Focus on the future

A near horizon focus on retail’s post-COVID-19 workforce disruption


Focus on the future

September 09, 2020

 

For the Retailer, there was no simple answer to the question — “What steps do I take on coronavirus to ensure the well-being of my people and keep the business operating?“ — Yet, retailers had to formulate a response. Digital fluency competency became key, while in-store customer service competencies became less relevant. Fulfillment logistics went from one of several core processes to virtually the entirety of operational concerns.

 

When COVID-19 spread across the world, retailers were met with a number of disruptions and challenges:

 

  • Supply chains were stressed, and many were unable to cope
  • Sales at physical stores shifted from closed store fronts to ecommerce warehouses
  • Essential retailers had products of all shapes and sizes being sold out in minutes
  • Last mile delivery experienced significant demand growth
  • Fulfillment centers became warehouses for some products and expressways for essential products to meet demand
  • Employees were needed to maintain operations, but protecting their health was a major challenge

Against this backdrop of systemic stress and the duty of care for employees, the retailer response was varied in proactivity and focus:

 

  • Develop pay premiums for front-line workers
  • Continue wages and benefit premiums even though brick and mortar locations were closed
  • Immediately create work-from-home guidelines
  • Freeze merit increases or reducing pay at headquarters
  • Do little and “wait and see”
Leaders should redesign their operations based on data provided by their most valuable sources of proprietary insights — their employees. When leaders take this bottom-up approach, we have found they not only cut costs significantly but also realize their goals more rapidly because managers and employees are motivated to help. Changes are then also more likely to stick.1

“Wait and see” was the most frequent response in each of Mercer’s Retail COVID-19 Surveys. When businesses reached for their business continuity plan, there generally was no section that outlined the steps for a pandemic response, and certainly none of this magnitude. Retailers were in a frenzy to figure out how to maintain operations and provide value to customers, but few took bold action for fear that a wrong step might harm employees and the brand. Yet, in our experience, the retail organization that hesitates to reinvent for this moment and the future which awaits will have missed the moment.Over the last few months, as the dust has begun to settle, four key areas in human capital are emerging as critical front-and-center issue for retailers wishing to create a brighter future for their people and ensure the sustainability of their businesses.

 

  • Organizational readiness
  • Supply chain readiness
  • Fulfillment infrastructure and delivery operations
  • The work experience

1 Source: https://www.oliverwyman.com/our-expertise/insights/2020/may/in-a-downturn-include-your-employees-in-cost- cuttingdecisions.html


by David Kopsch
Principal

Karen Rutledge
Career Products Industry Relationship Manager

Download the "Focus on the future" paper