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Six ways retailers can handle labour shortages

 By Andrew Gorecki, co-founder and managing director at Retail Directions

The retail industry is challenged by labour shortages across the board, from delivery drivers to warehouse staff, store staff to IT specialists. And it’s a challenge faced everywhere from the UK to the US and Australia.

The shortages can be traced back to a whole plethora of reasons – from regulatory changes to the impact of Covid, to changing mindsets of where and how people want to work, to restrictions prohibiting the international movement of workers. 

Impacted further by supply chain challenges, retailers are experiencing a ‘perfect storm’ of demand. But it’s not the cause that’s important – one could write a whole separate blog on that – it’s about how retailers look to handle the problem. They must find ways to improve staff efficiencies to overcome labour shortages and make better use of systems to counter growing logistical and merchandise issues. 

Retailers have been attempting to take action to counter labour shortages, from reducing entry requirements to bolstering wages and improving training – hoping to attract more people to fill the gaps. But this may lead to more expensive, lower skilled staff and it may not be enough. Retailers also need to work smarter, and here are 6 strategies to consider. 

1) Revisit resource allocation

Lack of results can be spotted easily but identifying ‘labour sinks’ can be difficult. Hence, retailers need to launch a concerted exercise to reappraise their businesses to ensure efficiency of existing human resources, as labour shortage challenges won’t be disappearing anytime soon.

Where once driving efficiency was predominantly about improving the bottom line, the current climate necessitates a shift in focus to making business processes less reliant on people and maximising the productivity of staff in general. It’s crucial that retailers figure out how they can satisfy consumer demand and expectations with the reduced resources they have. As mentioned, it needs to be about smarter retailing – using a popular catch phrase – about doing more with less. 

2) Harnessing the benefits of connected retailing 

Retailers need to be harnessing the benefits of connected retailing, so they can handle the shift in customer buying behaviour with less stress on the available resources. A great example of this is the introduction of customer order fulfilment by shipping orders directly from stores. This delivery method is being adopted by a growing number of retailers thanks to the many benefits it offers, such as increasing the available stock pool to satisfy demand. The use of stores as micro-distribution hubs allows retailers to get closer to their customers than ever, enabling rapid order fulfilment and delivery when required. 

Shipping of customer orders from stores not only means reducing pressure on traditional warehouses where resources may be stretched at times, but also making better use of store team members’ time during quieter periods due to the demand shifting to online. Getting store staff more involved in ecommerce operations can also help to break down the internal silos between physical and digital parts of the business that, despite retailers’ best efforts, often remain.

3) Excelling at the basics in-store 

Now is also the time for retailers to reassess their brand promise, whether they are still able to deliver against it, and ensure that the ‘must-haves’ are not overshadowed by the ‘nice-to-haves’. It’s about doing the basics well to ensure that the baseline of a solid, compelling customer experience is there. Meeting and greeting at the door won’t help if shelves are not correctly stocked, click-and-collect orders cannot be handled promptly, and getting customers through the tills takes a long time. 

Retailers can also empower customers to reduce the need for staff through options such as in store self-service technology that allows customers to order or check prices and stock availability themselves.

A perfect example of using technology to increase staff efficiencies can be seen at The Spotlight Retail Group, which recently deployed Retail Directions’ customer-facing self-service price checker tool in their Harris Scarfe stores. Andrea Day, Solutions Manager for End User Services at The Spotlight Retail Group described the tool as a “game changer”, adding that “we’re receiving amazing feedback from store staff and customers alike.”

4) Look for warehouse optimisation opportunities

To counter labour shortages, human resources can be optimised in other areas too, such as addressing dual handling of stock, or process automation of scanning and labelling incoming stock, cross-docking, and break-bulk procedures.

By eliminating duplication of effort through efficient warehouse picking and packing, driven by optimised warehouse management systems, retailers will not only help to maximise staff productivity, but it will also lead to reductions in mis-picks and improved accuracy.  

5) Streamline manual instore tasks

Other technologies can also be used to reduce manual processes instore, such as using RFID systems to perform instore stocktakes. Manual counting of inventory and the reliance on barcodes to capture the counts can be time consuming – specifically when staff levels are low. In addition, infrequency of stock takes due to cost or lack of resources can result in bigger stock inaccuracies, leading to potential customer dissatisfaction.

By using RFID, time spent stocktaking can be reduced from hours to minutes and accuracy of stocktaking increased dramatically.

6) Focus on staff enrichment and retention

It’s also more important than ever for retailers to invest in the people they have now. Skills and satisfaction of a retailer’s existing people need to be analysed across the board, to make sure they are not underutilised or a flight risk, and wherever possible, to tap into employee strengths and fill skills gaps.  

Investing in existing people will not only allow them to widen their remit and take on new roles but may also give them revived interest in retail as a career. That translates into happier staff, who are more engaged in interesting roles and enjoying a better employee experience – which invariably will lead to improved customer experience. 

It’s time to get smarter

No one can tell for sure how long the labour shortage will last. It may be a temporary problem that will last a few months or a more fundamental, structural shift. However, irrespective of future scenarios, for the next 3 to 6 months labour shortages will certainly present a clear risk to a retailer’s brand reputation. 

The world is awash with mantras telling us to better utilise our available resources, but let’s be more specific. By carefully looking at the labour resource challenge through an internal lens – and examining existing resources, strengths, and technologies to drive greater efficiencies – retailers can make permanent improvements, without spending large amounts of money and putting their business at risk. To coin a phrase – the answer often lies within.

 By Andrew Gorecki, co-founder and managing director at Retail Directions

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