Labor shortage in retail: a significant revolution is on the horizon

The quest for suitable personnel is one of the biggest challenges facing independent entrepreneurs today. SuperMAG brought together four experts, including Luc Ardies (Buurtsuper.be), Eline David (NOWJOBS), Simon Sintobin (bookU), and Guy Van de Poel (Spar Lichtaart), for an engaging discussion on the future of retail.

There's a lively buzz in the offices of NOWJOBS, which are bursting at the seams. 'We've moved four times since our inception, but we're settled here now,' says Eline David, co-founder and general manager. This Ghent-based scale-up specializes in digitizing flexible work and connects, through its app and web platform, additional workers with companies in need of extra help. It entered into a strategic partnership with bookU, which developed a planning tool for entrepreneurs.

"We act as facilitators," explains Commercial Manager Simon Sintobin. "We streamline daily and weekly schedules, find resources... We're always looking for ways to make life easier for retailers. But the human aspect remains crucial; an app alone will never be able to do all the work."

“The labor market scarcity has shifted the balance of power, giving more leverage to job seekers.”

The other table guests are no strangers to each other either. Guy Van de Poel from the Spar neighborhood supermarket in Lichtaart is part of the strategic team brainstorming around the app. He knows better than anyone else, from practical experience, what shop owners need. 'I was one of their first retail clients,' Guy remembers. And when it comes to neighborhood supermarkets, you think of Luc Ardies. Luc is the general manager of UNIZO Winkelraad, managing director of Buurtsuper.be, and founder of PMO, an HR company that organizes staff training. In addition, he is also the author of ABC books on the new way of working, such as ‘Waarom witte raven niet bestaan’ ('Why white ravens don't exist').

^{_{Simon Sintobin, bookU: “An increasing number of supermarkets are reevaluating turnover as the primary metric and are exploring alternative indicators, such as transaction volume.”}}

Many neighborhood supermarkets and specialty stores are grappling with a staff shortage. How pressing is the situation and what can entrepreneurs do about it?

Luc Ardies: "We're on the brink of a significant shift. Due to the tight labor market, power has shifted from employers to job seekers. The dynamics have essentially flipped. This means employers need to consider the profile of job seekers and think about how to integrate them into their organization. For example, if someone requests to work 4/5, you need to consider how to accommodate that, rather than immediately pushing back."

Guy Van de Poel: "Work-life balance has become incredibly important. Just last week, I had an interview with someone who was excited to start with us. After the weekend, she called me in tears to say she wouldn't be joining us after all. She couldn't make it work at home. It's unfortunate, but these kinds of situations, which are separate from the work itself, are becoming more common."

Eline David: "A new generation has emerged that knows exactly what they want. They, the Z'ers, have their demands - including financial ones - because they know they'll be working for a long time. Their communication style is also different. Many of our flexi-jobbers no longer answer their phones; they primarily communicate through our app and outside traditional office hours. It's up to us to adapt to this."

Luc: "People sometimes think that the new generation only wants to do enjoyable tasks, but that's not the case. It's a matter of convincing people of the importance of certain tasks for the organization. Then, they accept the less enjoyable aspects of their job. Employer branding is crucial in this context. Highlight the value of your local supermarket to the community. When store employees feel they have an important role to play there, their intrinsic motivation increases."

Guy: "Employers also need assistance. Since we started using bookU, for example, I'm automatically reminded of an employee's birthday. They receive a €25 gift card and some treats. It's a negligible cost annually, but our people really appreciate it."

^{_{Guy Van de Poel, Spar Lichtaart: “We still employ four butchers. While this incurs costs, they also play a crucial role in retaining our customers.}}

Are flexi-jobbers part of the solution?

Eline: "There's a new kind of normal emerging. Having a side job used to carry a somewhat negative connotation. But since COVID-19, that's completely changed. Even highly educated individuals often choose to have an additional source of income nowadays. For example, accountants consciously decide to work one day in a local store over the weekend. 80% of our flexi-jobbers opt for something completely different from their main job."

Luc: "For trade unions, flexi-jobs are like swearing in church, but for the sector, they're a blessing. They make it much easier to solve the puzzle."

Simon: "Speed is also crucial here. Take the recent farmer strike, for instance. Shelves were empty and needed to be quickly restocked. How do you schedule those extra restocking hours? And how do you do it as efficiently as possible with a team of temporary and permanent employees? BookU can assist retailers with this."

Guy: "My staff planning used to be contained in a single Excel file, and every workday looked the same. That doesn't work anymore. Profit margins are smaller today, so we have to think more about efficient staffing. On the staff side, things have changed too: it's much harder these days to find someone who can start, for instance, at 8 a.m. or who is available one Sunday out of four. In that regard, flexi-workers are a godsend."

_{^{Luc Ardies, Buurtsuper.be: “Flexi-jobs are seen as a taboo by unions, but for the sector, they are a blessing in disguise.}}

The regulation concerning flexi-jobbers has changed since January 1st. Is it still worth the effort?

Eline: "The system has been needlessly made more complex and creates competition between sectors. For instance, as a childcare provider, you can now earn 19 euros net per hour, while in the hospitality sector, it's only 12.5 euros. For many, the choice is quickly made. Or drivers going from 12.5 to 15.4 euros per hour. That has a huge effect on the entire chain, and Belgium was already a leader in Europe in terms of labor costs."

"Having a side job used to carry a somewhat negative connotation. But since COVID-19, that's completely changed."

Luc: "It's still too early to see the full effect of the new regulations. In any case, that flexi-job status is the best thing that's happened to us, but for employers, it has indeed become significantly more expensive, fiscally, to hire employees and pensioners as flexi-jobbers. Older workers immediately enter a much higher wage scale."

Eline: "Yet it's precisely in that group - those that have already retired - where there is a large untapped potential. The legal retirement age is still 65 today. But today's 65-year-olds are much fitter than, say, 40 years ago. They can and want to work. We even have someone who is 85 and still works every week."

_{^{Eline David, Nowjobs: “A new generation has emerged that knows exactly what they want. It's up to us to adapt to this.”}}

Personnel expenses play a significant role in determining profitability. How should entrepreneurs navigate this challenge?

Guy: "To me, payroll costs aren't the be-all and end-all. What really matters is what customers take home and what remains in the bank account. We still employ four butchers, and yes, they come with a price tag, but they also ensure customer loyalty. Losing them would be detrimental."

Simon: "Our tool enables us to monitor the wage-to-revenue ratio. However, we're noticing a shift in focus among supermarkets, with some reevaluating turnover as the primary metric and exploring alternatives like transaction volume. This shift has implications for checkout staffing levels."

Luc: "Certainly, revenue alone doesn't tell the whole story. In our industry, profitability hinges on gross margins. We need to cover various expenses before we can consider profit margins. That's why gross margin might offer a more accurate picture. From an efficiency standpoint, we can't compete head-on with large corporations driven purely by cost considerations. We need to differentiate ourselves by emphasizing a service-oriented approach. However, this requires staff willing to go above and beyond for customers. As labor costs become increasingly influential, a leaner core team supplemented by temporary and part-time staff appears to be the future for neighborhood stores."

Feeling the need for a U-turn
in your planning, administration, and/or time management?

Get your demo!