Your current employee experience determines future customer loyalty
How you treat both employees and customers right now will ultimately be what folks remember. It will drive loyalty, or it will drive churn.
For retailers to transform their business, they need a workforce ready to meet the demands of today and tomorrow. To tackle challenges around changing business models, creating unique shopping experiences, and being more customer-centric, companies must adopt modern technologies to drive better business results – and HR is critical to building the right culture to attract and retain the best retail employees.
Human experience management (HXM) certainly involves new tools, processes, platforms, and technologies, but it’s also a philosophy about putting people at the center of work.
That’s because the employee experience matters – to engagement, productivity, and, ultimately, the bottom line of the whole enterprise.
When organizations lead with solid HXM, they create an environment where everybody can win – on the job and in the market.
This third episode of our LinkedIn Live series, “The Rise of HXM,” discusses HXM in retail. My cohost, Lars Schmidt from Amplify, explains that while the pandemic disrupted operations everywhere, HR was especially challenged. The interrelationships among its many variables, such as recruiting, communication, upskilling, and retention became significantly more complex. Our special guest, Denise Lee Yohn, talks with Lars and me about this complex topic. (You can watch the replay here.)
The war for talent: The challenges of attracting and retaining skilled people
Denise Lee Yohn is a brand leadership expert, best-selling author, and frequent keynote speaker deeply entrenched in the HR space. She explains that the term “retail” encompasses various industry segments and business models with two major overarching challenges. The first is what she calls the “war for talent.”
Attracting and retaining skilled people who want to work in retail has never been so difficult. The workforce at large is reluctant to jump back into retail because we all witnessed the vulnerability of restaurant and department store jobs during the lockdown.
The second major challenge is helping employees adapt to the dramatic changes in customer experience over the last 18 months.
Lee Yohn points to new delivery methods, new channels, and new services that now require employees “to support entirely new capabilities for the organization, which puts a lot of extra pressure on them.” And this change takes place in an environment already challenged to motivate workers in what are often low-paid, part-time jobs.
Pivoting from old-school human capital management to HXM
The change to HXM means transitioning from a process- or program-oriented HR approach to a human-centric one. Lee Yohn stresses, “The key imperative is a deep insight into what employees are looking for so that we can equip them to do great work. We’re also moving from a functional view of employees to a holistic one, taking into account their needs in all areas of their lives.” She adds,
“Employee expectations are increasing right along with increased customer expectations since retail employees are customers as well. We’re all being trained by the best companies in the world to get what we want where, when, and how we want it. So there’s a new social contract taking shape between employee and employer, in which employees expect their needs to be met, their values to be engaged, and their purpose to be connected to the organization’s purpose. HXM is about acknowledging that shift.”
Lee Yohn cites electronics retailer Best Buy as an example of a company that began upgrading to a more holistic HR approach 10 years ago. When a new point-of-sale (POS) system was slow to catch on, Best Buy listened to employee feedback and used design thinking and new technologies to enhance POS training. The resulting win was two-way: the customer experience improved, and employee satisfaction levels rose.
Beyond a paycheck: Culture, purpose, and values are key to retail employees in the future of work
As Lars points out, “Candidates today have expectations of new social rewards from work. A paycheck is no longer enough.”
Lee Yohn expounds, “Most people want to do meaningful work, something important that connects their specific day-to-day actions to a broader purpose.” She offers Starbucks as an example, with its stated mission “to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time.”
Because its employees – whom the company calls “partners” – are part of humanity, Starbucks supports its mission by offering them great benefits, such as stock grants and college tuition, and even expanding mental health benefits and opportunities to apply for extra help during the pandemic.
Companies must address the demands of savvy employees by demonstrating authenticity. Employees no longer believe in a mission simply posted “on a plaque in the breakroom or in words on a Web page,” as Lee Yohn puts it. “They want to know that their company lives and breathes the values it proclaims.”
She uses REI as a second example of a company that does just that, explaining that “REI is all about encouraging people to celebrate adventure outdoors. So several years ago, the company closed its stores on Black Friday with a program called ‘Opt Outside’ to encourage employees to have fun in nature, integrating core values directly into the employee experience.” That’s being an authentic company.
Millennial and Gen Z employment: 7 things young talent wants in a job
Millennial and Gen Z employment are entering the labor market in full force. While companies witness new sets of expectations when it comes to work life.
Nurturing a tight employee-to-customer connection
Productivity depends on a tight employee-to-customer connection. Lee Yohn cautions, “Loss of productivity happens when employees are misaligned or misdirected. They can be busy all day without creating impact with the customer. They need to be equipped with the means to gain real insight into customer needs.”
Exposure to customer feedback, even for employees behind the front line, can nurture the necessary empathy. She gives the examples of Adobe Systems, which expects most employees to listen in on customer support calls, and SunPower, which has designed a dashboard to display a detailed breakdown of the company’s performance meeting customer needs.
With such tools, employees can see the whole picture of customer satisfaction and understand how their actions affect the ability of downstream colleagues to keep customers satisfied.
Lars finds that “measuring productivity is the next frontier for HR, as the world moves toward remote and hybrid work models and managers can no longer simply go by the old-school metric of the number of occupied chairs in the office.” Lee Yohn points out that especially in the case of remote work, “there needs to be an implicit sense of trust between employer and employee, and it’s incumbent on the employer to demonstrate that trust first.” Business outcomes are better when managers do not hover, but rather describe goals and let employees figure out how to get there.
Metrics like outputs per employee or per employee hour have limited value in omnichannel retail, where outcomes depend on sequential input from several different departments or employees. Bringing a customer to the point of purchase may take representatives of corporate communications, marketing, product development, customer service, and sales.
HR in Latin America: Discover the power of employee-centric tech
The state of HR in Latin America is critical to dealing with the pandemic and future business success. Read real-life examples of companies excelling with HXM.
Optimizing the employee experience for best business outcomes in retail
Now more than ever, HR must put employees and their needs first. It needs to provide tools and technologies to make everything at work easier and more intuitive and to give employees new ways to connect with customers. And Lee Yohn stresses, “We need to keep everybody involved in the customer interaction aware of what the brand stands for and how to serve customers by applying its values.”
HR must help retail businesses support their employees and empower them with new ways to learn and connect with people.
That means giving them ownership of their development and growth and treating them as individuals who deserve a personalized experience. When we optimize HXM, as Lee Yohn says, “We achieve higher closure rates, greater brand loyalty, and wider profit margins. It’s a win for the whole company.”
