Balance Customer Experience with Employee Engagement for Better Workforce Management

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1 WHITE PAPER Balance Customer Experience with Employee Engagement for Better Workforce Management How Retailers Can Deliver Employee Satisfaction Along with Outstanding Customer Service Jon Souzis Kronos Retail Strategic Advisor

2 BREAKING THE WORKFORCE MANAGEMENT MOLD You ve heard it all before. Right person, right place, right time. Right person, right place, right time. This has been the mantra of workforce management in the retail industry for decades. The theory is this: If retailers deliver a skilled associate on the sales floor at the exact time a customer needs assistance, they can maximize sales and increase profitability. As most retailers know, it s never quite that simple. While you may have the right person at the right place at the right time, you may still have an inconsistent or poorly defined customer experience that negatively impacts the sale. Scheduling the right person at the right place at the right time may also cause your workforce to work long hours. And if work is not well-balanced across your employee base, your employee engagement and profitability can suffer. Successful retailers know there is a workforce balance between the customer experience they want to deliver and the employee engagement they strive to foster. The goal is to find a workforce management approach that delivers the best of both worlds. Realize when you are focusing too heavily on one part of the workforce equation to the detriment of the other. IS THERE A CRITICAL IMBALANCE IN YOUR WORKFORCE MANAGEMENT? A retailer s first step in finding the right workforce management balance is awareness. Realize when you are focusing too heavily on one part of the workforce equation to the detriment of the other. For example, if you require your retail associates to work long 10- or 12-hour shifts to ensure coverage to assist customers, your focus is skewed heavily toward the customer experience. This can result in excessive overtime costs, unhappy or intolerant employees, and turnover, which can lead to even higher costs due to onboarding and training. Conversely, a retailer with a focus on high employee engagement may be missing the mark on providing the best customer experience. If employees work only when it suits them or to maximize their pay, retailers may not have the proper coverage needed when the customer is in the store. Both higher wages and a poor customer experience may result. If the customer experience falters significantly due to employee engagement efforts, sales may slip, leading to workforce reductions and even store closures. Retailers must manage their workforce to balance the customer experience and employee engagement they want to deliver. This balance can provide financial optimization, employee satisfaction, and outstanding customer service. The key is a properly defined labor model that takes both employee and customer experiences into account. This model must include the work that needs to be completed, as well as the proper alignment between customer needs and employee work-life balance. 2

3 STAFFING PITFALLS THAT RETAILERS SHOULD AVOID How to get started to find the best labor model that works for you? First, retailers may want to take a quick inventory of their current staffing approaches to see where they stand on the customer experience/employee engagement spectrum. There are many common pitfalls that retailers may recognize. Retailers that focus on the customer experience tend to rely on long shifts and overstaffing to ensure coverage at all times. These approaches can undermine employee engagement and, surprisingly, even cause customer experience to suffer at times. Retailers that focus on the customer experience tend to rely on long shifts and overstaffing to ensure coverage at all times. When retailers focus heavily on customer experience, they often use these staffing techniques: Long shifts to ensure proper coverage. Employees are staffed when the customer is in the store. This can lead to higher costs due to extended hours and overtime. Longer shifts may also result in employees not performing at their highest levels for the entire shift, leading to reduced productivity, bored employees, and poor customer service. Overstaffing to ensure proper coverage. Similarly, overstaffing ensures the best customer experience, but at the expense of the profitability of the store due to higher costs. It can also result in reduced productivity and bored employees as multiple people are available to do the same job without the demand to drive the extra labor. Even coverage throughout the day. Although retailers are seeking proper coverage at all times, associates will be overstaffed during the slow parts of the day and understaffed during peak times. This results in poor customer service during busy periods and a combination of overworked and underworked employees, which is bad for morale. On the other hand, when retailers are more focused on employee engagement, the customer experience may suffer, leading to fewer sales and a potential decline in business. When retailers focus heavily on employee engagement, they often use these staffing techniques: Improper full-time/part-time mix. The use of full-time employees may help increase employee engagement, as people are guaranteed more hours and receive benefits. However, staffing with full-time employees may drive costs higher over time, with a potentially reduced impact on the customer experience. Part-time employees may feel like temporary help and seek other more lucrative or stable opportunities, resulting in high turnover costs related to hiring and training. Scheduling employees when they want to work. While self-scheduling is important, it must be used judiciously to avoid both a poor customer experience and reduced employee engagement. Employees may not be able to do their jobs at the time they want to work; for example, an employee may want to start working at 6 a.m., yet the delivery truck arrives at 4 a.m. or 9 a.m. Also, the customer may not be in the store at the time the employee wants to work. 3

4 HOW TO FIND THE RIGHT WORKFORCE MANAGEMENT BALANCE? Learn how to assess your current situation, identify shortcomings and overused strengths, and develop a workforce roadmap. Once you become aware of significant retail staffing issues, you re ready to address them. The next steps revolve around defining a labor model that can deliver employee satisfaction along with exceptional customer service. This requires a thorough definition of the customer experience and employee engagement you want to deliver. You can start to define your labor model with these approaches: Define the customer experience. What exactly is the customer experience? It represents the sensory perception customers feel as they navigate the shopping environment from the time they arrive in the store until the time they exit. This includes operational, merchandising, marketing, and customer service procedures. Once you define the entire shopping experience, you can execute a labor model that supports it. Define the employee engagement approach. How can you support your employees so they have high on-the-job satisfaction? Employees want to successfully deliver the customer experience in a welcoming sales environment. They also need appropriate scheduling methods and shift lengths, breaks, and job variation to feel engaged and to thrive. From a costing perspective, retailers must also balance full-time and part-time workers to ensure scheduling flexibility while controlling staffing costs. What are the next best steps for your organization to find the right workforce balance? Learn more about working with labor models by reading the Kronos white paper Aligning the Labor Model with the Customer Experience, available at kronos.com/resources/aligning-labor-model-customer-experience. This paper is the first in a three-part series that outlines how to work with documented standards and best practices to define metrics and measure performance to support a consistent customer experience across stores. Also consider independent services to help you evaluate and create labor models that are the right fit for your business. Industry experts in Kronos Advisory Services have years of retail experience and can partner with you to help solve your workforce challenges. These experts can develop detailed labor models that work best for your retail environment. They can assess your current situation, identify shortcomings and overused strengths, and develop both a short-term and long-term roadmap to deliver the customer experience your customers expect and the employee engagement your workforce deserves. 4

5 ABOUT KRONOS Kronos is a leading provider of workforce management and human capital management cloud solutions. Kronos Services is committed to providing smart value fast with a wide range of strategic service offerings all delivered with the industry expertise and domain knowledge of a technology leader. We re dedicated to helping customers achieve a rapid time to value from their workforce solution investment while delivering the experience they expect. Learn more at Kronos: Workforce Innovation That Works. ABOUT THE AUTHOR Jon Souzis, Kronos retail strategic advisor, has been working in retail information technology for 24 years. Jon was the senior manager for workforce management applications for a Fortune 500 retailer and has consulted on labor and workforce management both in the U.S. and abroad for the past nine years. He holds a B.S. in business systems from Taylor University , Kronos Incorporated. Kronos and the Kronos logo are registered trademarks and Workforce Innovation That Works is a trademark of Kronos Incorporated or a related company. For a full list of Kronos trademarks, please visit the trademarks page at All other trademarks, if any, are property of their respective owners. All specifications are subject to change. All rights reserved. SV0268-USv1