By John Orr, John.Orr@Ceridian.com
Passive-aggressive, unengaged employees just aren’t that into your customers. Worse, they might be taking it out on customers, whose experience sends them to competitors. Contrast that with the upside of having an engaged staff happy at their jobs and going out of their way to treat customers well.
On the store floor, improving the customer experience is often a matter of improving the employee experience through engagement. Your organization’s success or failure largely hinges on your employees’ relationship with your customers. Fortunately, for employers to improve their workforce’s engagement levels on the job, the way forward is straightforward. By tweaking processes and technologies for human capital management (sometimes referred to as HCM) and implementing programs that assist in employees’ work-life balance, retailers can improve profitability and retention.
The evidence and the understanding: Intuitive and long-established
That a good customer experience underpins retail success is intuitive. Business leaders have sensed that for a long time: “The State of Customer Experience, 2010,” a survey by Forrester Research, found that 90% of retail executives think customer experience “is very important or critical,” and four-fifths indicated that their organizations try to use the customer experience as a way of differentiating themselves. More recently, 82% of CEOs across several industries were planning to make some or major changes over the next 12 months to their strategies for customer growth, retention and loyalty, according to the “16th Annual PwC Global CEO Survey,” conducted in fourth quarter 2012.
The evidence and understanding that an engaged workforce contributes to the customer experience are long-standing and intuitive, too: In 2010, a report by Retail Systems Research, titled “Enterprise Workforce Management: Redefining the Boundaries of Customer-Centric Retailing, Benchmark Study,” found an undeniable link between higher workforce productivity and an increase in the time these employees have to satisfy customers; the CEO Survey aforementioned stated, in fact, that improved employee engagement also improves performance by up to 34% and effectively drives 20% growth in year-over-year output.
Savvy customers, savvy employees
How much of a difference your organization can achieve in its employees’ engagement is the open question. A confluence of the online shopping experience, social media networking and more has left consumers savvier. For instance, 69% report that they’re now smarter about shopping, and 63% claim to be more demanding — all according to a 2010 report by EURO RSCG Worldwide titled “The New Consumer in the Era of Mindful Spending.”
Customers can sense when your employees — themselves savvier, too—aren’t into their jobs, and employees today understand when their work experience is clunky or inefficient. The need to invest in improvements in the employee experience is urgent. Again, CEOs across several industries agree — 77% of them were planning to make some or major changes to their talent management strategies over the next 12 months, according to the same PwC survey, conducted during fourth quarter 2012.
It is incumbent upon retailers’ senior leadership to recognize and acknowledge that the experiences of customers and front-line employees go hand in hand. The approaches to bettering your organization’s relationship with the employee and customer, simultaneously, are many. Following are three categories where improvements in your human capital management can help:
Human capital management technology: The majority of technologies for core HR, workforce management and payroll are severely lacking in efficiency — i.e., in their ability to perform as one, cohesive system. Published in August 2011, “Next Generation Retail Store-Level Workforce Management Strategies,” an Aberdeen Group study of retailers, found that those with old workforce management technologies were 76% more likely to rely on manual processes or spreadsheets than those who have implemented a modern solution. Manual processes and spreadsheets leave organizations unable to plan, schedule, monitor or track labor in a modern way. Employees take notice — and they disengage.
Self-serve, mobile accessibility: Employees, especially the millennial generation apt to constitute the majority of front-line retail staff, expect the basics of their employment to be self-serve, accessible via mobile applications. When employees can manage the fundamental aspects of their employment (e.g., tax withholding, benefits, etc.) via handheld devices, the resulting efficiency translates to their having more time to focus on the customer as they enjoy the peace of mind of control over their livelihood. Better yet, modern technology for human capital management technology may also enable employees to make adjustments to their preferred work hours via their mobile devices. According to another recent report by PwC, “PwC's NextGen: A Global Generational Study,” 66% of the Millennial generation would like that option.
Work-life balance: Front-line employees could stand to benefit from better work-life balance, and any employer that provides a structured program for that is bound to score points with its workforce; for example, affording employees time off to tend to family care responsibilities. Providing not only the flexibility and communication, but, also, a formalized employee assistance program can further reinforce engagement. If done properly, that provision of caring is then likely to be extended by the employee to the customer during that magic moment of truth — in the store, where conversion takes place. It simply makes good sense, as many companies have reported a greater than two times return on their investment in employee assistance programs.
Human capital management: The place to start
Most retail organizations’ leaders understand that their relationships with employees have a direct impact on those with their customers. The trick is in taking the right steps to improve those relationships, and in recognizing that straightforward changes can make big, positive differences. Human capital management is the place to start.
John Orr is senior VP, retail strategy & execution at Ceridian HCM, a leader in human capital management delivering trusted results and transformative technology. Offerings include the award winning, cloud-based Dayforce HCM, LifeWorks and International Payroll. He can be reached at John.Orr@Ceridian.com.