February 05, 2019

Top workforce management issues affecting retail and hospitality

The retail and hospitality industries touch nearly every person on the planet. So, the pressure is on for business leaders to manage their workforces well. Read on for findings from a new report that highlight their current WFM challenges, and their opportunities to overcome them.

John Orr

John Orr is SVP of Retail Execution and Strategy at Ceridian. John is a passionate advocate for Dayforce, as the best HCM solution that empowers retailers with real-time visibility for Workforce Management, Task Management, Payroll, Benefits, HR, Talent Management, Document Management and Analytics.

The pressure is on for retail and hospitality business leaders to manage their workforces well. A new report from HR.com and sponsored by Ceridian revealed the key workforce management issues these businesses are dealing with, and how they can potentially address these challenges.

The survey, which targeted North American HR professionals in the retail and hospitality industries at organizations with 1, 000 or more employees, found that these organizations have an opportunity to leverage more information, improved accuracy and speed through better technology, and more efficient processes to better manage their people.

Retention

According to a recent article in Business Daily, the industries with the highest separation rates are:

  • Staffing: 352% (Source: American Staffing Association)
  • Hotels: 60-300% (Source: CHA International)
  • Supermarkets: 100%(Source: Small Business Chronicle)
  • Retail: 59% (Source: Small Business Chronicle)
  • Fast food (or QSR): 100%

The higher the turnover in your organization, the more susceptible you’ll be to increased costs which makes retention an important focus. The most widely cited challenge for the retail and hospitality industries is retaining employees – in fact, 76% of respondents said this was a challenge. This could be due to a number of factors, including the tight labor market and low unemployment rate. The strong labor market is also making recruitment more difficult. This issue was cited as a major challenge by about half of participants.

Interestingly, many respondents don’t have access to real-time turnover data – so they’re not able to immediately investigate areas that may affect retention and recruiting. Only a little more than one-quarter of respondents say their organizations have real-time data about turnover, and just 13% have real-time access to data that shows how turnover is affecting the company overall.

Many would benefit from infusing improved solutions in the areas of: knowing the communication styles and core convictions best fit for retail associates in the recruiting process and the practices themselves, focus on providing learning and development, improved benefits focus, and shaping the overall employee experience to be one of improved communication, fairness, predictability, and overall engagement.

Compliance complexity

Another challenge is organizational readiness for legislative changes and government audits. When citing the top factors that make it most difficult for them to stay in compliance with changing laws and regulations, participants said complexity (58%) and lack of time (50%) were the top two. Participants also said the pace of change is a key issue, with constantly changing regulations making it challenging to comply with rules that impact scheduling, compensation, and other workforce management issues.

The report also found that lack of employee training can play a role in organizations’ struggles to remain compliant, which could be related to the retention and recruiting issues mentioned above.

Just one-fifth of participants said that they are very prepared for a government audit. These organizations are more likely to have comprehensive staff policies and procedures, detailed employee data, and the ability to answer questions about independent contractor statuses and “off-the-clock” policies. Expertise, time, and technology all play a role in how well-equipped organizations feel.

How does using technology impact compliance-related issues? Download the free report

Operational planning and forecasting readiness

Budgeting, planning, and scheduling labor is another challenge putting pressure on retail and hospitality operations. They not only represent major cost and productivity issues, but also are not delivering the accuracy and agility required. Only a fifth of participants said their scheduling practices are highly efficient and cost-effective, while just a quarter said they are well-equipped to handle legislative changes that affect labor scheduling and planning.

Only a handful of organizations – 12%, in fact – strongly agree their company has the capability to properly predict and plan for labor needs. Organizations that are less prepared may lack some of the expertise, time or technology required to do this well. We should note that the hospitality industry is especially susceptible to hard-to-predict external changes.

Related: Scheduling laws continue to trend across North America – here’s what you need to know

Related: How to improve your hourly associates’ work-life balance with better scheduling

Delivery and management of key metrics

Only a quarter of respondents said they have the data they need to report on key performance indicators (KPIs). This indicates that many organizations in the retail or hospitality industries are struggling to do business in an information-scarce environment. They require better dashboards, filters, more just-in-time data, and analytics that allow them to quickly glean how they are performing. Having this information from all the big data noise is critical for better decision making and speed in doing so.

Because of this, unsurprisingly, only 19% of respondents strongly agreed that their stores are properly aligned to their business goals and KPIs.

How technology deployment can help meet these key challenges

The report found that many organizations suffer from lack of information and metrics. In fact, 38% of participants said they’re “behind the curve” when it comes to technology solutions that make employees’ and managers’ jobs easier, while only 17% said they’re ahead.

Businesses without real-time access to data are at a competitive disadvantage. Companies with tech solutions that are “ahead of the curve” are more likely than others to report that they’re better at retaining employees, better prepared for a government audit, and have enough time to stay compliant.

Although some organizations are using workforce management technologies with great success, many are not. The report highlights the opportunity for businesses to review the usefulness of their current legacy solutions, the opportunities in more current and holistic solutions, and consider investing in new tech to ensure all stakeholders have access to the right data when they need to make informed business decisions. After all, retail and hospitality operations have the need for speed.

Organizations with higher-performing tech are less likely to report high absenteeism costs: Download the report to learn more

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