It’s now the second half of 2019 and you’ll soon be in the thick of hiring and training the extra workers you’ll need to service your customers during the annual holiday rush. But if you’re hoping Santa will be bringing you a stocking full of seasonal associates this winter, you might be in for a surprise...
With the 224,000 jobs added to the US economy last month, the United States is as close to full employment as it has been in nearly 50 years. We are also seeing this trend in Canada and the UK. Canada’s unemployment rate is just 0.1% shy of the record set in 1976, while the UK is at a 40 year low. Even Europe’s unemployment rate has dropped to pre-recession levels. All of this means that it will be difficult to flex labor with seasonal staff this holiday.
How will you meet holiday demand when labor is in such short supply? Here are six steps you can take to make the best of what is sure to be a challenging holiday season.
1. Plan to give more hours to both permanent and seasonal associates. It might sound obvious, but this should already be part of your holiday planning process.
Doing this can be difficult. It requires setting expectations far in advance and using hours to motivate associates without overburdening them or burning them out. Conversations need to be coordinated with store leadership and the corporate labor team to quantify capacity each week of the holiday season. Your workforce management system’s availability module and creative reporting can help maintain limitations and opportunities throughout your stores.
2. Expect to pay overtime. Some retailers consider overtime a dirty word but paying it can be less expensive than hiring new staff. My friend, staffing expert and Senior Managing Director of Ankura, John Frehse, explains this phenomenon in The Overtime Lie. While John’s focus is manufacturing and distribution, the concepts apply just as easily to retail.
Most important about overtime is that it needs to be planned and productive. During the holidays, overtime should be a planned cost that results from not having enough seasonal staff, not a surprise expense caused by poor management or no-shows.
3. Trim the fat from your labor model. While the holidays can add tasks to your stores, you may be able to eliminate (or postpone) tasks that are non-essential or less important due to the nature of the season. If cutting tasks isn’t feasible, you can deprioritize or reduce the frequency of certain activities. Taking out the trash less often, cleaning less frequently, and reducing administrative tasks can save considerable minutes, if not hours, per store.
4. Plan to work faster. As the pace picks up in November and December, work gets done faster so there’s less idle time. As a result, your labor standards—those time values that determine how many associates are needed to service expected sales/customer volume—go down, allowing workers to get more done each hour. If you use industrial-engineered labor standards, you can dial back personal fatigue and delay (PF&D) values because your associates will have less idle time between customers or tasks. If not, you can carefully apply a productivity factor to speed things up.
5. Look for hidden time hogs in your labor model. As you review your labor model for the holidays, look for volume-driven tasks that produce the right number of hours in the off-season but may inflate hours at peak, holiday volumes. For example, if you staff your fitting rooms based on customer traffic, you may find more associates in the fitting rooms than you have rooms available for customers. You may want to adjust the volume driver for such tasks, tweak the sensitivity of the standard, turn it into a fixed task, or set maximum staffing.
Before I go on to the last point, I want to say that while I think revisiting your labor model is important for the holidays, I do not advocate changing the steps in existing tasks just for this time of the year. Retraining your existing workforce to do something differently for a short period of time is difficult, expensive, and confusing. The most likely outcome of such changes is people doing the work wrong. Instead, the things mentioned above simply reduce the amount of labor in your labor forecast and can be easily communicated to your stores.
6. Be the gatekeeper that your stores need. If things go well, your stores will be busy from November through January, and they’ll struggle to keep up the pace. A deluge of one-off tasks such as unplanned markdowns, sign changes, and last-minute promotions can knock well-running stores off balance. While some changes are inevitable, don’t let them get carried away. Your job – especially during the holidays – should be to help separate the necessities from the nice-to-haves, and keep the stores focused on their most important job: serving your customers.
There is a little doubt that holiday hiring in 2019 will be difficult. Tuning your labor model, giving more hours to existing full-time and part-time associates, and being a strong gatekeeper will help your stores make the most of this tight labor market.