Industry Players Converge To
Improve Associate Engagement
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Industry Players Converge To Improve Associate Engagement 2
Retailers rely on in-store employees
to represent their brands, engage
with consumers and, of course, sell
merchandise. Potentially more than
any industry in the global economy,
retail hinges significantly on workforce
management optimization to acquire,
retain and engage employees.
But the reality is: all organizations are
fighting a daunting engagement problem.
As of 2013, only 30% of the U.S.
workforce is actively engaged in their
jobs, according to the State Of The
American Workplace report from
Gallup. These unenthused employees
can have a significant impact on
bottom-line results.
In fact, the Gallup research indicated
organizations with an average of 9.3
engaged employees for every actively
disengaged employee experienced
147% higher earnings per share
compared to competitors. Conversely,
organizations with an average of 2.6
engaged employees per actively
disengaged employee earned 2% lower
per share than their competition.
While these numbers do not particularly
put the modern workforce in the
most positive light, retailers have the
opportunity to improve management
conditions and amplify employee
engagement. The most impactful
employee engagement drivers —
according to a survey of more than 560
employees from the Harvard Business
Review — include:
• Recognition given for high
performers (72%);
• A clear understanding of how the
job contributes to the company’s
strategy (70%);
• Senior leadership continually
updates and communicates their
strategy (70%); and
• Business goals communicated
company-wide are understood (69%).
Retailers are recognizing these
engagement drivers and, in turn, are
responding by rethinking and
improving their:
• Overall company culture;
• Training methods;
• Internal communication
strategies; and
• Employee salaries and
benefits packages.
As of 2013, only
30% of the U.S.
workforce is
actively engaged
in their jobs.
- Gallup
Industry Players Converge To Improve Associate Engagement 3
Creating A Culture
Of Inclusion
Looking specifically at employee
satisfaction, U.S. retailers perform
below industry averages, according to
The Answers American Employee
Study. Retail employees ranked their
satisfaction level at 63, two points
below the 65 average of all 12 industries
surveyed. Only the restaurant industry
(60) scored lower than retail.
“When we think about the workforce of
retailers, the reality is that employees
deserve better,” said Eric Feinberg, Senior
Director of Product Strategy at Answers.
“Retail employees are looking to their
employers to deliver a better experience.”
Answers defines engagement as “the
degree to which an employee feels an
emotional connection with the retailer,”
according to Feinberg. “The reason
why they don’t feel as emotional of
a connection to the retailer as other
employees do in other industries,
is because they’re less connected
to leadership. The American retail
employee deeply craves company
leadership that supports long term
growth over short-term gain.”
Many retail businesses are structured
so each individual store supervisor
delegates to employees and then reports
back up to corporate headquarters.
Larger merchants with dozens, or even
hundreds, of brick-and-mortar locations
employ store associates that only know
the confines of their own store, and are
generally only familiar with that store’s
management. Thus, associates might
not fully understand the corporate
management structure of the company,
or have any concept of the goals the
organization aims to accomplish.
“The speed of which we are moving
in the business world is probably the
biggest driver of disengagement,”
said Jonathan McClellan, Director of
Employee Recognition at Hallmark
Business Connections. “It’s hard to
pause and make sure that people
are all on board and all pointed in the
right direction. It’s hard enough in an
organization that has a lot of employees
in the same building or at least on
the same campus. But it’s even more
difficult when employees are spread out
over an entire region or country.”
The reason why
associates don’t
feel as emotional
of a connection to
the retailer as other
employees do in
other industries,
is because they’re
less connected
to leadership.
- Eric Feinberg,
Answers
Industry Players Converge To Improve Associate Engagement 4
The traditional retail business structure
has led McClellan to believe that
middle management holds the greatest
opportunity to influence employee
engagement. After all, middle managers
oversee daily activity, attitudes and
behaviors that store employees exhibit.
They easily can converse one-on-one
with associates, identify their strengths
and weaknesses, develop goals and
show recognition via rewards programs.
Feinberg holds a similar view on the
significant impact management teams
have in that they must foster
an environment that enables
employees to stay “plugged in” to
the company’s direction.
“I call this the culture of inclusion,”
Feinberg stated in an interview with Retail
TouchPoints. “Do they feel included in the
overall culture? It was surprising to see
in our data that even people who work
in retail locations hundreds of miles away
from the headquarters want that kind
of connection. Being plugged into the
leadership and the vision helps contribute
to an employee’s understanding that they
do have a part to play in the company’s
overall direction and success.”
Filling The Workforce
Skill Gap
Finding the leadership to build a
thriving culture was the most crucial
concern global businesses had in
2014, according to research from
Deloitte. More than two-thirds (38%)
of organizations rated leadership
as “urgent” and 48% ranked it as
“important,” according to the 2014
Global Human Capital Trends report.
Not far behind, 26% of businesses said
retention and engagement were “urgent,”
while 53% rated them as “important.”
Most (75%) global organizations
across industries agree that workforce
capability — or the internal building of
technical and professional skills — is an
The speed of which
we are moving in
the business world
is probably the
biggest driver
of disengagement.
- Jonathan McClellan,
Hallmark Business
Connections
Industry Players Converge To Improve Associate Engagement 5
“urgent” or “important” issue. However,
only 15% believe they are ready to
address this challenge. The overall
skill and knowledge gap within these
organizations illustrates the lack of
dynamic training provided to employees
not only when they start a new position,
but also as they continue to grow and
learn in their role.
“Many organizations are looking in
the wrong place, believing they can
fill their capability gaps by ‘hiring the
right person’ in their current markets,”
the Deloitte report explained. “Yet this
traditional approach is increasingly a
zero-sum game with as many losers as
winners. Even if companies can identify
the right people, they must then attract
them, compete with others to hire them,
and train them further once they are on
the job. The reported backlog of skills
gaps appears to suggest the old way is
no longer working.”
Do Retailers Have
To Pay To Increase
Engagement?
Employee training, whether five weeks in
or five years down the line, conveys the
message that the employee is valued
as a company asset for the long term.
However, an undeniably important factor
to employees is their ability to make
a living wage, particularly in the retail
industry, where many workers are instore associates who work part-time.
Retailers such as Costco and Trader
Joe’s start their entry-level store
employees with salaries much higher
than the average, and provide a variety
of opportunities for employees to
advance within the business. In fact,
Costco store employees are reported
to make $21/hour on average, with
the store experiencing just a 6% yearly
turnover rate. The Container Store
pays its employees an average of
$50,000 annually, a total that is unheard
of relative to industry standards. In
fact, the Container Store salary nearly
doubles the $23,690 average national
salary of a retail sales employee,
according to 2013 data from the Bureau
of Labor Statistics.
Most (75%) global
organizations
across industries
agree that
workforce
capability — or the
internal building
of technical and
professional skills
— is an “urgent” or
“important” issue.
- Deloitte
Industry Players Converge To Improve Associate Engagement 6
“Store-based retailers must create
incentives for store employees to
engage with both their customers and
complete their non-revenue generating
tasks quickly and efficiently,” wrote
Paula Rosenblum, the Co-Founder and
Managing Partner at RSR Research,
in a contributed article to Forbes. “The
baseline for that employee engagement
is a living wage.”
Walmart, a subject of criticism from
employee rights groups, is trying to
improve brand perception and worker
morale by increasing entry-level wages
to $9/hour in the first half of 2015. The
hike impacts approximately 500,000 fulltime and part-time associates, and will
jump to $10/hour by Feb. 1, 2016.
In addition to addressing employee
wages, Walmart also plans to invest
$1 billion in 2015 on hiring, training and
realigning the store operational structure.
As part of this initiative, the retail giant also
has committed to giving $100 million over
the next five years to increase economic
mobility for entry-level employees. Thus
far, the retailer invested $16 million of
that total in seven national nonprofit
organizations designed to provide
education and skills training to 12,000
retail workers.
TJX, the parent company of discount
retailers TJ Maxx, Marshalls and
Home Goods, followed Walmart’s
lead in increasing minimum wage of
part- and full-time workers to $9/hour in
June 2015. Similar to Walmart’s policy,
in 2016, all TJX employees working for
more than six months will have their
salary raised to $10/hour.
Rosenblum argued that the raises are
not only beneficial to the employees from
an economic standpoint, but also as a
morale booster, as the higher wage total
signifies higher value to the company. A
more productive employee can potentially
garner more customer interactions and
sales. In fact, 77% of high prioritizers —
The Container
Store pays its
employees
an average of
$50,000 annually,
nearly doubling the
$23,690 average
national salary
of a retail sales
employee.
- The Bureau of Labor
Statistics
Industry Players Converge To Improve Associate Engagement 7
companies that see engagement as an
extremely important priority — and 69%
of moderate prioritizers believe employee
engagement has a considerable impact
on customer satisfaction, according to
a report from HBR.
Answers Corporation recently released
findings discussing the relationship
between the two variables, indicating
that employee engagement has a
positive effect on customer satisfaction.
Of the 25 retailers included in the study,
Advance Auto Parts, Ann Taylor,
Apple and Barnes & Noble attained
the highest customer satisfaction rates.
Answers scored satisfaction on a
100-point scale, with 80 generally
considered the threshold for excellence at
which an organization meets and exceeds
employee or customer expectations.
“Retailers need to be as good to their
employees as they are to their customers,”
Feinberg stated. “That’s where some
retailers are going to get hit over the next
couple of years going forward.”
Understanding
Internal Flaws
Despite knowing the correlation between
employee satisfaction, customer
engagement and overall sales, some
retailers may struggle to make the proper
changes to their workforce strategies.
But how can organizations get started?
“It starts by looking within and taking the
time to clearly identify what is the source
of the business opportunity or the
business problem that you’re trying to
solve,” McClellan, of Hallmark Business
Connections, said in an interview
with Retail TouchPoints. “For those
companies that struggle in this space,
it’s very clear they haven’t taken the time
to clearly articulate and define what it is
that they’re trying to accomplish. They
instead look to the external environment
to tell them what other organizations are
doing. The challenge there is that they
don’t know what they’re getting into nor
how to apply these examples in their
organization, because they haven’t tied it
back to their needs.”
77% of high
prioritizers —
companies that
see engagement
as an extremely
important
priority — and
69% of moderate
prioritizers
believe employee
engagement has
a considerable
impact on
customer
satisfaction.
- Harvard Business
Review
Industry Players Converge To Improve Associate Engagement 8
Once these retailers understand their pain
points and have a game plan on what they
want to accomplish, they can then take the
initiative to reach out to solution providers
who can help them in areas such as
schedule management, department-todepartment communication and customer
service management.
Retailers Simplify
Workforce Tasks To
Foster Engagement
Strong employee engagement is
a necessity for retailers looking to
maximize revenue and retain their
workforce. While many retailers
already have taken measures to
boost employee satisfaction, there is
room for improvement. By monitoring
organizational aspects, such as
company culture and training, or
adjusting company wages, retailers can
further optimize workforce management.
Retailers such as Belk, PSK
Supermarkets, Rite Aid, Simms
Fishing and Wireless Vision
have engaged their employees by
implementing numerous solutions that
make the working environment easier on
both in-store and corporate employees
alike. To boost organizational morale
and financially benefit their businesses in
the long term, retailers are implementing
solutions including:
• Schedule management;
• Human resources and
payroll management;
• Quarterly/monthly goal
planning; and
• Advanced analytics and reporting.
Improving Shopper-ToAssociate Interactions
The success of a brick-and-mortar retail
store hinges on employee availability.
Shoppers not only look to purchase
their desired products, but also long for
an experience that makes them want
to keep returning to the store. Even if
retailers properly train store employees,
they may still suffer if the workers are
not in the best position to succeed at
the right time.
With the Reflexis
solution, Belk
reduced its payroll
by $1.7 million and
increased sales by
80 Basis Points,
which translates to
an annual total of
$31 million.
Industry Players Converge To Improve Associate Engagement 9
To align its sales floor coverage with
growing consumer demand, Belk
initiated the Service Excellence Project.
As part of the project, the department
store implemented a suite of Reflexis
solutions in all of its 217 locations,
including the Workforce Manager,
Advanced Analytics and Reporting, Task
Manager and Time and Attendance.
With the solution, the retailer reduced its
payroll by $1.7 million and increased sales
by 80 Basis Points, which translates to an
annual total of $31 million.
“The project started by looking into how
we can improve the back of the house
so we can move more hours to the front
of the house and service the customer
better,” said Eric Bass, SVP of Store
Operations at Belk, during a presentation
at NRF. “For the ‘service excellence’
part of the project, we asked: ‘How do
we develop skills within our associates
so they can drive sales and become the
CEO of their own little business?’ The
final phase of the project indicated that
if we’ve freed up more hours, if we’ve
trained them on how to interact with the
customer, then we’ve got to get them
in front of the customer. We needed
technology to help us understand when
the customer was going to be in our
store and recognize the steps needed to
make sure the right associates were in
the right place at the right time.”
While Belk earns approximately 60%
of its revenue from Friday to Sunday,
the retailer had not properly aligned
associate schedules with peak times
until utilizing the Reflexis solutions,
according to Bass. The solution enabled
store managers to identify scheduling
and sales trends, and make fact-based
scheduling decisions without taking any
employee’s working hours away. In turn,
associates have a greater opportunity
to earn higher commission pay due
to heavy traffic. Associates also have
acquired more thorough knowledge of
their schedules in advance.
“Our managers are spending a lot
less time in the back office writing
schedules,” Bass stated. “We need them
on the sales floor. The most important
space on our floor is that three feet
between the associate, a manager and
a customer. We need them out there
to face and greet those customers to
understand their needs, and Reflexis
allows them to do that.”
Our managers are
spending a lot
less time in the
back office writing
schedules. We
need them on the
sales floor. The
most important
space on our
floor is that three
feet between
the associate, a
manager and
a customer.
- Eric Bass, Belk
Industry Players Converge To Improve Associate Engagement 10
Rite Aid, Wireless Vision
Improve Labor Costs
Through Scheduling
Rite Aid and Wireless Vision are two
other examples of retailers that have
optimized their scheduling through
workforce management solutions from
Workplace Systems.
Rite Aid deployed the Workplace
Schedule and Attendance Management
tool in all 4,700 stores across the U.S. in
March 2012, with the goal of improving
the visibility, efficiency and control of their
pharmacy schedules and data such as
labor costs and open shifts. Additionally,
the company sought to build a better
work-life balance for pharmacists by
using a portal that enabled associates to
view and confirm schedules.
Since implementing the solution, the
pharmacy has improved labor utilization,
reduced schedule administration time
and increased compliance with all
schedule-related processes.
“The enlightened employer is going to
say, ‘Rather than treat these guys badly
and make them grumpy in front of their
customers, why don’t I try to work with
them?’” said David Farquhar, CEO of
Workplace Systems. “‘Why don’t I try to
co-create happiness in this company?
Why don’t we let people become involved
to participate in the creation of work
schedules that suit their needs and their
family’s needs?’ If they do that, then they
will be able to retain the good employees,
who will be motivated and come to the
store with a smile on their face.”
Meanwhile, Wireless Vision boosted
conversion rates from 4% to 11%
after using the Workplace solution for
approximately 18 months. Revenue
per hour in stores jumped from an
average of $50 to an average of $60
as employees gained better insight into
customer demand.
From an employee perspective, company
turnover plummeted from 125% percent
to 40% within the same time period,
and employees’ overall happiness rating
climbed from 65% to 95%.
Wireless Vision
boosted conversion
rates from 4% to
11% after using the
Workplace solution
for approximately
18 months.
Industry Players Converge To Improve Associate Engagement 11
“Workplace helps empower our people
by giving them the answers to the test,”
said Dawn Bernick, Director Operations
at Wireless Vision. “The labor demand
and forecasting that is built right in the
system shows them exactly where to
put their people. There’s no guesswork,
so they feel good about what they’re
doing, and that they’ve met the needs of
the business. They can quickly write a
schedule, make some simple edits and
move on, and go out on our sales floor
and help our customers and other
sales associates.”
Workplace recently developed a mobile
app featuring its “smart scheduling”
capabilities that made its debut at the
NRF Big Show in January. The app
enables employees to access their
current work schedules from anywhere
at any time, so they can manage
upcoming availability, swap shifts and
bid for open shifts.
“Once a person has their schedule, the
app can send them a message showing
what products they will be focusing
on and merchandising within the next
week,” Farquhar said in an interview
with Retail TouchPoints. “For example, if
there is a new line of ladies’ dresses, the
associate will get pictures to share with
friends and family, and they will access
training so they know what products to
focus on when people walk into a store
the next Monday.”
Planning Ahead And
Setting Company Goals
Organized scheduling can make the lives
of retail employees and management
teams alike much simpler, while
helping them increase efficiency and
productivity. Retailers can optimize this
productivity through the implementation
of efficient planning systems that create
clear goals and put individuals in the
best position to succeed.
As a retailer looking to expand its sales
channels, Simms Fishing Products
had challenges in organizational
communication and alignment between
departments. To get these groups on
the same page and identify problem
areas concisely, the retailer implemented
strategic planning and coaching
software from Rhythm Systems.
“We had a team of senior directors
at the time that were starting to
focus our company towards the
Rhythm Systems
helped Simms
Fishing Products
cut down its
organizational
list of 10 critical
quarterly priorities
to a maximum
of five.
Industry Players Converge To Improve Associate Engagement 12
direct-to-consumer business,” said
Diane Bristol, Senior Director of
Employee and Community Engagement
at Simms Fishing Products. “They were
out communicating with our team,
but not with a consistent message. In
an organization of 85 to 100 people,
where part of it is production, part of it
is warehouse and part of it includes the
professional roles, it can be really difficult
to have consistent goals or achieve a
bigger goal, if you’re all working under
your own objective.”
Simms Fishing began its implementation
of the Rhythm Systems solution at
the senior management level before
taking the strategic planning processes
company wide. The Rhythm Systems
team helped the retailer cut down its
organizational list of 10 critical quarterly
priorities to a maximum of five, according
to Bristol. Additionally, the senior
management team started holding
weeklong annual planning sessions, as
well as one- or two-day offsite quarterly
planning meetings.
An example of the solution’s strategic
planning capabilities occurred as the
retailer looked to add new roles. Critical
hires not only became an important
priority for the entire organization, but
also for departments. Rather than have
each department manage the hiring
process, Bristol served as the key point
person to streamline and manage hiring
for the entire business.
“I was working with each of the department
heads in adding the new hires to make
sure we were following the processes and
doing everything correctly to get the right
people here,” Bristol said in an interview
with Retail TouchPoints. “I think we hired
16 people for professional roles and that
doesn’t even account what we were hiring
in our production floor, in our warehouse or
in customer service. That’s a lot of resumes
and a lot of interviewing, and Rhythm
helped ensure that we were able to make
this process efficient and identify where we
were having problems.”
Luxury watch manufacturer Frederique
Constant also is a Rhythm Systems
client, and like Simms Fishing, leverages
the solution to sustain its growth.
Between the first halves of 2013 and
2014 alone, Frederique Constant saw
revenue increase by approximately 26%.
To meet and exceed growth goals,
Frederique Constant molded high
company priorities to key performance
indicators. With a greater knowledge of
goals, employees could operate under
the confidence that they are playing
In an organization
of 85 to 100
people, where
part of it is
production, part of
it is warehouse and
part of it includes
the professional
roles, it can be
really difficult to
have consistent
goals or achieve
a bigger goal,
if you’re all
working under your
own objective.
- Diane Bristol,
Simms Fishing
Industry Players Converge To Improve Associate Engagement 13
a vital role in shifting their company’s
intended direction. The manufacturer
looked to empower its sales team on
merchandising, training and providing
the right incentives to retail clients.
“In the past, we’ve had so many systems
to produce, to market and to repair our
products that it was very difficult to have
a clear picture on what our business
strategy was,” Olivier Zaugg, VP of
Americas at Frederique Constant. “When
we wanted to see something, we were
obliged to access at least four, five or six
different systems.”
Since deploying the Rhythm Systems
solution, the Frederique Constant
management team has held weekly
meetings in its headquarters in Geneva,
Switzerland, with international members
entering the discussion via Skype. With
the platform, the manufacturer has set
up subgroups for sales, marketing,
production and finance, with each
group managed by a leader that can
track department goals. Like the top
management team, each subgroup
holds a weekly meeting to discuss KPIs,
goal progress and execution.
“The Frederique Constant team actually
takes photos and logs that as proof of
being accountable to changing their
merchandising,” said Patrick Thean, CEO
of Rhythm Systems. “Then they also log
the amount of training that they’ve done.
Every person has ‘x’ amount of training
they have to do, so for example, they set
a success criteria where they have to do
at least two training sessions per each
person in the retail store. If they had
more time, they’d do a third one, and
we call that a stretch goal. This rhythm
of checking every single week to know
where they had to push on — and which
locations needed more help in getting
training done — gave them a very
successful year in 2014.”
PSK Supermarkets
Unifies Payroll, HR With
Ceridian Dayforce HCM
While strategic planning can alleviate
headaches for retail management
teams, payroll and human capital
management solutions also play a large
role in simplifying company spending.
PSK Supermarkets, the operator of 11
Foodtown and Freshtown supermarkets
in the Greater New York area, selected
Dayforce HCM from Ceridian to manage
payroll and human resource related
materials in real time.
Every employee
at Frederique
Constant has ‘x’
amount of training
they have to do,
so for example,
they set a success
criteria where
they have to do at
least two training
sessions per each
person in the
retail store.
- Patrick Thean,
Rhythm Systems
Industry Players Converge To Improve Associate Engagement 14
The retail chain initially used a manual,
paper-based solution that had not
allowed them to know how much money
it spent on payroll on an hourly, daily
or even weekly basis. Additionally, the
retailer’s payroll included three different
workers’ unions and non-union stores,
making payment rules very complicated.
Because of the confusion, the PSK
Supermarkets team was unable to find a
vendor that understood the pay policies
until finding the Dayforce solution,
which ensured the company paid every
employee accurately and on time.
“With this system, I can log on as the
president of the company, and I can see
how much money we’ve spent so far this
week on payroll before people even get
their paycheck,” said Noah Katz, CoPresident of PSK Supermarkets. “The
same system that’s keeping track of the
time is the same system that’s paying
the staff. It’s an all-in-one solution. If you
go back to what we had before this, or
go to most other solutions, they don’t
know precisely how much they’ve spent
on payroll until after the work week is
over and the time clock information is
uploaded to the payroll system.”
This management is especially important
given that payroll is PSK Supermarkets’
second-largest expense, according to
Katz. Staff members also can access
the solution to see their schedule for the
week and can request time off. Because
the solution serves as a single repository
that includes document management,
staff members can also complete
tedious human resources tasks faster
with less hassle.
“When we have a new employee
that comes to work for the company,
they fill out all their HR forms and
they sign off on all their policies and
acknowledgements electronically in the
same system,” Katz said in an interview
with Retail TouchPoints. “Let’s say that in
a deli we want all the deli clerks to sign
off on a food safety workbook. So they
do it right inside Dayforce. You can give
the stores three weeks to get everybody
trained on that workbook, and then go
right into the system and see who got it
done and who hasn’t.”
PSK Supermarkets uses Dayforce
to stay compliant with the Affordable
Care Act and eliminate confusion over
individual employee benefit eligibility.
“I’ve always said, the smaller the company,
the bigger the problem,” said John Orr,
SVP of Retail at Ceridian. “One location
or 1,000 locations, you still have the same
operational elements to be profitable and
to engage employees and customers. It’s
a duty and a responsibility to continue to
provide elegant solutions that lower the
cost but increase the returns so there is
a better matching of cash flow. For years
retailers have talked about customer
service. Our duty certainly is to ensure the
right people with the right talent and skills
Let’s say that in a
deli that we want
all the deli clerks to
sign off on a food
safety workbook,
they do it right
inside Dayforce.
You can give the
stores three weeks
to get everybody
trained on that
workbook, and
then go right into
the system and see
who got it done
and who hasn’t yet.
- Noah Katz, PSK
Supermarkets
Industry Players Converge To Improve Associate Engagement 15
are in front of the customer when need,
but it’s also to improve the engagement
with the employee themselves. When they
are engaged, they deliver that provision of
care to the customer.”
Engagement Creates A
Competitive Advantage
In the modern, tech-infused world, there
are plenty of tools and solutions available
to help retailers make employees’ jobs
easier and maximize productivity across
the organization.
Whether through human capital
management, schedule management
or strategic planning, savvy merchants
have taken the necessary steps to
better inform employees in decision
making, align organizationaldepartments
and simplify internal processes. These
actions put the employee at the center,
and ultimately empower them to
accomplish more during the workday.
While some retailers may believe that
a single employee does not make a
difference in the bottom line, retailers
who go out of their way to treat everyone
like they can make that individual
impact are putting themselves at a
competitive advantage.
One location or
1,000 locations,
you still have the
same operational
elements to be
profitable and to
engage employees
and customers.
- John Orr, Ceridian
Industry Players Converge To Improve Associate Engagement 16
Employee Engagement In An Omnichannel World
By John Orr, SVP of Retail, Ceridian
What It Really Means To
Be Revenue Agnostic
When I attended Super Saturday before
the National Retail Federation show a
year ago, the discussion was jokingly
focused more on the term to use (omni,
obnoxious, agnostic, etc.) instead of
the fundamental change in the path to
purchase. Everyone has recognized the
change, but naming it (we settled on
“revenue agnostic”) and understanding
the impact is a bigger challenge.
Omnichannel is like many of the other
terms coined in retail and technology
— somewhat stale and overused.
What does it really mean? And how is
employee engagement impacted by the
omnichannel market force? For years,
retailers were measured on their ability
to drive traffic into the stores through
promotions and advertisements. Once
the traffic was in the store, the focus
was primarily on service and conversion.
Sales per Associate Hour (SPAH),
conversion, wage percentage and other
performance metrics helped retailers
determine the profitability of each store,
region and district. So with omnichannel
in the mix, what other metrics are
important and how can retailers adapt?
Even as retail discussions persist
on the importance of the store and
the acknowledgement that 90% of
all purchases still take place within
the store1, many continue to paint
showrooming as a threat. I always
thought that if prospective buyers are in
your store, that’s ideal. It is still a matter
of converting them, and now we see
more retailers embracing showrooming
as an opportunity to dynamically pull
the shop from anywhere into the store.
In essence, retailers should blur the
physical lines of one of their greatest
assets — the store and the staff within
it — their front-line.
Employee Engagement
In A Revenue
Anywhere Model
Procter and Gamble coined the phrase
the First Moment of Truth (FMOT)
which referred to the older path to
purchase, influenced by print and TV
advertisements and consummated
in-store at display and with a store
associate. Just recently, Google retail
referred to the online path to purchase
shift and influence as the Zero Moment
of Truth (ZMOT). The ZMOT is the time
consumers spend consulting social
media, search engines and friends
before coming to a full or partial buying
decision. While this is true, a key finding
from the A.T. Kearney Omnichannel
Shopping Preferences Study shows
that physical stores continue to be
customers’ preferred shopping channel,
serving as a place where the most
significant consumer and retailer value
is created. If you want to maximize
ADS and conversion, you still need
to have engaged employees that
In essence,
retailers should
blur the physical
lines of one of
their greatest
assets — the store
and the staff
within it — their
front-line.
Industry Players Converge To Improve Associate Engagement 17
are ready to get involved at the Final
Moment of Truth, which is the in-store
consummation of the transaction —
whether through purchase, pickup or
delivery from store.
Unfortunately, many of the employees
being asked to engage with retail
customers at the Final Moment of Truth
aren’t exactly thrilled to be doing so.
According to a Work Trends survey2, the
employee engagement index score for
retail employees registers only 51% —
lower than other major industries. This
is in sharp contrast to Retail Systems
Research (RSR) data, which noted
that more than four out of five retailers
believe that enabling customer service
is more important than ever. What’s
puzzling across retail is that although it
recognizes the importance of employee
engagement, the majority of employees
are disengaged. With most conversions
still taking place in the store (or pickup
in-store from online purchase), who’s
ensuring that customer service quality
levels are improving? Are retailers
missing an opportunity to differentiate
through customer service levels by
allowing employee engagement to
wane? And, are store associates being
measured and rewarded properly?
How Managerial
Accounting Affects
Employee Engagement
Over the years, I have hosted many
table-top sessions across numerous
retail venues and found that one of the
biggest obstacles to being revenue
agnostic is changing the company
accounting practices. Much research
has gone into managerial accounting
practices and the relationships among
an organization’s environment, structure
and information system. We now know
that just like employee engagement,
which accounting can impact, it
appears that information systems and
organizational structures are both
functions of the environment and culture.
However, in many retail operations, it
does not appear that the organization’s
information system and structure are
significantly related to each other.
This is a double-edged sword, since
the managerial accounting system
must change to support this “revenue
anywhere” source model and to
impact revenue agnostic behavior.
Many retail organizations still have not
re-assessed how they account for,
compensate (through incentive plans
and bonuses) and measure productivity
in the store, regardless of where the
demand (sales) originated.
Changing Work In The
Store And How We
Report On It
In terms of impact on the store and
workforce management practices, it is
paramount to get the in-store coverage
and service right. Retailers with full
employee engagement, fairness and
predictability of work, and the supporting
culture and systems have proven to
create higher engagement, year-overyear productivity gains, and of course,
improved profitability.
If you want to
maximize ADS
and conversion,
you still need to
have engaged
employees that
are ready to
get involved at
the Final Moment
of Truth.
Industry Players Converge To Improve Associate Engagement 18
One basic tenet of determining good
coverage is to consider all elements
of work to be done, including both
customer demand-driven and corporate
non-service related work (i.e. visual
displays, inventory). While orders may
originate elsewhere, the store has a
service quality role in the provisioning
of the products or services, and the
accounting has to shift to track all
traffic and service level expectations.
Someone could shop online and
purchase outside the store, but then
leverage the store for pack-and-ship
or pickup. This forces a change in the
“type” of labor activities a store has to
cover today. We are not seeing store
level labor decreasing, but we are
observing a shift in hours to service the
out-of-store revenue channels.
Reflect Omnichannel
To Impact
Employee Engagement
Operationally, the stores today require
tracking and driving work that is no
longer triggered within the store itself,
but from many other channels outside
the store. The incentives need to align
with credit given to value add at any
point in the path to purchase lifecycle.
Not only do the drivers and activities
within the store need to support revenue
anywhere work and coverage, they
need to thoroughly revisit and potentially
change company incentive plans and the
accounting structures.
The next step is to rethink the key
performance indicators and whether
they are measuring tendencies of the
past or forging new ground. Ken Silay,
an executive at Chico’s FAS, Inc.,
challenged everyone during Super
Saturday at NRF 2015 to think about
what these new predictive KPIs need
to be and how they need to change
— given our changing environment
specifically in the revenue anywhere
world. Only then will retailers truly
engage, measure and reward employees
for the “Omni” environment and growth
of overall revenue.
1
2
The path to purchase has changed,
and therefore, stores need to change to
reflect the new environment, no matter
the cost or what they leave behind.
While many retailers are using social
media and apps to drive more online
conversion, far too few have restructured
their incentive programs and accounting
for the store participation — the core
engagement elements necessary to
drive new revenue anywhere behavior.
To begin the process of moving to a true
omnichannel behavior and execution,
integration is required and the incentive
plans need to be in place.
A.T. Kearney Omnichannel Shopping Preferences Study of 2,500 U.S. shoppers; July 2014
http://www.academia.edu/3254091/EMPLOYEE_ENGAGEMENT_FROM_A_RETAIL_SECTOR_PERSPECTIVE
While many
retailers are using
social media and
apps to drive
more online
conversion, far
too few have
restructured
their incentive
programs and
accounting for the
store participation.
Industry Players Converge To Improve Associate Engagement 19
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Minneapolis, MN 55425
P: 952.853.8100
Ceridian is a global human capital management software company serving
over 25 million users in more than 50 countries. Our offering includes the
award winning, cloud-based Dayforce HCM, Global Solutions, Small Business
Payroll, LifeWorks Employee Assistance and Wellness programs and
TeamRelate. Ceridian products, solutions and our people work together to help
organizations control costs, save time, engage and optimize their workforce,
minimize risk and grow their businesses. Ceridian Makes Work Life Better. To
learn more, visit www.ceridian.com.