offers and the reason is purely that employees want to know that their company is as invested in them as they are in it. Retailers need to focus on retaining top associates by providing fair compensation, advancement potential, and meaningful work. Employees want to find purpose in their work, and a big part of that lies in measurable metrics of success. When employees are able to see their impact using tracked metrics they feel more fulfilled in the work they are doing.  Similarly, managers can also use these metrics to identify an employee’s strengths, as well as areas needing improvement, this can help track the performance of the entire store.  This performance planning also allows corporate to efficiently allocate resources based on where they’re needed and what moves the needle. 

Strategy 6 – Expect employee turnover and manage it systematically

Finally, even when retailers do it all right, some turnover is still inevitable. When those transitions take place, store tasks, processes, and customer relationships need to be able to continue without disruption.  This is where all of the above strategies come into play: The systems, processes, and tools all work together to form a seamless transition from one employee leaving to another walking in the door.  When all the information is stored and organized in a cloud-based system, it can be easily transferred from one device to another for quick access by store associates and managers.  This ensures that there are no gaps internally and when transitioning and continuing customer interactions between team members.

Overcoming the ongoing labor shortage may seem like a daunting task, especially as it disrupts “business as usual”, requiring retailers to abandon or upgrade their outdated processes and focus on equipping associates for repeatable and measurable success.  But, it’s important to remember that the changes retailers make now will better prepare them for future volatility and foster the transformation needed for success: More engaged staff, better margins, and increased sales. It’s up to retailers to deploy thoughtful, omnichannel strategies that cater to the needs of their store associates as well as they do their customers.  Download the full white paper here to learn more about the labor shortage, and what your business can do to help combat it.

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