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04/07/2016

Survey: Retailers unprepared for coming labor storm

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Half of retailers are unprepared for future labor challenges.



That’s according to a new survey of more than 250 U.S. store managers by JDA Software Group, which finds that a perfect “labor” storm is brewing for retailers — one fueled by ever-expanding customer needs, increasing complexity and new and shifting labor regulations.



The Voice of the Store Associate Survey found that 52% of respondents have not yet deployed a modern workforce management (WFM) solution into their planning process and continue to rely primarily on outdated forms of scheduling, like pen and paper, a whiteboard and or an Excel spreadsheet. These type of solutions are likely to be one of the reasons over 50% of respondents feel only somewhat prepared to staff appropriately to meet customer demands, according to JDA.



“The research raises serious questions as to how much attention retailers give to managing their staff efficiently, predicting customer demand needs and complying with new or pending labor regulations,” said Tyler Owen, senior director, global solutions strategy, store operations, JDA Software.



Challenges

Retail store managers are challenged labor-wise by the increased demands that come with such omnichannel fulfillment services as Buy Online Return In Store and Buy Online Pick up In Store. These type of services are only going to increase in future months according to respondents, with additional staff needed to be trained and allocated to support growing customer demand.



The lack of automated systems to predict staffing needs is resulting in increased labor costs. Of respondents whose service is regularly impacted by understaffing, 47% report having to pay overtime for additional employee hours worked between five and 15 times per quarter, or as many as 60 occasions per year. And 75% say they are overstaffed between on and five times per quarter.



Also, a little over half of respondents still claim to practice some form of the controversial on-call scheduling practice. Among respondents who practice on-call scheduling, only 20% are using automated software, with 80 % claiming store management handles it directly.



In addition, state and federal agencies are proposing and passing new labor laws that will have a direct effect on how retailers manage and pay employees. These include a proposed update by the Department of Labor to the Fair Labor Standards Act (FLSA) would raise the minimum salary threshold required to qualify for exemption from minimum wage and overtime requirements, affecting a proposed 4.7 million workers.