Source: Twitter/@MeijerJobs
Solid jobs numbers mean grocers must concentrate on their workforce even more
Last week’s jobs report contained both good news and bad for retailers. Yes, it was a sign of a stronger-than-expected economy. But closer to home, retailers understand the increased challenges the positive numbers mean for attracting and retaining good help at the stores, warehouses and fulfillment centers.
Employment in the retail trade increased by 49,000 in March, with gains in general merchandise stores (+20,000) and food and beverage stores (+18,000). Health and personal care stores lost 5,000 jobs. Retail trade employment is now 278,000 above its level in February 2020.
Not coincidentally, workforce management was front and center at the FMI’s Midwinter Conference in Orlando last week. Randy Edeker, president, CEO and chairman of Hy-Vee and FMI Chairman, told the group of retail, wholesale and supplier executives that the industry needs to concentrate on reconstructing the supply chain to make it more responsive to consumer needs, but pointed to the workforce as the biggest industry challenge.
“As our whole nation undergoes the dramatic workforce reform, we have to work to do, the work of defining who we will be as an industry and helping recognize the vocational possibilities awaiting people in the food industry,” he said.
Rick Keyes, president and CEO of Meijer, told the audience during a panel discussion on the issue that pay is now table stakes and that it is critical for retailers to provide associates with a benefits package, a comprehensive program that promotes retention.
“Every year we want to layer in additional benefits to make Meijer a better place to work this year than it was last year,” he said.
Mr. Keyes added that Meijer has long had a strong corporate ESG commitment but is just starting to use that messaging to attract and retain good talent to the company. The pandemic has strengthened that position for many entering the workforce or looking to switch jobs as supermarket and other retail employees were labeled for the first time as front-line workers.
Discussion Questions
DISCUSSION QUESTIONS: Would grocery retailers benefit from doing a bottom to top analysis of wages and benefits? What will it take for grocers to attract and retain long-term team members on the frontline and throughout the organization?
Poll
Loading …BrainTrust
Jeff Weidauer
President, SSR Retail LLC
Ryan Mathews
Founder, CEO, Black Monk Consulting
Any company would benefit from doing a bottom to top analysis of wages and benefits. We are in a different era, as far as employment is concerned. It is now an employee’s market. Employees are in the driver’s seat as retailers scramble to properly staff and maintain their employees. Take a look at companies like Target, that has experienced low turnover in spite of the “Great Resignation.” What are they doing right? (Just search the archives of RetailWire in the past year and you’ll find more than one article with some excellent comments from the BrainTrust that will give you some answers.) Employees want to be fulfilled, acknowledged, recognized for their good work, and compensated properly. That’s a good start!
In addition to full benefits and highly competitive wages for grocery workers, the treatment of this workforce must greatly improve. This is a workforce that has been extremely unprotected and undervalued throughout the pandemic, and yet, they’re the most needed. Workers need to feel safe and valued or they can clearly apply elsewhere.
Sadly most retailers see their workforce as an expense, when in fact they should be seen as an asset.
Yes, grocers that examine their competitiveness can gain an edge in the costly war for talent.
All eyes are on grocery right now. Among NRF’s top 10 global retailers, 9 sell food. Grocery fuels growth as a high-frequency category, yet margins remain slim as omnichannel costs rise. Retaining great people can help grocers protect their profitability.
Pay and benefits are a great start for retention. However pandemic burnout has driven more employees to demand safety, dignity and respect. Retailers that address workers’ need for security will win their loyalty.
Many retailers have already done a bottom to top analysis of wages and benefits and made changes to attract more potential job candidates, however they are not drawing back hardly any of those associates who were part of the great resignation. We have not yet reached the tipping point of what retailers can offer to potential candidates, but I feel were are not that far from it. I believe this will remain a challenge (attracting good candidates) for a very long time to come.
Working in a supermarket was once a viable middle-class career; today stores compete with QSRs for labor. It’s past time for an in-depth analysis of what will help to attract and retain workers and help to drive growth.
The grocery industry, in particular, would benefit from doing a bottom-to-top deep dive and analysis of its wage and benefits structure. Considering the overall health of the job market and all the competitive wages and benefits packages being offered by companies across the retail spectrum, it’s high time for the grocery industry to rise to the challenge.
Grocers should recognize that their frontline associates are crucial for day-to-day operations. They are also potentially the future of the leadership team across so many vital functions. Society and our local news networks may have viewed grocery associates as “essential workers throughout the pandemic.” However the wage and benefits packages have been far from commensurate.
A motivated, incentivized, well-compensated, and empowered grocery store associate is a valuable commodity who could make a measurable difference in driving a good customer experience.
Most grocery retailers have probably taken a close look at their employee wages and benefits from top to bottom. Savvy retailers are continuing to add more benefits and perks to attract and retain workers beyond increased pay and medical benefits, such as tuition reimbursement, free membership to grocery delivery programs, flexible work schedules and much more. Understanding what your employees want and need is key to labor retention.
Great job numbers and the Great Resignation all at the same time. Why? Many workers have reevaluated their priorities and are now making changes of their own choice. Where to work and for whom, where to live, whether to return, how to accommodate the needs of children and elderly parents, etc. Or to finally develop that big idea or author that novel they have been sitting with for years.
The pandemic gave many workers a chance to rethink their working situation and realize it was not ideal and there were other opportunities out there. They are aspiring to grow in the ways most important to them. They are aspiring to proactively make the life they want. It isn’t just money, but certainly money is a factor.
The average wage increases so far in 2022 is over 7 percent across all industries. Some segments are over 12 percent. Retail, just over 4 percent.
The biggest obstacle the retailer must deal with is the steep pyramid they face. How many entry people really have the opportunity to move up in the organization?
As stated in this article, labor has become center stage for retailers. Retailers need to appreciate the store staff, value them in terms of compensation and benefits but also must make sure that they are utilizing them to the maximum. That requires good staff scheduling solutions that enable greater flexibility but also take account of the activities in the store to ensure that you have the right staff on the right jobs at all times.
Historically, staff scheduling might take into account sales, with more advanced solutions even considering the number of customers through the door. But retail today it is coordinating with the supply chain that is absolutely critical. One of the largest costs for a grocery retailer is getting stock from delivery at the back of the shop onto the shop floor shelving. Eliminating double handling, having the staff scheduled in line with deliveries and the stock on those deliveries being aligned to sales and space on the shelves can change the game in terms of efficiency and profitability.
The days of hiring part-time only to avoid benefits and holiday pay are over. We need to make retail an attractive career choice and rethink the profit improvement mantra—move to a customer convenience and associate satisfaction
one. Take Publix, for example. They are now employee-owned, pay a decent wage, and own their markets. Equity changes the mindset of associates to owners. A living wage and equity equals success.
Even if job numbers are “solid,” by the way, that’s never forever. This is about every retail job — especially entry-level ones — becoming the start of a retail career.
It’s also interesting that Meijer is including ESG (environmental, social, and governance) in the conversation. Commitment to ESG gets the attention of Millennials and Gen Z and shows potential and current employees that the
retailer considers them to be more than temporary hires.
You know, Ron Margulis and I have been discussing this industry together for roughly seven lifetimes or so and for each year of those lifetimes the same questions keep popping up which suggests to me they either aren’t being addressed or aren’t being solved or both. Much as I have enjoyed our ongoing dialogue over the decades I have to ask why we keep asking this question over, and over, and over again. The answer is pretty simple if anyone would stop to think about it. The grocery industry isn’t an attractive career path because it still looks at employees in terms of labor costs that need to be optimized, doesn’t have clearly defined professional development paths for new hires and existing staff, is reactive to change rather than creating and is therefore unable to attract the kinds of technologically sophisticated employees and visionary thinkers required to be competitive and, finally, it is perhaps one of the worst jobs of any industry when it comes to self-promotion and recruitment. This was all true five years ago, 10 years ago, 20 years ago, and 40 years ago and – if things don’t change – it will be true five years from now, 10 years from now, etc. You can’t see change unless you are willing to make it. You want full-time, loyal employees? Give them a path and a reason. If you don’t, quit whining about it.
As important as the “workforce” is to the future of retailing and especially brick-and-mortar retailing, it is only a piece of the puzzle. The retail workforce, for as long as I can recall, was a repository for part-time and first time workers. In most cases, retail workers required no appreciable skill sets as long as they were trainable. While many of us made a nice living as full-time retail associates, We knew full well the life blood of our profitability was keeping labor costs under control. We also knew the fastest way to do that was to keep your workforce predominantly part-time and with few if any benefits. Now, given a variety of external marketplace pressures upon the labor market, finding this “labor cost nirvana” has become a veritable nightmare. Doing all the right things to hire and retain good people are certainly more imperative than ever, but the resulting higher wages and better benefits also hastens the need to hike prices to maintain margins and finding new ways to automate and make more efficient the retail experience. Ironically, this normally translates into fewer employees in the store, which manifests as more self-service and more burden on the shopper during their visit to the store. Over time this situation will find a place of equilibrium but, for the short run, the necessary investments that retailers need to make will inherently not be shopper-centric. In fact, they will likely further drive prices up and reduce the number of in-store employees to offer their assistance.
I just finished doing a program titled “Being a Magnetic Manager.” The manager said no employee want to leave. To sum up why the title says it all, research shows that the number one reason most front-line employees leave is because of the way they are managed. If retailers want to tackle the problem, they can start by making sure they have managers that have been trained to manage at all levels in the organization and give them the tools to do their job.
While I think many companies have looked at pay and benefits, the question is, how many have looked at all of the other elements, and even listened to their employees about what’s on their minds? Retention is going to be a challenge going forward, especially with many other options available in this market.
Undoubtedly grocery retailers will benefit from doing a complete analysis of wages and perks. I feel there’s a clear demand for more workers and it can be balanced only through revising perks and wages. Speaking of retaining team members on the frontline, I don’t think designing long-term strategies would help much. Retailers instead should focus on identifying talents and helping employees improve their efficiency to draw maximum productivity.