Accounting for the “New Normal:” How Accurate Are Your Labor Forecasts?
We have passed the half-year mark, school is starting again, and fall is just around the corner; but COVID is still very present in our daily lives. Everything around us has been significantly impacted by it: the stock market’s high volatility, telemedicine in the healthcare industry, remote learning in the education system, wild animals in cities, multiple carts of toilet paper in supermarkets. These are just a few examples of how the pandemic will forever change expectations and standards. We have to adjust not only to slow down the spread but also to keep customers and sales. Retail is one of the primary industries that has been affected by what we call the new norm. Retail is vital to communities, serving first responders, seniors and families, among many others.
You retailers have had to step up your game to keep your clientele safe and maintain a competitive status. You have had to change how your stores or locations operate and adapt to how people shop, but as you go through the sales and hours, how are you accounting for the extra hours the changes are generating? Do you have a labor model to help you keep track of activities performed in your establishments? If you do, have any of the changes been considered in your labor model?
Three critical steps in response to “new normal” changes must be updated in the labor model
- New operations due to new services or new technology introduction must be added to the labor model.
- Existing processes must be reviewed as some activities may have been eliminated or accounted for in other activities. You want to make sure you are not considering the same action multiple times.
- Changes to operations that already exist in your labor model must be updated to account for new factors such as more extensive areas, higher frequency, or longer time as operations may be more in-depth than before.
It is a fact that many of your everyday activities are changing as your business continues to adapt to new regulations, health guidelines and customer expectations. Usually, new services or technology tend to be either exciting or dreadful. However, these types of changes make a significant impact on labor and customer experience. A great example is implementing a new system that allows your associates to fulfill pick-up orders more efficiently. Start listing out the evident changes to your daily operations.
Here are some things to think about
- Have you introduced new technology to help improve efficiency?
- Are you providing any new services such as deliveries or curbside pick-up?
- Are there any new regulations, guidelines or restrictions that require extra activities directing people?
- Are you offering any extra services to minimize the virus spread?
Similarly, the absence of certain activities can have a significant impact. An important question to ask is whether your labor model currently can consider these types of changes temporarily or at all. As you determine your labor model’s capacity, consider what activities do not apply anymore to your business.
- Have you restricted payment options?
- Have there been any changes to how items or merchandise are bagged?
- Have there been any changes to the products you offer?
- Are returns allowed or processed the same way as before?
Lastly, it is also essential to consider even slight changes to the activities already in place. Many people will assume that those changes will not make a significant difference in your forecast. However, with the help of an updated labor model, these changes can be quantifiable in addition to a more accurate forecast. A great example is the extra sanitation of registers. As you start thinking about what those changes are, go through one department at a time and list out the changes that have happened. For example:
- Have you had to modify your hours of operation?
- What changes have been put in place to reassure customers about sanitation?
- Are there any new regulations, guidelines or restrictions that delay customer processing?
- Have your stocking processes changed?
When updating the labor model, think of all the operations that you may be modifying, introducing or removing. When modifying operations, you must remember that it is not only the steps that may change but also any variable factors that drive your hours and how the work is being distributed. Many retailers may be opening later or closing later, or demand requirements may have shifted, so set staffing adjustments must also be updated.
There are many changes that retailers have had to adapt to the daily routine. Adapting is key to succeed in this business, but as you adopt the new standards, it is also essential to keep your labor model up to date—it will produce a higher-quality forecast, employee engagement and customer satisfaction.