This blog was written by Dave Hamilton with contributions from Kim Hill, Bill Bozeman, Josh Buck, and Steve Kish
Managing labor today is difficult. Companies are asked to balance the needs of customers, high operational costs, and diverse employee preferences in a labor market restrained by labor shortages, high turnover, wage pressure, safety and compliance regulations, and seasonal peaks. Companies need to address labor challenges with flexible scheduling, time and attendance, compliance, and planning to reduce turnover and achieve higher productivity. During a recent Blue Yonder Live session, a panel of workforce experts discussed today’s workforce challenges and how Blue Yonder’s Workforce Management solution offers optimized scheduling, real-time visibility, and mobile self-service options, creating happier employees and smoother operations.
What are industry leaders saying about their labor needs today?
- Poor Customer Experiences: Retailers are recognizing the importance of driving both a great online and in-store experience. A recent survey from McKinsey showed that 75% of shoppers shop both online and in-store with 20% of shoppers only shopping in store. Shoppers are also less loyal to a single brand and choosing to shop across brands for the best deals. One of the challenges facing retailers is that 64% of consumers say that a negative in-store experience would prevent them from shopping with a retailer again (according to a PowerReviews “In-Store Shopping Trends & Preferences” survey). This means that focusing on the customer experience and delivering upon their expectations is critical to success. If you were to ask shoppers what they look for most in their in-store experience, you’ll likely hear access to knowledgeable and helpful employees as a top response. Retail employees really are critical to the customer experience so ensuring retailers have happy and available employees is vital to their success. But we know that planning and retaining workers is tough in today’s landscape.
- High Turnover: Retainment of top talent is paramount in the industry today. We are constantly hearing from prospects that their employees are consistently jumping for “better opportunities / promotions.” But why is that? Over the last decade in retail, we have seen retailers make a concerted effort to focus on the customer journey and maximize the customer experience. In result, customer satisfaction and retention are maximized. And while that is great for the business, unfortunately, many retailers have failed to make similar efforts for their employees and, as a result, we see engagement with those associates deteriorating over time. They become more and more likely to look for: higher hourly pay, sign on bonuses, more opportunity, or a promotion. When we dig into the underlying issues, we find that a significant number of these employees are not satisfied with their schedules, the hours, the shifts, or the days that they are scheduled simply don’t align to their life outside of work. The solution to this is greater FLEXIBILITY for the frontline associate. Offering flexibility is the first stride to becoming the “Employer of Choice” that some many people desire.
- Unplanned Absences: Today, many retailers are seriously challenged by unplanned absences and this is likely due to the lack of flexible schedules. Customers trying to find knowledgeable associates becomes much harder when those experts don’t come to work. Personal issues have always contributed to absenteeism, such as: family commitments, health issues, burnout, accidents, and deaths in the family, and those events will never change. However, there are poor communication issues between associate and employer that increase absenteeism, such as a time off request not submitted or failure to communicate changes in availability.
After several call-offs or no shows, the employee self-terminates themselves based on company polices. Moreover, high-turnover rates are demoralizing for the current staff and the will to go into work diminishes. That low moral has a direct effect on customer satisfaction as previously mentioned. Also, counteracting absenteeism puts organizations in the boomerang effect by causing them to overschedule, which becomes costly when everyone shows up and you must send people home. This also reduces morale by potentially hurting associates financially as they relied on that shift to pay bills. Our Blue Yonder Workforce Management solution provides both associates and managers the engagement tools to reduce absenteeism.
- High Labor Costs: Almost 10-15 years ago, it was all about labor costs; however, it was told from the perspective of older systems, overscheduling and creating better schedules that will reduce my labor spend. Now when this comes up, most retailers are saying, “Don’t even talk about reducing labor because we are cut to the bare minimum.” High turnover rates, means you must hire more and the cost to hire isn’t cheap. Unplanned absences mean someone must cover that work, which often results in overtime. And all this has led to retailers getting more creative and advanced in how they use their labor. How can new technologies help retailers use labor in better and cheaper ways? If retailers are cut to the bare minimum and hiring and retaining employees is so hard, retailers are finding alternative ways in how that labor is being used.
With these challenges, what are retailers doing to manage their workforce differently?
- Dynamic Scheduling: Retailers are really looking at how they plan within their budgets while also driving a great employee experience which then drives great customer service. One of the trends we’re seeing in EMEA is moving away from siloed roles that tend to be highly repetitive and not very engaging or interesting for the workers. Retailers are looking to offer a more diverse work experience where employees are multi-skilled to work across different roles and even locations in the business. Achieving this through manual scheduling is nearly impossible as managers don’t have time to give each employee two or three job assignments per shift while also aligning to the demand needs and budget. Automating this process while also applying pragmatic rules means dynamic scheduling can be achieved in a way that works for everyone. Employees have a more diverse work experience, and the business can maximize on their workforce skillset and be a more appealing place to work.
- Shift Marketplace & Opening Up Shifts: What’s no longer popular is traditional scheduling processes owned by shift leads / managers. There’s an old mindset by organizations and managers that they “own” the associates. Meaning, you work when I tell you to work. That outdated view does not work today, and you can see it in organizations running 150% plus in turnover. The labor market will not be treated this way any longer and you can see it daily on the news with people organizing for better working conditions. Associates are more technical then ever and demand tools to interact with their employer. Associates want to be empowered to have more input into their schedules, along with better communication tools, and a shift marketplace to address scheduling conflicts and desires. Blue Yonder has created a fully digital, mobile enablement model on one platform for easy access and employee self-service. We have helped retailers see double-digit reductions in absenteeism and turnover with these associate engagement tools.
- Employee Preferences & Ownership: In the corporate world, we hear about work-life balance all the time. Don’t hourly associates have a right to that balance as well? Dictating schedules to hourly associates without understanding them and the personal challenges that they are trying to balance outside of work is no longer the norm. In an effort to become an “Employer of Choice” that isn’t challenged with no shows, call offs, and turnover, leaders must think differently about how they engage with frontline employees and how they are scheduled. What is now needed is a higher focus on scheduling flexibility for hourly associates that allow employees the ability to construct their ideal schedule and make every effort possible to meet their desires/needs. This includes things like preferred shifts on a day, hours, day off, length of shift, job role, etc. Technology that captures this information and optimizes schedules for not only the employer, but the employee as well is how Blue Yonder’s Workforce Management solution is designed.
- Interoperability: All these points around employee flexibility and preferences, turnover and balance of customer and employee needs, and the growing regulations and compliance issues has labor being very challenging due to the dynamic nature of how it is used. Retailers want to move from a floor reset calendar with a major reset once a year and several minor resets towards a smaller floor and planogram reset that occurs on a regular basis. The rise in online ordering, technology that is becoming more affordable such as electronic shelf labeling, computer vision technology, and the frictionless stores is making labor challenging to plan and schedule. We are moving from this concept of planning and executing, like planning for a reset and then executing on that reset, to what retailers really want which is to plan TO their execution. This means building a plan that involves knowing labor restrictions and that can be executed on. This involves interoperability between supply chain and labor, which is becoming critical as retailers are changing how their labor is being used.
Hhow does workforce play into a company and their supply chain?
- Category Management – Space Planning – Planograms: Seasonal and promotional display resets are very labor intensive. Budgets to perform planogram changes are limited so organizations need tools such as Blue Yonder’s Category Management and Workforce Management solutions to better inform the store about the labor required to perform these resets. No associate likes to hear 30 minutes before their shift ends that an end cap needs to be setup. That is why the interoperability between Category Management and the Workforce Management solutions is important. Missing a promotional display setup because the store did not schedule the labor can reduce profitability and anger customers expecting to find these promotional items. The knowledge share between Category Management and Workforce Management makes for a smoother transition in handling resets by making sure the right resources are scheduled to perform those display changes and they are done on time.
- Order Management – In-Store Pickup/Delivery: Retailers need to ensure a great customer experience in the store, as well as online, and these two channels cross paths when it comes to consumer expectations. As retailers have been adapting to the demands of the omni-channel shopper, they’re now leveraging the stores to support e-commerce orders. Today, orders are often being collected in-store or being fulfilled and shipped from the store. Both activities have an impact on in-store operations and retailers need to ensure they can fulfill those online orders while also giving great service to their in-store customers. To achieve this, the Order Management System (OMS) needs to understand labor in the store. Blue Yonder’s OMS can take both store and warehouse labor availability into consideration when determining how best to fulfill an order. For example, a store may have inventory for a set of items on order; however, they’re understaffed and don’t have capacity to fulfill the order. In this case, a different store or warehouse would be a better fulfillment option. Another approach could be to increase labor in the store through adding a shift to the shift marketplace. With both approaches, labor needs to be considered to deliver a great online experience and we can achieve this through our combined Workforce Management and OMS capabilities.
Another area where we’re supporting both the online and in-store experience is through the planning and execution of in-store picking activities. Stores need to have the right number of hours to support e-commerce fulfillment, and this is driven by the orders from the OMS and labor generation in Workforce Management. Blue Yonder can also drive labor efficiencies through optimized picking of orders. Blue Yonder offers an in-store picking solution for execution of all order picks that is great for retailers with many online orders or if they are picking for their own orders, as well as from third-party delivery services.
- Warehouse Labor Management: We’re seeing more and more retailers consider, and in many cases deploying, an enterprise approach to planning and schedule labor that includes both retail employees and the broader supply chain. This is incredibly exciting for Blue Yonder because we have interoperability across so many of our solution that helps us understand the explicit challenges that are faced in the supply chain. For example, data points from Warehouse Labor Management can help us understand how effectively and efficiently each frontline associate is performing their tasks, our OMS and Warehouse Management System can provide immediate visibility to incoming orders, our Transportation Management System can help understand when and where trucks and trailers are arriving and departing from both stores and DCs. With all this information in one platform, the possibilities to seamlessly plan and execute labor are extremely exciting.
- Blue Yonder is investing $1B over the next 3 years in R&D: Earlier this year, Blue Yonder announced it was investing $1 billion into our company’s R&D. Supply chains don’t run effectively and efficiently without a well-planned labor force. And with everyone needing a higher degree of connecting their supply chain with their labor, Blue Yonder is the only company out there that can make these connection points within one single provider.
Blue Yonder’s Workforce Management solution brings great value to our customers. If you are a retailer, warehouse operation or a manufacturer looking to improve your employee retention, engagement and employee satisfaction, learn more here.
Blue Yonder “powers” businesses to grow and evolve. Learn more about Blue Yonder’s leading end-to-end solutions for retail here.
