WorkJam’s new study finds retailers’ inefficient staffing processes and lack of adequate workforce engagement tools cause retailers to leave money on the table
Retailers’ ongoing struggle to keep their hourly workforce happy and engaged is impacting their profitability, according to a new study titled Factoring People into the P&L Equation by employee engagement management platform WorkJam. The study found only 17 percent of retail managers feel their stores’ hourly associates are very motivated and engaged. As a result, almost half (47%) of managers say at least five percent of their staff quit in an average three-month period.
Poor staffing practices are one of the largest barriers to hourly employee engagement, and it also happens to be one of the most crucial elements to the hourly worker experience. However, the tools and processes retail managers currently use are falling short. Seventy-two percent of managers are not satisfied with their workforce management system’s ability to create schedules that accommodate both store labor needs and associates’ preferences, and 62 percent of managers admit associates have quit over ongoing scheduling conflicts.
“Employee engagement needs to be more than a ‘feel-good’ corporate initiative for retailers,” said Steven Kramer, co-founder and CEO of WorkJam. “Most retailers don’t realize the significant financial impact employee engagement has on their bottom line. If they want to increase profitability, they need to start at the root cause and adjust how they engage their workforce.”
High turnover forces retailers into spending more on hiring and training replacements, directly affecting retail sales and financial health. Sixty-three percent of retail managers believe reducing turnover by as little as one associate per month could lift monthly revenues by at least six percent. In addition, 70 percent of managers clock extra hours to handle administrative duties like reassigning and swapping employee shifts. With the new U.S. overtime regulation slated to go into effect soon, the hours that managers spend rearranging schedules can become exponentially more expensive.
Some other highlights from WorkJam’s study, which surveyed 250 retail store, district and regional leaders across the U.S., from organizations with at least 5,000 employees, include:
- 88 percent of managers say their stores are understaffed on a weekly basis, and almost half (46%) say their stores suffer from understaffing at least 10 hours each week.
- 55 percent of managers say the head office rarely or never recognizes hourly employees for doing good work.
“With wages on the rise and employees and lawmakers demanding more flexibility and predictability, retailers must take a serious look at improving the engagement of their workforce,” said Joshua Ostrega, co-founder and chief operating officer of WorkJam. “With better engagement, retailers can mitigate the frequency and costs of under-and overstaffing, inefficient back-office processes and employee turnover.”