How can retail, restaurant, food and beverage companies tackle worker shortage risks?

With many retail, restaurant, and food and beverage employers struggling to recruit quality talent for their open positions, those employees remaining in the industry — especially those with experience — have a choice of where to work. This is facilitating worker movement and creating a more favorable job market for workers. For businesses, this is creating a critical employment shortage.

Worker with scanner checking inventory of goods in a warehouse.

How can retail, restaurant, food and beverage companies tackle worker shortage risks?

Millions of retail and food service employees — including restaurant workers — quit their jobs in the last five months of 2021 as the “Great Resignation” continued, hindering attempts by retailers and restaurants to speed their recovery from the COVID-19 pandemic.

Burnt out following months on the pandemic frontlines, or still recovering from the financial and psychological impact of job losses or furloughs during lockdown periods, many employees have taken a step back to determine whether their current jobs fulfill their immediate and long-term work/life needs.

With many retail, restaurant, and food and beverage employers struggling to recruit quality talent for their open positions, those employees remaining in the industry — especially those with experience — have a choice of where to work. This is facilitating worker movement and creating a more favorable job market for workers. For businesses, this is creating a critical employment shortage.

What is behind today’s labor shortage?

Low wages coupled with physically strenuous tasks have long contributed to high employee turnover for retailers, restaurants, and food and beverage companies. And dwindling birth rates since the 1990s mean that the cohort of available workers has been shrinking for some years.

The pandemic exacerbated the problem. Whether they saw their working hours slashed or multiplied, many workers have since re-evaluated their needs and priorities.

Groups of workers that were either furloughed or laid off in 2020 were forced to search for alternative employment or find a way to live within their new financial means. And as the country started reopening, many workers who were willing to return were constrained by a lack of reliable childcare amidst a worker crisis within that industry.

Meanwhile, those employees at essential retail stores and food manufacturing companies found themselves on the frontlines of the pandemic, working long hours and subject to overwhelming complaints and even assaults by angry customers.

These and other contributing factors have pushed workers to consider whether they want to remain in the industry.

Mass resignations threatening workplace safety

The loss of experienced, capable employees is putting a strain on workplace safety. Employees are at the highest risk of injuries during their first year at a job, with injuries tapering off after the first 12 months as workers become more familiar with their tasks.

But as turnover ramps up, and companies lose experienced employees, there is a significant risk of increased injuries. The risk challenge becomes more pronounced when companies hire employees who have no prior experience conducting the tasks required in their new job. In addition, when experienced workers leave, companies lose an important source of training and knowledge sharing that can be critical to help new employees learn how to carry out tasks safely.

As COVID-19 infections drop across the US and mitigation measures — such as masking — are eased, retailers, restaurants, and food and beverage companies should consider a number of measures that could help relieve critical staff shortages that might otherwise hamper their recovery.

1. Involve your people in open communication

Understanding your people’s needs requires continuous communication and providing employees with a platform for open discussion. Your people are carrying out the multiple day-to-day tasks required to serve your customers, which puts them in a good position to identify challenges, such as equipment that is not working effectively. They are also well placed to pinpoint opportunities for improvement, such as streamlining tasks to reduce strain.

Involving employees in the decision-making process goes beyond gaining firsthand feedback — it also shows your people that you value their opinion and want them to be part of the process to make their workplace better. Open communication will be crucial — employers should provide progress updates and consider explaining the reasons behind final decisions, for example when a popular request cannot be executed.

2. Move beyond one-size-fits-all rewards program

More than ever before, organizations are recognizing the importance of having a more diverse workforce, and the risks of not embracing diversity, equity, and inclusion. From new entrants to employees with decades of experience, the retail, restaurant, and food and beverage industries are now comprised of a wide diversity of workers with different needs and preferences. Yet, companies have lagged behind in offering benefits and total reward programs that meet the needs of this diverse workforce. As companies seek to attract new people and retain their current workforce, they should review existing benefits and rewards programs and consider whether these are sufficient.

More than a third of retail industry respondents to Mercer’s recent Global Talent Trends survey underscored the importance of their organization offering more types of rewards and compensation. These findings show that this is the time to move away from one-size-fits-all programs and instead consider the benefits of hyper-personalized rewards and benefits programs that are tailored to employees. For example, while some of your workers would appreciate assistance to continue with their education, others might find more value in a more flexible schedule that allows them to balance their work with personal commitments.

A thorough understanding of employees’ preferences requires continuous open communication that encourages your people to make suggestions for improvements to existing rewards programs.

3. Make safety a powerful differentiator

Fatigue can be a precursor to injuries. Introducing a fatigue management program can help identify causes of potentially dangerous fatigue and allow employers to make changes to processes or schedules to reduce fatigue.

Training is only part of the process to keep employees safe. Companies should establish a robust management oversight process that can quickly identify and address any potentially dangerous practices. Properly trained safety leaders can be a company’s eyes and ears on the ground. Aside from flagging any unsafe practices, they can help identify potential changes to improve their colleagues’ safety, for example, by changing schedules so that tasks requiring high energy are carried out earlier in a shift.

As employers set out to redesign the workplace, they should involve their people. Restaurant employees, for example, will have valuable insights into kitchen processes that may reduce risk, such as stocking the items they reach for most often at a more accessible level to minimize the risk of ergonomic injuries.

Effective safety leaders seek to engage their staff and build trust within their teams. This provides team members with an opportunity to raise safety issues. And it’s important to acknowledge team members when they demonstrate the desired — and expected — safety behavior.

It is also important for risk managers to keep a close eye on claims data to pinpoint as early as possible potential safety challenges and make the necessary changes. For example, consider reviewing tasks if you see an increase in particular injuries. Note that a reduction in musculoskeletal risks or in slips, trips, and falls can also help decrease employers’ total cost of risk.

4. Develop an employee value proposition

In a talent marketplace where retailers, restaurants, and food and beverage companies are battling for a dwindling pool of people, workers with a wider choice of companies to choose from may look beyond financial incentives and benefits. Lippincott’s Brand Aperture℠ Engage research shows that employees who have a strong connection with their employers are 27 percentage points more likely to remain at the company and 28 percentage points more likely to go above and beyond in their work, helping their employers achieve year-on-year revenue growth that was around 25% higher than the median.

As they look to attract and retain workers, employers should look at different ways to make their people feel valued. Consider providing your people with a purpose by underscoring how the tasks they are responsible for contribute to the company’s overall performance. For example, checkout employees are, at times, the only individuals that consumers interact with and it is important that they understand the critical role that customer experience plays in overall revenue generation.

As part of the effort to increase employee engagement, managers can identify any tasks or processes that their staff members do not like doing and consider sharing deeper insight into why those that cannot be scrapped are essential for the organization, whether it’s due to safety or compliance or because they drive important revenue.

As worker shortages persist, employers need to take action to identify and address their employees’ specific needs and invest in their health, safety, and development. This can not only improve productivity, but also their engagement with and loyalty to your organization, making you their employer of choice.

This article was prepared by Marsh’s Retail, Wholesale, Food and Beverage Practice, with contributions from Marsh Advisory’s Workforce Strategies Practices, Mercer, and Lippincott.