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Overcoming the Challenges of the Labor Shortage: The Right Technology Helps Retailers Get Ahead

photo of three retail grocery employees

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Even before COVID-19, businesses in grocery and retail struggled to attract and retain reliable, affordable labor. Now, as businesses attempt to return to pre-pandemic customer levels, they’re finding that conditions have worsened. Many workers have left the industry altogether, and the talent pool has become smaller and more competitive than ever. Your managers may find that they’re struggling to do more with less than ever before. Luckily, technology helps retailers deal with problems just like these.

On top of the labor shortage, many grocers have adopted (or are considering adopting) a hybrid grocery-restaurant model, in which a section of the store is dedicated to an in-house restaurant, sandwich shop, or other type of eatery. This “grocerant” model can introduce additional challenges to the unprepared retailer, but when implemented well – and with appropriate technology – can be a necessary differentiator in a highly competitive industry where good labor is hard to find.

Below, we outline 3 major ways the labor shortage affects businesses. Then, we describe 4 things retailers can do to overcome the challenges, differentiate themselves, and get ahead.

How the Labor Shortage Affects Retail Businesses

COVID-19 forced many businesses to let go of workers, and many of those workers have since moved on to jobs in other industries – or have opted not to work at all. Because of that, businesses are now having to operate short-staffed or with less than optimal labor. Here are some of the main ways this affects day-to-day business:

Negative impact to guest service, including longer lines and wait times.

Fewer staff members on-hand may mean longer wait times and poorer service for customers. If you anticipate being short-staffed, it’s best to be up front with your customers. Ask them to be patient with you as you work to deal with the problem.

Fewer sales and smaller profit margins.

Because your limited staff may not be able to keep up with normal demand, be prepared to serve fewer customers and make less in overall sales.

More time spent recruiting and training.

You’re probably already spending more time trying to fill vacant positions and cross-train your people for multiple roles. Many of your new hires will likely be completely new to the industry, so you should also expect to spend more time training them in the basics.

These are some of the difficulties you are likely experiencing if you’ve been hit by the labor shortage, but they’re not insurmountable. Below, let’s look at some things you can do to overcome the challenges and make the most of your labor dollars.

How to Overcome the Challenges of the Labor Shortage

Now that we’ve covered the problem and its symptoms, let’s dive into some solutions:

1. Do everything you can to retain and engage your current workforce.

Do all you can to retain your current staff. It’s simply much easier and more cost-effective to retain your current employees than to hire and train new staff members, especially when there’s heavy competition for new hires.

Employee engagement is vital for retaining staff, so check in with your people frequently and make sure they feel heard. Use a scheduling and timekeeping software, like TimeForge, that your employees will find easy to use and will help them stay engaged. TimeForge provides all the modern features that employees these days expect, from checking their timecards and schedules to requesting time off to touching base with their boss.

chart showing average shift length in minutes by day of the week
Due to the labor shortage, employees in 2021 are working longer hours to make up for being short-handed.

2. Think outside the box for your next hiring campaign.

After you’ve done everything you can to engage and retain your current staff, use social media to advertise your job openings across a wider audience. You can also use sign-on bonuses and referral programs to attract new hires to your business. This works best if your employee morale is good, and if your business has a positive reputation.

If you treat your people well and make them feel valued, they’ll not only be more likely to stay, but they’ll be more likely to help you get the word out during your next hiring push. If you don’t take care of your people, then your efforts over social media could backfire, and you could just end up wasting valuable time and dollars on sign-on bonuses that go nowhere.

3. Hire for soft skills and cross-train your workers diligently.

When hiring, look for people with a track record for being reliable and a team player, even if they have no industry experience whatsoever. Soft skills and a good attitude are far more important than whether someone’s ever worked a cash register or stocked a shelf. It’s a lot easier to train employees on the latter than the former. On the other hand, an employee with a poor attitude could bring down the whole team’s morale and worsen the reputation of your business.

Since many new hires have likely never worked in the industry before, it’s important to have a solid training program in place to get them up to speed. Be prepared for a higher volume of new or untrained staff, and get your tribal knowledge down into a format that’s easy to consume.

Experienced retailers know how to cross-train their workforce, but it can be a challenge to keep up with the certifications required for different roles. With TimeForge, retailers have a certification tracking system built right into their labor management platform, so they always know exactly what certifications each employee has and when it expires. TimeForge can even enforce certifications by preventing employees from clocking in or being scheduled for shifts they’re no longer certified to work! This is just one way technology helps retailers stay ahead of compliance issues.

4. Utilize your current workforce well, and make sure everyone gets enough time to rest and recharge.

Because of the labor shortage, everyone on the team is going to have to work even harder than usual. You should not only make efforts to retain your current staff, but you should also make sure your staff are scheduled efficiently and according to anticipated demand. By scheduling more efficiently, you can more easily ensure that employees receive adequate periods of rest, so that they don’t get burnt out by a hectic work environment.

chart showing average shift length in minutes by month
Although average shift length is starting to stabilize, it's still high in 2021. Employees are working longer shifts, which means they're at greater risk for burnout and turnover.

Technology Helps Retailers

Technology can help. Smart scheduling software with integrated sales forecasting can accurately predict your labor needs and generate your staff schedules in advance. This will help you cover your labor needs much more efficiently. (And may even be required if you operate in a high-compliance area with fair workweek or secure scheduling laws.) A good software can also build in rest breaks and periods of time off, both of which will help keep your staff from burning out.

If your business operates on a hybrid model, opt for an order entry software that will reduce the amount of training your new staff requires and limit the need for additional staff. A good order entry system – we recommend CBS NorthStar – will list out all the ingredients for a menu item at the time of order, both on the staff-facing side and customer-facing or tableside kiosks. This significantly impacts upsells.

Transactions are More Profitable with Beverages

On top of that, CBS NorthStar automatically upsells and offers suggestive selling prompts for drinks and paired menu items to help make restaurants inside grocery stores more profitable.

Employee Retention is Key to Overcoming the Labor Shortage

Remember: whether they’re cashiers, baggers, or deli counter staff, if your employees don’t feel valued and appreciated, they’ll go somewhere they do, and your competitors would probably be glad to have them. Employee engagement is one of the cheapest and easiest ways to retain your staff and reduce turnover. For that reason, it’s a good place to start making long-term changes that will help your business not only survive but thrive.

Technology helps retailers stay ahead, but it’s important to choose the right tech.

UPDATE: We’ve compiled some lessons learned into a post on labor shortage advice for 2022. You might also find our Grocery Labor Shortage eBook useful.

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