Rethinking Retail People Management

“The people are the heartbeat of our business,” said Sylwia Gorska, Head of Retail People Management and Culture at IKEA Austria, in the latest episode of our podcast, Retales. This sentiment echoes throughout the retail industry. 

Retail is a cornerstone of the global economy, employing millions worldwide, according to Statista. In-store staff are vital to this workforce, providing the human connection that sets physical shopping apart from online alternatives.

Despite the rise of online shopping, consumers continue to visit stores. Brick-and-mortar retailers offer unique advantages: instant gratification and social interaction. The in-store experience is tangible and immersive, allowing customers to examine and try products firsthand.

Employees are crucial in creating this experience, delivering personalized service and ensuring a smooth shopping journey. Their responsibilities include welcoming customers, offering assistance, managing inventory, and maintaining store organization.

They also bridge the digital-physical gap, offering personalized interactions that online shopping cannot replicate and handling the complexities of new tasks such as click-and-collect and internet purchases returns. In this context, retail people management is more critical than ever. 

Current Challenges in Retail People Management

Recruiting and retaining employees has become one of the most significant challenges for retail people management professionals in recent years. According to a McKinsey report on worker preferences, a lack of workplace flexibility is the primary reason frontline retail workers consider leaving their jobs. 

Managers, in particular, require even greater flexibility and support to lead effectively and create a positive workplace culture. This is crucial for ensuring non-managerial staff feel engaged and supported.

However, the nature of retail work often makes offering flexibility challenging. Innovative solutions, such as allowing flexible scheduling and taking employees’ availability and preferences into account, are becoming essential for attracting and retaining talent

Furthermore, the retail landscape is rapidly evolving, requiring businesses to adapt to new market dynamics and customer expectations. According to a report by Accenture, the need for a workforce that can quickly adapt to constant change has never been more critical. Retailers are increasingly recognizing the importance of developing an adaptable workforce that is digitally savvy, data-literate, and diverse.

But, many retailers have yet to invest sufficiently in the skills, new work practices, and organizational structures necessary to create a truly adaptive workforce. The future of retail work is being redefined, requiring a systematic evaluation of who will do the work, how it will be done, and where it will take place. This transformation necessitates clearly defined roles and responsibilities across an integrated marketplace, encompassing both digital and physical retail environments.

As new roles emerge, there is a pressing need to reskill and upskill existing talent to equip them with the competencies required in a digitalized retail landscape, as Groska emphasizes at Retales. Additionally, the adoption of digital technologies is essential for streamlining operations and enhancing customer experiences. Retailers must also manage a diverse and dispersed workforce, ensuring tasks are performed accurately and efficiently.

Persistent labor cost pressures further complicate retail people management. An SP Global report highlights that wages have been the most significant upward pressure on service sector costs. While this data is based on 2023 trends, it provides context for the ongoing challenges faced by retailers. Rising wages contribute to higher operational costs, which, combined with high turnover rates, can strain the bottom line. The constant churn of employees leads to increased expenses related to recruitment, training, and onboarding. Moreover, a fluctuating workforce can undermine team cohesion, degrade customer service quality, and impair overall organizational performance.

In this complex and ever-changing environment, retailers must prioritize building a resilient and adaptable workforce. This involves not only attracting and retaining talent but also investing in continuous learning and tools that simplify daily tasks for frontline employees. By doing so, retailers can better navigate the challenges of retail people management and maintain a competitive edge in the market.

Redefining Retail People Management with AI

Retailers must “simplify frontline retail jobs and make them more engaging,” according to McKinsey. As a result, they are increasingly adopting technology and AI to streamline and enhance these roles.

Orquest’s Smart Planning solution exemplifies this approach by using machine learning and advanced analytics to predict customer demand and store operational needs for automated shift scheduling. By analyzing historical data, Orquest enables employees to anticipate and respond to fluctuating demand patterns, which improves their ability to provide exceptional customer service and saves managers up to 90% of the time spent creating schedules.

Orquest’s AI-driven scheduling optimizes retail people management by aligning staffing needs with employee availability, skills, contract conditions, and preferences. This precise matching ensures the right employees are in the right place at the right time, enhancing job satisfaction and creating a positive team dynamic. 

The software also promotes a healthy work-life balance by optimally covering operational needs, preventing overwork and ensuring fair scheduling. Managers benefit from the flexibility to adjust schedules for last-minute changes, minimizing disruptions and maximizing operational efficiency.

By integrating AI-driven analytics with frontline operations, Orquest not only improves operational agility and helps retailers adjust labor costs, but also fosters a culture of empowerment and adaptability in retail people management. This dynamic approach helps retail businesses maintain continuous growth and innovation in service delivery, ultimately leading to a more engaged and satisfied workforce.