Retail and hospitality companies are up against several challenges, including high employee turnover, overspending on labor, and misalignment of business goals. With actionable insights from workforce data, organizations can address these challenges and effectively strengthen their bottom line.
Recently, Ceridian partnered with HR.com on a report to gain a better understanding of the workforce management challenges faced by the retail and hospitality industries.
A key finding from the survey – which targeted North American retail and hospitality companies with over 1,000 employees – was that large organizations lack the data they need to make smarter decisions when managing their workforce. As a result, some companies in these industries are overspending in certain areas of business and underinvesting in others.
Leading retail and hospitality companies are diving deeper with their workforce management data so they can be better prepared to address challenges related to employee turnover, scheduling, and business forecasting. Here are three ways retail and hospitality companies can leverage workforce information to make the most of their labor spend.
1. Reduce employee turnover
Retention challenges are prevalent in the retail and hospitality industries – in fact, three-quarters of participants in the survey reported “retention of employees” as a major business challenge. Despite efforts to end the “revolving door” of employees, these organizations are struggling to retain people more with each passing year as the job market tightens. With the organizational costs of employee turnover estimated to be between 100% and 300% of the replaced employee’s salary, turnover is a cost these companies need to manage tightly.
Managing employee turnover, however, is very complex. Many factors and workplace conditions come into play when an employee decides to either leave or stay with a company, and as a result, employers find it difficult to understand the impact employee turnover has on their business. Findings from the workforce management survey reveal that organizations lack the data they need to reduce turnover. In fact, less than one-third of participants have real-time access to turnover rates and just 13% have knowledge of how turnover is affecting their organizations.
Once a new employee is hired, organizations need to focus on retaining them and ensuring that they remain engaged and satisfied. This means assessing factors of the employee experience such as fairness of schedule and pay, benefits, promotions, communication, and learning and development, among many others. Having access to real-time turnover rates and pertinent data related to turnover will help organizations understand the changes in policies, processes, and procedures that need to be made to retain high-performing employees.
Download the report to learn more about key workforce management challenges faced by the retail and hospitality Industries.
2. Predict labor fluctuations
Many organizations struggle to stay on target and within budget when it comes to labor costs. In fact, only one-fifth of survey participants reported that their organizations have a highly efficient and cost-effective scheduling process. And while some people believe that this is just the cost of business, this shouldn’t be the case.
When organizations lack insights required to properly plan and prepare for changing schedules, employee work-life balance, and seasonal traffic fluctuations, scheduling employees becomes a guessing game. In fact, only 12% of R&H businesses strongly agree that their company has the capability to properly predict and plan for labor needs. As a result, businesses become dependent on erroneous scheduling practices such as last-minute changes and shift swaps or assigning the wrong person to certain tasks during busy hours.
Accurate, real-time insights into labor fluctuations and other unforeseen events will help organizations avoid excessive spending on overtime and absenteeism.
Companies that can properly predict and plan for labor needs look at both historical and real-time data to create projections. These organizations tend to factor in seasonal events such as holidays, travel season, leisure sector trends, weather events, and anything else that could potentially fluctuate their operations.
According to Gartner Research, retailers can achieve significant benefits by supporting the end-to-end workforce management processes like labor planning. In fact, workforce management solutions that are based on forecasted demand can drive sales. Scheduling the right amount of people at the right times can ensure customers receive the best service by the most knowledgeable associates.
Learn more about how you can avoid workforce scheduling challenges with smarter scheduling.
3. Align and measure KPIs across stores
Many retail and hospitality organizations struggle with the complexity of aligning key performance indicators (KPIs) across disparate store locations. For example, one store might focus on monthly overtime hours as a key performance metric, while the others might zero-in on turnover rates.
In fact, only one-sixth of participants in the workforce management survey stated that their stores are extremely well-aligned with business goals and organizational KPIs, and only one-quarter say their organizations have the data they need to review KPIs.
This indicates that companies are doing business in an information-scarce environment and struggle to make smart decisions across store locations. Without insight into business goals and KPIs, alignment will remain a key challenge for most R&H organizations.
Gain visibility to make informed business decisions
Retail and hospitality organizations are under constant pressure to increase revenue and profits year over year, and with already thin margins, it’s imperative to understand where investment needs to be made and where spending can be reduced.
Leveraging workforce data helps organizations gain a competitive advantage, as they’re able to identify patterns, gaps, and inconsistencies within their organization to better prepare for challenges they face.
Download the full report to gain a better understanding of workforce management issues faced by retail and hospitality industries.
The Ceridian Institute provides forward-looking insights that build awareness and advocacy of the trends and challenges facing the workplace. The Institute is composed of industry leaders from Ceridian’s Industry, Value, and Solution advisories, reflecting the team’s research into the future of work and business intelligence.View Collection