Finding tailwinds amid the sector’s toughest headwinds
After the global disruption brought about by Covid-19 between 2020-2021, the retail industry was hopeful to witness a boost in traffic to brick-and-mortar stores and overall trade. Expectations were high in the run-up to Christmas last year1, for example. However, US retailers this year are facing turbulent times as the cost-of-living crisis, inflationary pressures, chronic labor shortages, and a possible shift in consumer spending2 threaten growth.
While all hope may seem scarce, historical examples show retail’s resilience against the toughest foes, such as the global financial crisis in 2008—a seismic event that shook the entire retail industry3 and beyond. For example, according to Euromonitor International, the global retail industry declined by 3% in 2009 but quickly recovered in 2010 with a 6% growth4.
In part one of our blog series titled, How retailers can tackle labor shortages with technology and achieve success, we discuss:
The US retail outlook is not all doom and gloom. There is a strong lingering sentiment among retail leaders that success can be achieved with the right strategy, technology, and lessons learned from past events. According to our recent survey, 59% of retail leaders are making a profit equivalent to pre-pandemic revenue. For 2023, we discovered that US retail is recovering and showing momentum, with 28% of the sector enjoying a boost in profit higher than pre-pandemic levels. In fact, some sub-sectors of retail, such as the entertainment, sports, and attraction sectors (33%), and the health and wellness sector (20%), are all experiencing revenue growth higher than figures seen before the Covid-19 outbreak.
However, the beauty and salon services experienced sluggish growth last year; with one in 10 businesses (12%) making less revenue than pre-pandemic. This is due to macroeconomic factors, such as increased cost of living and inflation. Nevertheless, our findings show that there is an abundance of hope and general optimism that awaits the retail sector this year.
1. Simplify and shorten hiring processes to win the war for talent
For a sector that has a high staff turnover, streamlining and shortening the hiring process can be greatly beneficial. Retailers must act quickly and automate the administrative tasks of reviewing resumes and booking interviews with workforce management technologies. By doing so, they can manage the end-to-end process efficiently, getting staff on the store floor sooner. Fourth’s PeopleMatter, an applicant tracking system (ATS) provides retailers with access to a broad pool of talent while reducing costs and automating the onboarding process. From posting vacancies to applicant screening and conducting interviews, it can help retailers ensure a smooth journey from hiring to the candidate’s first day at work, providing new hires with a positive experience and keeping them engaged from day one.
2. Consider employee needs and wellbeing by offering attractive perks
Retail leaders must also put the welfare and needs of their employees, which may consist of Gen Zs, at the forefront of their agenda to attract talent. According to our survey, almost all employees (94%) are worried about the impact staff shortages will have on their wellbeing which could result in feeling overworked and underappreciated. To address this, retail leaders can offer incentives, such as access to financial education tools to improve their financial health. Fuego is an on-demand pay app that allows employees to withdraw a part of their already-earned pay and tips for immediate use. By providing such benefits, retailers can play a significant role in improving their workforce’s financial health.
“The retail workforce is looking for more support from its leaders. As employee concerns grow around the impact of talent shortages, retailers that focus on engaging with and supporting their employees will benefit from a motivated and efficient workforce. It is integral that leaders keep employee needs top of mind alongside business success and invest in technology that will improve communication as well as more optimized shift scheduling, forecasting, and employee engagement.”
— Christian Berthelsen (CTO, Fourth)
3. Creating a positive employee experience and workplace culture
Fostering a positive employee experience by leveraging employee schedule ratings can help attract talent to physical stores that require an additional workforce. Five-star ratings on review sites, such as Yelp and Google reviews are a good starting point, for example. Gen Z particularly uses these forums to determine if a workplace culture is in line with their preferences.
More importantly, employee scheduling tools, such as the app HotSchedules, send employees a basic end-of-shift survey.
The results are anonymous, but employers can view this valuable data to see if certain teams are struggling which will help them understand the employee experience and how employee morale, retention, engagement, and customer experience can be improved. From the employees’ perspective, this gives them a voice and such positive experiences can help nurture a loyal and engaged workforce.
4. Optimizing labor costs and existing workforce
While shift ratings can give valuable insights for employees and retailers, HotSchedules also provides real-time data insights that help monitor labor performance, such as real-time and forecasted daily hours, overall sales for the day, weekly staff wage cost calculations, and more. This allows retailers to keep track of labor costs and when additional staff is needed, enabling them to focus on finding opportunities for improving daily operations and the overall shopping experience for consumers.
It is clear retailers can overcome labor shortages and achieve success with effective strategies that include the right technology partner to foster a productive workforce. After all, technology is not a panacea as it is accompanied by many opportunities and challenges.
We hope that you have found this blog insightful. For part two of our blog series, we will discuss how workforce management technology can be used to improve productivity and staff experience.
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