Managing hourly associates has always been a key challenge and critical differentiator for retail brands. Today, between local and nationwide movements for a higher minimum wage and growing regulatory scrutiny over hourly labor scheduling practices and increasing competition from low-margin online retailers, traditional retailers are being forced to rethink many of the in-store management tools and processes they’ve become accustomed to.
Earlier this year, WorkJam set out to survey 250 retail store, district and regional managers from organizations with at least 5,000 employees – who have direct insight into both the hourly worker experience and their head offices’ objectives – to get a better sense of the obstacles they and their staff face, and more precisely measure how these issues affect retailers’ bottom-lines.
Here’s a look at what we found:
- Most retail hourly associates aren’t engaged at work – and it’s costing their employers. Eighty-nine percent of retail managers we surveyed admit that it’s difficult to keep their employees motivated on the job. Given this universal challenge, we weren’t too shocked to learn that only 17 percent of managers say their associates are very engaged at work. Employee disengagement can trigger costly turnover, resulting in additional expenses needed for hiring and training replacements and a degraded quality of customer service. That said, increasing associate engagement can lead to much more positive repercussions. Of managers whose employees are not very engaged, 50 percent feel that more engagement would let them achieve – at a minimum – up to 10 percent in additional revenue.
- Today’s scheduling technology falls short of managers’ and associates’ needs. As we’ve discussed in a report earlier this year, workforce management (WFM) solutions are retail managers’ go-to resource for predicting labor needs. Despite the industry’s reliance on these tools, 72 percent of managers are not very satisfied with their WFM systems’ ability to align with both their business needs and associates’ shift preferences – and for good reason. WFM technology’s shortcomings manifest as real operational challenges including understaffing (which 88 percent of managers contend with weekly) and extra time spent adjusting set schedules (which 70 percent of managers do regularly.) Incompatible shift assignments don’t sit well with associates either, perpetuating their frustration and disengagement from their job.
- Managers control communication between the head office and front lines: Our study also probed deeper into the relationship between retailers’ head office teams and their hourly employees. Though 71 percent of managers say that their organizations depend on the frontline to act as brand ambassadors, many associates lack the resources to be effective. Almost half (46%) of respondents report that the primary way their corporate headquarters shares information about new products or promotions with hourly employees is by communicating with managers only. This puts pressure on already busy managers to relay important updates to their staff, with no sure way of preventing certain details from getting lost in translation. This is more than a process issue. Frontline workers who aren’t equipped with the right information reflect poorly on a retailer’s overall brand and customer service quality, preventing stores from meeting their full revenue potential.
Retailers can’t afford to maintain this status quo. Download the full WorkJam study to learn more about how retail leaders can address the root causes of employee disengagement to the benefit of their workforces and their bottom-lines.