Frontline retail workers were some of the hardest hit by the pandemic. It changed their roles almost overnight and raised questions about their work.
Hampered by a lack of job flexibility, stability, and stigma around career progression and meaningful work, retailers are struggling to attract and retain talent.
In this guide, we take a look at the most recent and compelling research to understand the labor shortage, what it means for retailers, and how technology can be part of the solution.
The labor shortage - what is happening?
Frontline retail was in a struggle for talent prior to 2020, but the pandemic proved to be a tipping point. It caused employees to re-evaluate their positions and what they value from work even more than they did before.
Titled ‘The Great Attrition’ or ‘The Great Resignation’, frontline workers have been leaving their roles at a record pace.
Research from McKinsey indicated that 40% of retail employees surveyed were likely to leave their current job in the next 3-6 months.
It has left a pretty big hole in the retail industry. A study from the US Chamber of Commerce identified how big that hole is.
If every unemployed person with experience in the retail industry were employed, the industry would only fill 70% of the vacant jobs
This also points to an issue with attracting people to the sector to work.
With Generation Z making up an increasingly bigger pool of available applicants, their new attitudes to work are creating alternative career paths involving side hustles and ‘gigs’ that give them a greater sense of self.
Reasons often cited by employees for leaving or not wanting to work in retail can be quite broad. Including a sense of belonging, feeling valued and listened to, doing meaningful work and access to technology.
It’s a lot to address. It will vary between retailers depending on their offerings, but these factors offer a fair representation of what is a global issue.
With all this in mind, it is no wonder that 99% of retail leaders are worried about talent shortages.
And with good reason, there is plenty at stake.
Impacts of labor shortages
Let’s explore what the impacts are for retailers when it comes to having a shortage of labor.
First up is the most obvious. If you don’t have enough workers, then you won’t be able to provide the products and services at the level you desire.
Despite the surge in e-commerce, physical retail is still the preferred channel for the majority of shoppers. The tangible benefits of seeing, touching and immediately getting products are hard to beat.
But introduce checkout queues, stock and pricing errors, and poor customer service caused by a lack of staff, and retailers may find that their customers are getting those tangible benefits elsewhere.
Even for those that shop online, labor shortages still have an impact. Take for example, the rise of in-store order fulfillment. It’s a labor-intensive task. Someone has to physically get around the store, find items, pick them and pack them. And that is just one part of an order fulfillment process that involves front and back-of-house tasks. If you are short on staff, then it will start to impact delivery timescales and order quality.
Locality is a major factor in physical retail, especially in grocery shopping. But online, the barriers to switching are much lower and are more determined by delivery slots, product availability and price.
A costly issue
If you don’t have enough staff then the solution is simple. You need to hire more. This is an expensive process in time and money and not easy when the talent pool is running dry.
A Glassdoor survey suggested that the average US employer spends 24 days and $4,000 dollars hiring a new worker.
This figure is just for one worker. If you are a large retailer with stores across the country then you might be on the hunt for hundreds or even thousands of new staff at any given time, especially during peak season.
According to data from the National Retail Federation, 1 in 4 Americans work in retail. So the labor shortage isn’t just a retail problem.
It’s a national economic problem.
Many sectors took a hit during the pandemic. But not all. Some retailers saw large growth, mainly from e-commerce, as consumers made adjustments to their lives during that period.
But while profitable, it was a testing time for retail employees among many others.
The hangover is still being felt by those left on the frontline. With more tasks to do and the requirement to deal with new expectations from customers, daily work can be a struggle.
A sales or store associate is now expected to do many tasks, both front and back-of-house. Some are tedious, like inventory counting, while others like assisting customers require skill and knowledge.
More tasks and fewer workers can leave employees feeling burned out. Job satisfaction can really take a hit.
Retailers face a battle to avoid a never-ending cycle of unsatisfied workers and a struggle to retain them.
Links to customer satisfaction
On the end of an unsatisfied employee is often a customer. The link between employee job satisfaction and customer satisfaction cannot be underestimated.
Harvard Business Review conducted a study to answer the question ‘can companies help to achieve high customer satisfaction by investing in employees and ensuring that those who deliver goods and services are themselves satisfied with their jobs?’
The results? Pretty emphatic.
A happier workforce is clearly associated with a company’s ability to deliver better customer satisfaction — particularly in industries with the closest contact between workers and customers, such as retail.
Equally, IDC came to the same conclusion and linked to wider business benefits with 85% of respondents to a survey agreeing that an improved employee experience and higher employee engagement translate to a better customer experience, higher customer satisfaction, and higher revenue for their organization.
A quick recap
Let’s regroup. There’s a retail labor shortage and employees are struggling with an unmanageable workload. It can cause dissatisfaction which correlates to customer satisfaction and beyond.
So what can retailers do to improve employee experience and attract and retain talent? Referencing back to the reasons why employees are leaving their posts, one thing links them all: Technology.
Not feeling valued and listened to often stems from concerns about daily tasks and the tools provided. And automating manual and tedious tasks would allow them to concentrate on more meaningful work.
Research backs this up and confirms that a lack of or poor technology is often a cause of employee disgruntlement.
With that in mind, it is crucial to get the provision of technology right.
How can technology help?
The right technology can solve several pain points that frontline employees face.
For retail, the trend is shifting toward smart devices. Take Walmart, for example. They have invested in over 740,000 smartphones to equip each store associate with their own device.
When the right technology is provided, workers feel empowered.
That empowerment stems from feeling listened to, invested in, and having the control and power to execute their jobs to the best of their ability.
Smart devices have several advantages over dedicated devices when it comes to optimal performance and job satisfaction:
- Smart devices are familiar and easy to use
- They enable employees to work faster with fewer errors
- Very little training is required for onboarding so scaling with seasonal peaks is easier
- Many store associates fit into the Gen Z and Millennial demographics and have a greater expectation to use mobile technology
- Smart devices are flexible and can be used for a variety of store operations tasks rather than switching between different devices
- A Corporate-Owned, Personally Enabled (COPE) device strategy can act as a way to attract and retain talent
- Smart devices can also be used for better communication between teams
Job satisfaction isn’t the only thing that technology can improve. A retailer’s ability to get talent through the door in the first place may come down to its employee tech offering.
Using the right devices is certainly a great first step. But what those devices are capable of, and therefore what employees are able to do, is really dependent on the software they are equipped with.
Going the extra mile for employees
If retailers really want to deliver on their promise of giving their employees the best tools, then they should look no further than smart data capture.
Defined as the ability to capture data intelligently from barcodes, text, IDs and objects. Smart data capture enables real-time decision-making, engagement, and workflow automation at scale.
It allows store associates to use the camera on a smartphone to perform data capture and tackle multiple and varied operational tasks.
Scandit Smart Data Capture goes a step further.
It can enable employees to perform tasks at a speed they can only imagine. While providing them with the insights and confidence to better serve customers. All on a single device suited for front and back-of-house tasks.
They can be unburdened from tedious and repetitive tasks that require manual counting and heavy scanning such as receiving goods. Improving productivity and efficiency as workflows are accelerated and errors are reduced.
Relieved from some tasks, employees are empowered at others.
Regardless of the level of prior experience of the employee, arming them with the ability to answer any question, anywhere in the store is a distinct advantage. One that will help drive job satisfaction.
Upskilled with product and customer insights, employees can become high-value sales consultants. Confidently assisting the customer and speeding through loyalty sign-ups and checkout using ID Scanning and mPOS.
Giving the customer an experience to remember and the employee the satisfaction of a job well done.
The retail labor shortage is a complex puzzle. One that cannot be solved easily. The stigma around benefits, flexibility and rewarding work holds the sector back as a new generation enters the labor market. And adjustments are still being made to a change in attitude and shopper behavior post-pandemic.
But a part of the puzzle that retailers can control and take action on now is the technology they provide. The data shows us that employee attraction and employee and customer satisfaction are all linked and impacted by the tools workers use.
Compared to the level of investment and adoption of tools at the desk-based level, retail employees have been left behind. They deserve the best and the survival of some retailers may depend on providing it.