Workforce planning is hardly a new concept, but it is becoming more complicated.
When the financial crisis hit a few years ago, retailers and CPG companies were challenged to reduce short-term staff strategically without losing critical talent. The object was not only to weather the economic storm, but also to think ahead to how labor decisions would impact a company's long-term future. Executives then had no idea an entirely new – and far more complex – workforce challenge was right around the corner.
Today's employee pool spans more generations and more ethnic cultures than ever before. The diversity represents a trend that's expected to continue over the next decade. Responding to it has become "a life and death situation" for retailers, says Andres Tapia, chief diversity officer/emerging workforce solutions leader at Aon Hewitt and author of "The Inclusion Paradox: The Obama Era and The Transformation of Global Diversity."
"Retail companies that don't realize that the world and workforce have changed are not going to survive, and companies that do will survive and thrive," Tapia told interviewers in a Network of Executive Women report titled "The Changing Consumer and the Workforce Imperative." The report, released earlier this year, was produced in partnership with Deloitte LLP and includes interviews with executives at two dozen U.S. consumer goods and retail companies on the subject of diversity in the workplace.
"A diverse workforce leads to better insight into consumers and customers so that companies can develop the right kind of programs and products that meet their needs," says Joan Chow, chief marketing officer at ConAgra Foods, in the report.
Don Knauss, chairman and chief executive officer of Clorox Co., says paying attention to diversity helped revitalize the Kingsford brand of charcoal, which had been waning due to the increased popularity of gas grills. By targeting the Hispanic population, the brand experienced a 4 percent to 6 percent jump in sales. "Latinos barbeque and cook outside more often, oftentimes with wood char," Knauss writes in the report. "We focused on getting them acclimated with charcoal briquettes. Connecting with them and our brand and introducing charcoal transformed what was a flat business to a growing business."
At other manufacturing companies, innovation has been driven in part by a diverse workforce. At Campbell Soup Co., the Select Harvest brand was developed by women employees for women consumers. And Asian employees at ConAgra spurred the development of its new line of Healthy Choice Steamers quick meals.
These rapidly changing ethnic and generational demographics are having an impact on consumer trends and workforce demands at the same time, causing a "double whammy" for retailers, says consultant Amy Hirsh Robinson.
"I've been working with the HR and executive counterparts to really create and drive the implementation of strategies that help prepare organizations for these changing shifts," explains Robinson, principal at the Interchange Group, which specializes in "workforce strategies for the new economy."
In addition to building a more ethnically diverse workforce, Robinson says, retailers also are struggling to find new ways to recruit and maintain the millennial generation. "Our leaders really need...an awareness of generational differences. [That means] not only understanding the consumer side but creating effective management strategies," she explains.
The food industry has its work cut out, according to the Food Chain Workers Alliance's "The Hands That Feed Us" report, which indicates many of today's U.S. food workers can barely afford to put food on their own tables because their employers provide low wages with little access to health benefits and opportunities for advancement.
The survey of 629 workers, released in early June, indicates some segments of the food chain are likely to experience greater potential for career advancement than others. Discrimination and segregation tend to concentrate people of color and immigrants into the lowest paying positions, which only further defines the need for more diverse and equitable workplaces, the report suggests.
Retailers will need to adjust to recruit the talent they need in the future, says workforce demographics expert Marilyn Moats Kennedy of Moats Kennedy Inc. in Chicago. The trend of anti-union millennials seeking part-time work schedules does not bode well for the future of organized labor in the food chain sector, she says. Instead, it will be up to retailers to retain those millennials and part-time employees by treating them fairly. At Costco, "people stay forever because they get health insurance and they get treated decently," Moats Kennedy says.
Employees of Tomorrow
Planning today for the workforce of tomorrow is critical, experts say. The question is, what will that workforce look like?
Reports from the 2010 Census indicate the population is becoming perhaps the most ethnically diverse in history, with minority births comprising 50.4 percent of the U.S. population. According to 2010 Census Briefs (released in May 2011) the Hispanic population increased by 15.2 million between 2000 and 2010, accounting for more than half of the 27.3 million increase in the total U.S. population. The Mexican population alone climbed 54 percent to 31.8 million in 2010 from 20.6 million in 2000.
What does this mean for retailers? In some retail markets, having employees who speak Spanish is already a necessity. Some stores are embracing ethnic diversity by listing the employee's country of origin on the name tag.
Yet another kind of diversity also is necessary, one that mixes a workforce traditionally dominated by baby boomers with a crew of millennials who grew up in a digital culture.
"There are a lot of differences there," explains Maggie Gilliam, an analyst at RetailNet Group. "One of the biggest things that we talk about is how these younger generations are digital rather than mechanical. They've grown up using their iPhone for everything. They have a different way of processing information and their expectations are very different."
Moats Kennedy predicts job-sharing retirees could be the next generation of grocery store managers."They get along better with the young, not like the boomers who complain about the [millennials'] work ethic," she says. "It will also help the supermarket industry because they won't need health care."
Some companies have started planning for the future by going straight to their employees for suggestions, says Rick Sherwood, senior consultant at Towers Watson. "The grocery industry is spending quite a bit of time and money surveying, looking at age breaks through employee surveys, trying to figure out what engages a 25-year-old cashier versus what engages a 45-year-old store manager," he explains.
To that end, some retailers are turning to store-level employee councils for feedback. "Whether it's called a people council or an employee council, the purpose is to get an idea of what's working and not working from an employee perspective," Sherwood says.
Bringing in employees at this level can be empowering, particularly among the younger generation. Employees at Kroger stores across the country have started Facebook pages to communicate about store issues and share ideas for improvement. Using social media and text messaging can improve communication and bring the generations together, Sherwood adds.
Leaders of the Future
While millennial employees in the grocery industry often are college students lured by the flexibility of part-time scheduling, companies such as Kroger and Safeway are being strategic in identifying "high performers" for future advancement, Sherwood says. "My clients definitely assume that some large percentage of their young, part-time population is not going to stay," he explains. "With that, they are trying to seek out the high performers and high potentials."
After all, the managers of today are the retirees of tomorrow. Who will replace them? With many senior leaders approaching retirement age, companies must find or develop talent to succeed them, Sherwood says.
Public relations is more important than ever in attracting and maintaining the next generation of leaders, because the millennials haven't always perceived retail as a promising career, Robinson says.
Millennials are likely to seek employment with a company striving to make a difference in the world. "One of the things that I often do with clients is work with them on their own employer branding, identifying what employees get in return for working for this company," Robinson adds.
Whether you're trying to attract millennials or build a more ethnically diverse talent pool, one thing is clear: The future starts now.
6 Tips for Better Workplaces
To improve recruitment and retention, employers should:
1. Permanently enhance job quality by increasing wages and benefits.
2. Adopt fair hiring and promotion practices.
3. Clearly communicate company policies and procedures, including anti-discrimination and harassment policies, to protect the well-being of all workers.
4. Adopt benefits, such as paid sick days, that would allow employees to care for themselves and their families.
5. Understand and follow equal opportunity laws and techniques that successful food system employers use to implement livable wages, benefits and career ladders.
6. Respect the internationally recognized workers' right to freedom of association and collective bargaining.
Source: "The Hands That Feed Us" report by the Food Chain Workers Alliance