03/03/2022

By Putting Employees First, a Culture of Automation Becomes Possible

By Tyler Higgins

Walk through your local mall, there are “Now Hiring” signs on every store front. Read your local paper and you’ll find stories about warehouse workers being tapped out, different ways supply chains are getting disrupted, and any “new normal” yet to be defined. Most will hear an easy solution to this: automate.

The recent second pandemic holiday season made it clear that retail needs to take a more strategic approach to automation. Some automation has been simple — grocers and other mass retailers have put in self-checkout kiosks, and some companies, more advanced in their automation journey, have robots sorting items in their warehouses. But gaps still remain. Most automation projects have focused on specific, small areas and tasks.

There is still a long way to go toward establishing a culture of automation, and along with that, innovation, that actually instills excitement in your people. In fact, the mere mention of automation quite frequently can kill a culture. But owning a business strategy that embraces automation as a means to streamline operations, deliver supply chain efficiencies, and leverage data to personalize your customer offerings, can be a big differentiator while elevating worker satisfaction.

Part of being strategic is looking at the entire retail ecosystem. But for most retailers, automation is still more of a back-end concept than an overall business driver. A company could have the most efficient warehouse in the world, but without a delivery partner who can handle their capacity, ultimately neither the retailer nor the consumer realizes the value from that efficiency. Automation in one aspect of a business may create bottlenecks elsewhere. Therefore, a piecemeal approach to automation does not support margin growth, sales growth, or — most importantly — customer engagement.

To address the total retail ecosystem, particularly when introducing automation, companies must put their people first. While it’s a given that retailers must be consumer centric, they also need to look internally toward those very real people who interact with your customers and your product. Retailers are focused on automation, but the employees are still critical for any brand to deliver a differentiated customer experience and ensure the success of any innovative deployment, at any retailer.

While automation is typically synonymous with labor efficiencies and a reduction of labor force, retailers still need people. And with the workforce being asked to do more than ever, automation has driven the need for retraining programs — focused investment in providing promising career paths to employees — a new organizational design, and a new set of skills.

What must employers do to attract the people they need and, and keep the ones they already have? Most retailers adopting automation face the risk of pushback from employees unwilling to adapt in fear of being replaced by robots. Companies need to provide reassurance and communicate clearly about what they’re offering — an exciting new journey that will require employee engagement — and then follow through with it.

To entice new talent, some employers have offered to cover employees’ tuition, or in other ways help them complete their education. They are offering higher compensation, improved scheduling, retention bonuses, expanded trainings, and more impactful benefits.

Communication is the great enabler here: It allows retailers to support both innovative automation and their people. Organizations need to be very intentional — if they’re going to fund education and new skill sets, then they have to allow people to actually have the time to be successful in their learning process.

Someone may join a company that’s offering tuition assistance or educational programs — but when they arrive, they spend their first six months spinning their wheels, trying to figure out how to do it all. People are being asked to do a lot, and do a lot from day one — fitting in learning with a demanding job needs to be another element of appropriate work-life balance.

For employers, this means scheduling in weekly non-work time for employees’ classes and study. The same goes for social interactions — if an employee is enthusiastic about supporting a certain charity, the employer has to show support by making sure the employee has the time and the wherewithal to engage in volunteer efforts. Employees are embracing action to support culture and their communities; employers need to empower them to embrace their passions.

While this is about as far as you can get from technology and automation, the overriding issue is the culture you’re creating. New incentives and unlocking employees’ passions creates a strong culture, but automation brings with it significant fears.

Retailers need to embrace skillset growth and education to train workers for the newly created jobs that are critical to interacting with automation. This will be a tough sell if communication is poor. Many employees will feel that they’re going to lose their job — if not now, then at some point in the near future — to a robot, or at least to these automated processes.

Even if retailers are fighting the war of talent by funding new benefits such as education, they will lose these people if they do not establish an effective communications strategy. The messaging must build a feather bed of trust and excitement under the employee, assuring them that they are not being replaced, but that they are embarking on a promising new path of discovery and growth — and most of all, that they are essential.

Bottom line, automation doesn’t lead to job loss. In studies over the last 20 years, automation entails the same number of workers, but revenues are outpaced, so employees are actually more productive. It doesn’t necessarily displace workers — but it changes their jobs.

For retailers, the challenge is not only to message the right way, but to make sure they have the right talent and infrastructure to support these big automation decisions they need to make. This ‘right talent’ can take the form of someone who understands how to troubleshoot a simple robot. Or how inventory can be integrated correctly — for example, when the inventory shows up, that someone is making sure a robot in the warehouse is making the right decisions. Or how people in a store can work side by side with a robot to make sure there isn’t redundancy, but that it actually creates a more efficient approach. Or how a human could identify where automation could grow its footprint at a retailer.

Retailers need to ensure that their employees feel engaged in an exciting and evolving journey. Because without them, no amount of automation is going to keep those fast-changing customers happy. The narrative needs to change. While not losing sight of “customer is king,” retailers need to add a new mantra: “invest in your employees.”

—Tyler Higgins is a managing director and retail practice leader at AArete, a global consultancy specializing in data-informed performance improvement. He can be reached at [email protected].