People analytics is emerging as a critical tool as retailers try to make sense of all the factors that can help optimize their workforce. We explain what people analytics means for the retail industry in 2019, three benefits it offers, and how one retailer used it to radically improve operational performance.
For retail, workforce management is a highly complex task, given the multifaceted nature of its teams. Any retail company employs a unique combination of part-time staff, full-time employees, contractual workers, and multiple other stakeholders across distribution channels. It can be difficult to determine which strategies work best and how businesses can ensure positive outcomes in a dynamic environment. This is where people analytics plays a major role. It helps to analyze a range of parameters, encapsulating customer feedback, sales productivity, and other performance metrics into a holistic snapshot. While people analytics covers a broad area, it has specific relevance for retail.
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What Does People Analytics Mean for Retail Companies in 2019?
Retailers have always had concrete expectations from their employees, quantifiable through sales numbers or footfall at stores. Using analytics, employers can find the missing links in workforce allocations and increase productivity. This will also make sure that every resource is properly utilized, maximizing HR investments. In 2019, the retail segment is ready to serve a new generation of consumers as Generation Z pours in their share of disposable income into purchase activities.
Also, expectations around the quality of experience are expected to rise, demanding exceptional services from the retail workforce. Additionally, several operational trends such as the decline in brick-and-mortar retail (with 3,800 stores closing doors by the end of this year) and a record boom in overall sales volumes will further drive the need for people analytics.
To keep up the momentum and combat market challenges, retailers need to ensure that their workforces are properly utilized. Some of the areas where people analytics can make a difference are aligning employee schedules to store traffic, predicting seasonal spikes/dips, and staying on top on individualized shift requirements.
Learn more: Reflexis’ New Intelligent Forms Improves Retail Workforce Communications
Three Benefits Retailers can Expect from People Analytics in 2019
With the labor market gradually tightening, retailers are ramping up hiring efforts. According to expert estimates, the industry hired 35,000 more workers per month in 2018 as compared to 2017. People analytics will help maximize the return on investment from these resources – as a result, retailers can derive the following key benefits:
1. HR can use people analytics to drive profitability
As discussed, retailers are prospering in the current climate, with 63 percent actually overshooting their revenue estimates in Q2 of 2018. While HR isn’t directly responsible for a retail company’s revenues and profitability, intelligent workforce management could help unlock more positive fiscal results. By understanding where a resource should be placed, how to meet a demand surge, and when an employee is underutilized, HR can help the organization improve its profit margins. People analytics can locate all of these levers, directly linking each employee’s performance to the business’s bottom line.
2. People analytics can predict attrition, keeping retailers ahead in a competitive labor market
Retention has always been a challenge for sales personnel, displaying an above average churn frequency. For retailers, especially when facing seasonal demand, attrition among top performers dents the bottom line. Cookie-cutter employee engagement tools that do not account for individual needs and preferences are not the way forward. People analytics can evaluate employee feedback and survey responses to find out exactly what’s missing and how employers can bridge these gaps. Tailoring engagement initiatives to insights derived from people analytics can go a long way in boosting retention.
3. Recruiters for retail can spot the best candidates in a crowd
In 2018, retail saw employee turnover increase to 81 percent (hourly workers) from 76 percent in 2017. This means that HR teams are constantly hiring, looking to maintain accuracy and efficacy despite employee turnover. Moreover, these recruits are directly responsible for customer satisfaction and retention. As we know, poor hires can lead to loss of business and credibility. People analytics helps retailers go beyond mere time-to-fill and cost-to-hire numbers. It can accurately depict the quality of hires by analyzing candidate attributes and skills.
Learn more: 4 Ways for Retailers to Attract and Retain Talent in the Gig Economy
Data analytics company Quantzig exemplified these benefits when it tied up with a leading Canadian retailer to solve its workforce issues and improve profitability. Let’s take a look.
Unlocking Positive Outcomes in 2019: A Case Study
In March 2019, Quantzig announced the completion of their engagement with a Canadian retail giant. The company struggled with high attrition and low productivity due to poorly planned workforce management. The key issue was siloed information and scattered data sources, which made it difficult to get clear insights. Quantzig devised a customized people analytics solution, which helped unify the full range of employee data into a single dashboard. The retailer’s operational effectiveness jumped three times as a result.
Solutions such as Quantzig’s are inspirational for retailers aiming to modernize their workforce operations by leveraging the latest digital technologies. People analytics is sure to prove to be a pivotal component of any retail HR team’s toolkit, helping to beat the competition and establish market differentiation in 2019.
Learn more: Why People Analytics is Key to Strategic HR Decisions
How is your organization planning to use people analytics in 2019? Visit us on Twitter, LinkedIn, or Facebook to share your insights.