Right Person, Right Place, Right Time: Managing unplanned absence
No-shows, call-outs, and last-minute schedule changes aren’t just frustrating—unplanned absence is corrosive to the day-to-day operations at retail stores across the globe.
According to a recent survey by The Workforce Institute at Kronos Incorporated, retail managers across six global regions revealed that last-minute absenteeism leaves their stores understaffed a quarter of the time, while more than half of retailers surveyed (52%) cited unplanned absence as one of their organization’s most difficult, complex, and time-consuming issues.
The pervasive issue of unplanned absence
Regardless of country, employee head count, or sector—from grocery to warehouse, convenience, or department stores—the challenges posed by unplanned absence are universally felt and can directly impact a store’s bottom line: Retailers surveyed acknowledge that at least one in 10 in-store labor hours budgeted is wasted due to staffing misalignment resulting from absenteeism.
“Imagine if companies were wasting 10 percent of their product, or losing 10% of their revenue. Retailers would immediately put in place a task force to solve the issue,” said Workforce Institute at Kronos board member Mark Wales, a leading retail industry advisor and global expert in next-generation workforce management. “However, with workforce management being a traditionally less-than-sexy topic, this flies under the radar and the consequences of unplanned employee absence, although severe, are far from being resolved at most organizations.”
This isn’t to say that retailers haven’t been working to get ahead of the absence curve. Particularly as the holiday shopping season draws near, it’s not uncommon for managers to proactively overschedule a busy shift in anticipation that associates may call out. Yet this attempt to address the problem can often lead to more issues: Without accurate and actionable data to inform when and where additional staff support will be needed, overscheduling can lead to wasted labor hours—both for managers and their staff, who ultimately feel underutilized and unchallenged.
On the flip side, managers who don’t overschedule run the risk of needing to fill vacant shifts on the fly. This causes unnecessary stress for store managers who find it challenging to deal with associates working additional shifts beyond their scheduled hours—especially if they incur overtime. The impact of filling these shifts on short notice also means that one in four (26%) retailers are working with staff that have the wrong skills or a lack of skills at least half the time. Not to mention, tapping into overtime and increasing individual workloads can swiftly impact morale of current employees—in fact, they’ve been found to be two of the three largest contributors to burnout.
Smart solutions for smarter workforce management
It remains challenging to identify the root causes of unplanned absence, and the study suggests retailers may not be doing all they can to address the issue. Findings reveal that only 55% of retailers worldwide have technology in place to help manage unplanned absence compared to three-quarters of retailers using automated technologies to track time and attendance (76%) and manage planned absence (73%). And although more than half (59%) of retailers worldwide believe scheduling technology has a positive impact on staff productivity, 28% are still using either spreadsheets or pen and paper to manage staff schedules.
Most retailers are embracing at least some workforce technology. But increased adoption, particularly of solutions that specifically manage unplanned absence, would enable more managers to identify and analyze stable schedules that promote strong teams, assign shifts based on associates’ preferred availability, and automate shift-swapping approvals to ensure real-time coverage for vacant shifts.
But there’s good news for retailers hungry for new technologies that can help solve their staffing issues. Not only do these solutions already exist, but they’re getting smarter. Recent innovations have delivered workforce management technology that can meet the expectations of workers who otherwise run their lives on their smartphones.
Retailers can provide their associates with friendly self-service solutions that support their needs for flexibility by empowering them to use those smartphones to request time off, swap a shift, or request a schedule change. Employees who can collaborate with their managers to select shifts that fit their needs are less likely to call out at the last minute. At the same time, those solutions can also capture the attendance patterns and labor insights managers need to effectively schedule their teams and drive sales.
Boosting both employee engagement and the bottom line
Solving the unplanned absence equation can significantly reduce operating costs. According to the U.S. Department of Labor, labor costs on average represent as much as one-fifth of retailers’ total revenue—but, in the survey, retail managers reported that a new absence and shift-swapping solution has the potential to reduce overall labor costs by nearly 3%. In addition, retailers worldwide are optimistic that an effective absence management solution could reduce unapproved absence rates by 18 percent on average.
The key is to empower employees with technology that enables them to manage their work schedules in a way that simultaneously supports their need for flexibility while still delivering the coverage and productivity required by their employers. Accurate and automated absence management technology can allow managers and teams to collaborate more effectively to maximize productivity and deliver an exceptional customer experience.
Now more than ever, retailers have an opportunity to deliver a differentiated customer experience by investing in technology that will enhance their associates experience. Associates who can work the hours they need while still attending to their lives outside of work are going to be more engaged, loyal, and effective at work. And they’re going to be the kind of ambassadors who’ll keep your customers coming back for more.
Joyce Maroney is executive director of The Workforce Institute at Kronos Incorporated, a think tank that helps organizations drive performance by addressing human capital management issues that affect both hourly and salaried employees.
Job cuts due to retail bankruptcies add up in 2018
Job cuts due to retailer bankruptcies are way up this year compared to last, fueled largely by the closing of Toys “R” Us.
So far this year, employers have announced 33,530 job cuts due to bankruptcy, 30,212 of which were announced by retailers, according to a report by global outplacement and executive coaching firm Challenger, Gray & & Christmas. That’s compared to 4,970 bankruptcy-related job cuts last year. The largest announcement this year came from Toys “R” Us, which in March eliminated 30,000 jobs when it filed for bankruptcy and ceased operations.
Challenger has tracked 1,127 store closures due specifically to bankruptcy in 2018. This is in addition to the 4,156 retail store closures due to bankruptcy announced through all of 2017.
“Like many industries this year, retail is responding to changing consumer demands and the implementation of new technologies that are disrupting how, where, and when consumers purchase goods and services,” said Andrew Challenger, VP Challenger, Gray & Christmas. “As a major industry, employing tens of thousands across the country, the potential loss of jobs will be significant. However, the new technologies implemented during this period across the industry could lead to an influx of jobs that require a higher level of skills, meaning those positions may demand higher wages and better benefits.”
In other job-related news, Challenger has tracked 714,000 hiring announcements for the holidays, the highest number since the firm began tracking individual announcements in 2012. Traditional retailers have announced 427,000 of those hiring plans.
NRF: Organized retail crime at all-time high
Despite investing in new technology, tightening return policies and other efforts, organized crime rings continue to plague the retail industry.
The extent of the problem is reflected in the National Retail Federation’s 14th annual ORC study, which found that 92% of companies surveyed had been a victim of organized retail crime (ORC) in the past year and 71% of such incidents were increasing. Losses averaged $777,877 per $1 billion in sales, up 7% from last year’s previous record of $726,351.
Retailers attributed the increase to the easy online sale of stolen goods, gift card fraud, shortage of staff in stores, and demand for certain brand name items or specific products. To make matters worse, a number of states have increased the threshold for a theft to be considered a felony. This means criminals can steal a larger quantity of goods while keeping the crime a misdemeanor and avoiding the risk of higher penalties that come with the commission of a felony.
While online fencing has increased over the years, retailers say 60% of recovered merchandise, on average, is found at physical locations. Some ORC activity happens before merchandise ever reaches stores, with 29% of retailers saying they had been the victim of cargo theft that occurred along their supply chains. The good news is this number continues to decline — it’s down from 40% last year, and 44% the year before.
While at least 34 states have ORC laws, 73% of retailers surveyed support the creation of a federal ORC law, noting that ORC gangs often operate across state lines.
Return fraud also continues to pose a serious threat to the retail industry. Retailers estimated that an average 11% of their annual sales will be returned this year, and that 8% of those returns are likely to be fraudulent.
An estimated 12% of returns will not include a receipt, and 21% of those are expected to be fraudulent. In addition, 38% reported in an increase in online purchases returned to a bricks-and-mortar location, and 29% cited an increase of those returns being fraudulent.
During the holiday season, retailers expect 11% of sales to be returned, on average. This is down from 13% last year, and that 10% of the returns will be fraudulent, down from 11% last year.
“Retailers continue to deal with increasing challenges and complications surrounding organized retail crime,” NRF VP of loss prevention Bob Moraca said.
“These criminals find new ways to expand their networks and manipulate the retail supply chain every day,” he added. “The retail industry is fighting this battle by upgrading technology, improving relationships with local law enforcement and taking steps such as tightening return policies, but it is a never-ending battle.”