Labour woes are the top challenge for businesses: Survey

What’s keeping retailers and other executives up at night? Look no further than the “Help Wanted” signs in their windows.

A June 2022 survey by WorkJam, a digital front-line workplace platform for organizations with shift and hourly employees, found that leaders consider labour shortages (48%), employee turnover (31%) and even workplace stress (10%) as larger operational challenges than supply chain issues (9%). The study engaged 138 global executives in 21 major industries, including retail, manufacturing, consumer goods and transportation and warehousing.

The study also found that employee retention trumps improving customer service as executives’ No. 1 priority. One third of respondents cited retention as their top imperative, followed by attracting talent (28%), upskilling staff to be able to “do more with less” (20%), improving operational efficiency (12%) and delivering better customer service (7%).

Rich Halbert, chief strategy officer at WorkJam, says two problem areas are “white hot” right now. First, the pandemic created a deep “Us versus Them” divide for companies with front-line workers because it was basically business as usual for corporate employees who were able to work from home and continued to get paid.

Front-line employees, on the other hand, were either sent home and out of work or had to continue working on the front lines and face the risks of the pandemic. “But the bottom line is they only got paid if they worked. And if they didn’t, they didn’t get paid. And so, that created a big divide in the employee base,” says Halbert. “Now, there is a big effort around bridging that in a more sustainable way.”

The second problem area is hiring and retention. “Businesses have to do more with less and then somehow make their workplace the place people choose over others,” says Halbert. “Some of this is shifting away from the employee’s favour, but employees have been very much in charge of their destiny for the last couple of years because there has been so much hiring required and options everywhere.”

Other key findings in the survey include:

· Executives understand better retention is linked to business success: 72% of respondents understand investing in employee retention will result in better ROI, but only 50% think their organization is doing an excellent or good job retaining front-line employees.

· Diversity, Equity & Inclusion (DEI) initiatives rank low on employees’ list of desired workplace improvements: Scheduling flexibility (57%) tops the list of areas employees have indicated they’d like to see improvements. Meaningful work (54%), compensation (53%), schedule predictability (49%), growth (46%) and company culture (45%) all ranked much higher than DEI efforts (17%).

· In retail, front-line workers are looking for better pay and scheduling: Retail industry executives say their front-line employees are looking to them to boost pay and provide more flexible schedules, with each factor cited by 57% of respondents. Employees would also like to see improvements in schedule predictability and career growth opportunities, both at 52%.

· Companies are prioritizing mental health services as important workplace benefits: 62% of respondents said their company either already offers or plans to offer mental health services to employees. In addition, 67% offer or plan to offer employee rewards and 63% offer or plan to offer flexible/self-scheduling arrangements.

“Mental health and work-life balance is definitely a concern because even though employees have a job they’re doing, there is still a lot of external pressure and stress and people with multiple jobs,” says Halbert. “This is a world where if they don’t work, they don’t get paid. And that in and of itself is naturally stressful. But in an inflationary world where you’re under more financial pressure, that definitely adds to the problem.”

· The majority of executives are confident in their company’s ability to engage and enable employees: 68% of respondents think their organization is doing an excellent or good job of engaging front-line employees and 65% say the same about improving the employee experience by providing access to continuous learning and professional growth tools. However, only 50% say their organization is doing an excellent or good job of retaining workers, indicating there’s room for improvement on the engagement and enablement front.

· Compensation and better career path opportunities are the main reasons employees leave: Three-quarters of executives think employees are leaving their company for better-paying jobs, while 67% think they’re leaving for career development reasons. Less than half (49%) believe employees leave to attain better schedule flexibility and work/life balance and only 44% believe employees leave in search of better benefits.

· More than four in 10 execs surveyed said they're trying to improve retention by sharing employees across locations: While pay increases (60%) and adding perks (50%) top the list of ways companies are trying to improve retention, 41% said they’re looking to share employees across locations and regions.

“If you have a grocery store in one town and five miles away have another store, your employees can work in both,” says Halbert. “This creates options and flexibility for employees and, in turn, employers can spread their labour pool and use [that flexibility] as a recruiting tool to attract employees. And so, all these things are interconnected.”

At the 30,000-ft. view, Halbert stresses front-line employees are both critical and underserved, and it’s imperative to meet their needs. “Companies need to get it together or they’re going to be out of business. That’s the risk to them,” he says. While employees can always move on and find another job, Halbert says, “Companies really need to take this seriously and find solutions that improve the situation for these workers. I really believe in that.”