If you want to know the state of workforce management and productivity in the food retail industry, just look at what the nation’s No. 1 seller of groceries is doing.
Over the past year, Walmart Inc. has flooded its stores with robots that mop floors and stock shelves. The mega-retailer has also ramped up workers’ benefits to include expanded medical care, free college, innovative management training programs and a pledge to pay most of its hourly associates at least $15 an hour — some workers will earn much more — by the end of this year.
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- Grocers must take steps to empower their associates to make significant business decisions that could have a bigger impact on the bottom line.
- Among the workforce challenges that food retailers will need to grapple with in 2020 and beyond are recruitment, retention, training, diversity and inclusion.
- Another key factor driving workforce transformation is a decrease in the number of physical store jobs as the nature of work is redefined by technology; however, this decrease will be offset by growth in jobs in delivery, customer service, technology and fulfillment.
“We believe this is the key to winning the future of retail,” says Drew Holler, SVP of associate experience at Bentonville, Ark.-based Walmart. “There are many examples where we are seeing the power of our associates’ creativity and how that’s helping our customers. These aren’t always stories that make headlines, but they add up to a big impact.”
“The power of creativity” is surely one way to define (redefine?) America’s food retail workforce in 2020.
Nearly 5 million people are employed in retail jobs, and almost 3 million of those people work in grocery stores. Many of these jobs still involve old-fashioned tasks in physical stores, but the reality is that today’s food retail industry is a collage of full-time employees, gig workers and artificial intelligence performing an ever-widening range of tasks.
When Kroger hired workers in 2010 for retail jobs, those workers might be expected to operate cash registers, clean bathrooms or slice turkey in the deli. As we enter a new decade, those same workers might be expected to troubleshoot shipping delays for online orders, load groceries into car trunks in the middle of a snowstorm, earn five-star Google reviews for good customer service, deliver pizzas to shoppers’ homes, or even grill a perfect porterhouse steak for a diner in a store restaurant.
Meanwhile, unemployment is at a 50-year low, and many of the (younger) workers who are ideal candidates for these tech-oriented, multifaceted jobs are as demanding as the new generations of shoppers crowding grocery stores with requests for one-hour delivery of hot vegan chili. All of this amounts to a tidal wave of workforce challenges for food retailers that must be overcome in 2020 and beyond.
So what can grocers and other food retailers do as they head into this labor maelstrom? Of course, implementing the latest in-store technologies and optimizing selling channels are good places to start, but there’s an important opportunity that shouldn’t be missed: empowering workers — many of whom will be Zoomers, or Generation Z — to deliver a superior food shopping experience that puts your brand above the competition. Grocers must take steps to empower their staffs to make bigger business decisions that could have a bigger impact on the bottom line.
Here’s a look at the workforce challenges that food retailers will need to overcome in 2020 and beyond:
In a tight labor market in which wages are rising, food retailers have an especially acute challenge when it comes to hiring the right talent for increasingly tech-heavy jobs. Employees today must have a solid understanding of both digital and physical retail, and be able to deploy the latest tools to propel their company forward.
“Food retail is an industry that tends to have turnover rates on average multiples of times ahead of the rest of the country,” says Matt Zender, workers’ compensation VP at New York-based AmTrust Financial Services. “Some retailers are taking creative approaches to their package, whether it’s in wages or other benefits, as they try to attract a higher quality of candidate, but also as they try to entice employees to stay, to lower their turnover rate.”
The increase in competing jobs that offer both flexibility and worker protections will also be influenced by state regulations such as California’s AB5, which went into effect on Jan. 1. According to the San Francisco Chronicle, AB5 makes it harder for companies to claim workers are independent contractors. The law says that workers should be employees unless a) they are free from a company’s control, b) do work outside the company’s core business, and c) have independent enterprises performing the same type of work.
“Some of the asks from prospective employees are unreasonable,” Zender notes, “but retailers should be trying to create an environment for employees that will cause them to feel better about where they’re working. I think retailers are now realizing that they might need to foster a workplace that’s going to cause people to feel excited about where they’re working at.”
To attract and retain more talent and a better caliber of employee, food retailers are going to have to take new approaches to training and development. Some companies, such as Walmart and Kroger, are investing in upskilling programs for existing employees across the organization, whether they work in stores, offices or a warehouse.
Walmart specifically is emphasizing upskilling and career growth opportunities as key strategies for retention of its workforce, including:
- The launch of Walmart Academies, an immersive training program tied to a working supercenter, allowing associates to receive both classroom and sales floor training in advanced retail skills and soft skills like leadership, communications and change management. In 2018 alone, Walmart trained 450,000 associates, including frontline supervisors, department managers and assistant managers in these academies
- The creation of a new video game called Spark City that allows employees to role play as a department manager. Through the game, associates enrolled in Walmart Academies learn the same techniques and processes that they would use on the sales floor in real life
- In partnership with Guild Education, Walmart’s Live Better U program is giving associates the opportunity to earn debt-free degrees in business or supply chain management for just $1 per day. Walmart covers remaining costs and other required fees
- Associates are receiving college credit for paid training at Walmart Academies. As of 2019, associates had already earned more than $317 million in college credits
- The mega-retailer is also offering education benefits for GED, high school completion, language training and professional development
- In Walmart’s fiscal 2019, the company promoted more than 215,000 people to higher-paying jobs with increased responsibility
- Full- and part-time associates are eligible for quarterly bonuses based on store performance. In Walmart’s fiscal 2019, hourly associates earned nearly $800 million in bonuses
Other key training and retention trends that food retailers can expect in 2020 include the growth of upskilling for jobs in foodservice, distribution, delivery and logistics. As food retailers continue to invest heavily in machine learning and automation, opportunities for upskilling will only increase. This is a great strategy for retaining workers who are hungry for career advancement.
Trying to appeal to a younger, more diverse demographic is no longer a matter of if, but how. The youngest generation in the United States — those born after 1996 — is the country's most racially and ethnically diverse generation, and is on its way to becoming the best-educated generation yet, according to data from the Washington, D.C.-based Pew Research Center. Nearly half — 48% — of Zoomers come from communities of color.