When Labor Is a Strategic Asset, Retailers' Employee Turnover Declines, Survey Finds

1/15/2014
"The State of the Workforce in Retail: Taking a Global View," a joint survey by Kronos Incorporated and Aberdeen Group, reveals that when compared to other countries, the U.S. leads in understanding that the workforce is more than just an expense and instead serves as a competitive advantage.

The survey also shows that retailers that focus on their workforce as a competitive advantage lead in key outcomes such as lower turnover, absenteeism and overtime. More than 220 retail organizations participated in the survey, which focused on managers, directors and senior executives across four regions: U.S., Western Europe, China and Mexico/Brazil.

When asked how they view their workforce, 45 percent of U.S. respondents describe the workforce as a competitive advantage followed by Mexico/Brazil, Western Europe, and China at 30, 25, and 10 percent respectively.

Though moving at a slower pace than the U.S., the survey shows that retailers in every region have stopped categorizing the workforce as merely a cost and are evolving their view of how the workforce can contribute to the overall business success. And retailers that view their workforce as a competitive advantage have lower turnover, absenteeism, and overtime expense by 19, 25, and 42 percent respectively.

The survey also finds that organizational goals clearly shape how retailers view their workforce. In the U.S., retailers rate improving the customer experience and loyalty as the top two business goals, at 68 and 40 percent respectively, and they also view their workforce mostly as a competitive advantage.

Whereas retailers in China and Mexico/Brazil are most focused on labor productivity, rating it as their number one business goal at 54 and 55 percent respectively and are more likely to view their workforce as a flexible asset or a resource.

When it comes to building a brand, U.S. retailers rely on the customer experience more than any other region, with 65 percent stating it is the top factor influencing brand value. In other regions, product quality is as the highest factor influencing brand value, with 56, 62, and 63 percent of respondents from Western Europe, China, and Mexico/Brazil respectively rating it as most important for influencing brand value.

According to the survey, retailers around the world are starting to better understand the role of workforce management technology in mitigating more than just compliance risk. All regions recognize that these tools can put the right person in the right place at the right time to help meet consumer demand, drive sales, and improve overall operational excellence.

And majority of U.S. respondents – at 53 percent – identify supporting customer satisfaction as a top goal for workforce management solutions.
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