A new store associate survey found that half of all retailers are unprepared for future labor challenges.
The JDA Voice of the Store Associate survey talked to 250 store managers and more than 50 percent felt inadequately prepared to staff their stores appropriately. Considering that more than 85 percent of purchases are still made in stores, matching labor levels to customer service is critical.
JDA Software Group, which sponsored the survey, found that there are three factors affecting the manager’s inability to get their staffing schedules to align with customers’ shopping habits. They call it the “workforce perfect storm.”
Addressing the needs of omnichannel retailing is the first big problem facing managers. Store associates are being asked to perform services that support omnichannel services, such as buy-online-pick-up-in-store, or buy-online-ship-from-the-store. Sixty-two percent of respondents said their companies offer these services. A pickup desk has to be created and staffed for online shoppers to retrieve their purchases in the store. Order fulfillment means store associates have to pull inventory and then pack and prepare the order. This means they are taking time away from serving in-store customers.
Staffing to fulfill these services is difficult for the managers to predict, especially when half of them admitted they manually schedule their employees. Two out of five said they were understaffed at least five times a quarter, meaning customers have a hard time getting help when they need it. On the other side, 75 percent said they are overstaffed one to five times a quarter. That means the labor costs are too high for the revenue coming in.
This is especially significant in light of increasing wage costs, which is the second factor facing retailers. Sixty-one percent of those surveyed said increasing minimum wages would have significant or very significant effects on labor expenses.
Many state and local governments are passing legislation that will raise the minimum wage or raise the salaries of those who work overtime. This could have a big impact on retailers’ labor costs. California and New York are both taking steps toward hiking the minimum wage in those states to $15 an hour.
On-call scheduling is also under attack from many of these same legislators. Labor demand forecasting would resolve the scheduling problems, but most of the managers still use spreadsheets or pen and paper to figure out employee schedules.
The third adjustment for retailers is that Millennials are the majority of the workforce. They want more flexibility in their scheduling so that it adapts to a work-life balance. Making the Millennial employees happy, but also making sure the store is properly staffed, is a challenge for today’s retailers.
If retailers admit they aren’t prepared to staff properly to meet these new demands, it will be more difficult to compete for picky consumer dollars.