For Retailers, the pace of change required to maintain success continues to accelerate. Millennials (those approximately born between 1982 and 1994), Generation Z (those approximately born since 1995), and the digital technology they thrive on, continue to push the throttle to the floor by fundamentally shifting retail from a channel-based push model to an omni-channel customer-centric one. This is causing immense challenges for stores, not least of which is staffing and managing the store workforce. Key workforce challenges retailers must overcome in today’s disruptive environment include expanding roles, a changing workforce and heightened regulations.
The store is central to omni-channel initiatives, and the workforce is central to their execution. Offering omni-channel services such as buy online – pickup in-store, ship-from-store and in-store return of online purchases requires expanding the roles of store associates to include functions such as picking, packaging and shipping that are traditionally done in distribution centers. Not only does this introduce new skill sets and training requirements, but it also impacts scheduling, measurement and compensation.
In the traditional store, associates were hired for, and the scheduling based on, serving the customers as they walk in the door. While associates may be asked to do a myriad of other tasks such as straightening and replenishing shelves, receiving inbound shipments or minor cleanup during slow selling periods, their primary focus, and the basis for measurement and compensation, is on selling.
Adding omni-channel fulfillment in stores introduces new functions and associate duties that are disconnected from the store traffic and selling history that were the basis for scheduling labor. Now retailers must also forecast the volume and timing of online orders that will be fulfilled in each store in order to schedule the right number of associates with the right skills to fill those orders when promised. They also must provide step-by-step instruction for the most efficient path and methods for fulfilling the orders. For example, can multiple orders be picked at the same time; should the items be picked from store shelves or the back room; and what should associates do if an item is out-of-stock? In addition, retailers must rethink how they measure and compensate associates for timely and accurate completion of these new tasks since they are disconnected from sales credit. Thus, the expanding roles required for omni-channel fulfillment are impacting hiring, training, forecasting, scheduling, task management, measurement and compensation.
As if the expanding roles of the workforce brought on by omni-channel did not add enough complexity, the changing nature of the workforce adds to the challenge. By 2020, millennials will be the majority of shoppers as well as the majority of workers, with Generation Z starting to enter the workforce as well. For many retailers, that is already the case. Millennials are digitally native technology users who both demand more knowledgeable service as shoppers and can provide that service as associates. They can be powerful assets for the business, but also pose new challenges since they have different motivations for work than their predecessors.
Millennials want work/life balance and flexibility in scheduling to accommodate their lifestyles. Pay is not their top motivation for working, so traditional incentive-based pay systems are less effective. With the struggle to attract and retain good talent, retailers must provide flexibility and transparency in scheduling, as well as offer anywhere, anytime mobile access to information such as schedules, pay details and benefits data if they want to effectively compete for this talent. Retailers should also equip these associates with mobile tools to enable them to provide the knowledgeable assistance millennial shoppers expect.
With increases in minimum wages across many state and local jurisdictions, the changes to overtime rules associated with the new Fair Labor Standards Act (FLSA) procedures going into effect this summer, and a number of workers’ rights and predictive scheduling legislative initiatives recently enacted or pending, retailers face significant potential labor cost increases. Added to the extra labor required for omni-channel fulfillment and the increased scheduling flexibility needed to retain today’s workforce, these regulatory changes will not only raise costs, they will also increase the complexity of managing the store workforce, as well as make the cost of non-compliance greater. Relying on store managers to address all of these issues and regulations with paper and pencil or spreadsheets is a recipe for disaster. Technology is the answer.
JDA and Workday
Recognizing the daunting new challenges retailers face in managing their store workforces in today’s environment, JDA Software and Workday together promote a comprehensive approach to workforce management. The combination of Workday’s human capital management (HCM) application for acquiring, training and managing talent coupled with JDA’s solutions for workforce forecasting, scheduling and task management simplifies the workforce management process while ensuring the right associates with the right skills are always available to serve today’s demanding consumers without breaking the bank. Furthermore, the combination of Workday and JDA provides joint customers with a strong foundation for growth by helping retailers attract and retain top frontline talent.
To learn more about how JDA and Workday’s solutions can benefit your business, visit the Knowledge Center to read our white paper on workforce challenges, as well as other research and insights for retailers.