Retail has been among the sectors most dramatically impacted by the pandemic, though it’s impossible to paint the industry with a broad brush.
With widespread furloughs and a growing wave of bankruptcies, many retailers were hit hard. Others were caught up in an unexpected boom, though that doesn’t mean they’ve evaded the volatility of the pandemic.
For those that are struggling, the current market climate has heightened the demand for agile systems that support the employee experience and offer the flexibility to adapt to new needs and demands. This includes clear lines of communication with employees as they’re furloughed, laid off and re-hired amid reopenings. For those enjoying a burst of sales, it similarly illuminated the need for technologies to help employers and their employees keep pace with changing customer demands as a result of the pandemic.
As John Orr, senior vice president of retail at Ceridian, recently described to Karen Webster, the retailers employing a mix of in-store purchases, curbside pickup and online sales were more inclined to bounce back. Similarly, those businesses that already had modern human capital management (HCM) software to help manage, pay, schedule and engage their people were ahead of the game.
“Flexibility and agility are the common factors among the retail winners,” said Orr. “More than ever before, brands must evaluate their revenue model, customer journey and all-important employee engagement strategy and approach.”
Driving Employee Financial Wellness
In what has historically been a consumer-centric industry, retailers need to prioritize the workers who ultimately drive its success. During this critical recovery period, retailers should be asking themselves: “What does employee engagement look like going forward?”
To Orr, fostering a thriving workforce means embracing modern HCM and payroll technologies that deliver quantifiable value to both the business and the employee. More than ever before, retail leaders must address the financial pressures employees are facing.
Payroll, as a component of the broader workforce management strategy, is well-positioned for a digital facelift. Early access to earned wages is among the most effective strategies to promote the financial wellness of a retailer’s workforce. As Orr explained, not only does this capability enable employees to access and manage their personal earnings, but it can also act as a competitive differentiator to attract and retain talent.
“Allowing employees to access their earned wages – free of charge – whenever and wherever they want, gives associates more control over their finances and will help improve employee engagement and financial flexibility,” Orr noted.
But among the largest value-adds of on-demand wage access is its ability to harmonize the human capital management strategy.
Employers with flexible systems in place, including the ability to facilitate real-time data access and accurate up-to-date information on the wages that employees have earned, will be able to offer workers a modernized way to access earned wages. Modern payroll technology must also seamlessly manage shifting pay rates, furloughed employees, changing legal requirements and compliance needs, as well as geographically dispersed teams.
The benefits of having systems in place that can support these capabilities go beyond offering early wage access. For organizations, Orr pointed out, the value is in helping employers deliver accurate, compliant payroll processing that optimizes labor spend while also adding value for employees.
Turning Lemons Into Lemonade
A digital shift in the retail sector was already well underway, but the global pandemic has no doubt accelerated it. As Orr noted, it has created unexpected opportunities as many retailers explore new HCM software capabilities to better adapt to this changing world.
He went on to say, “not only is providing on-demand wages a competitive differentiator for employers today, it also sets them up well for the future as this becomes an expected feature in the overall workforce.”
This entails a significant shift in the payroll paradigm from batch weekly, semi-monthly or bi-weekly payroll processing to on-demand pay with real-time processing capabilities. Legacy technology simply will not be able to withstand that trend.
According to Orr, organizations of all types have taken the market volatility as a driver to accelerate modernization efforts. As they do so, a comprehensive HCM strategy that includes payroll agility, early wage access and real-time data can support business goals and drive recovery.
“Retailers found themselves with a need to do things within weeks and days – not months and years,” he said. “The pandemic was not a good thing, but if you try to make lemonade out of it, you could see a renewed vigor of entrepreneurship, creativity and evolution. The ones that were laggards or complacent found a new sense of urgency, and I’ve seen these retailers move really quickly. I hope that persists.”
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New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020
The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.
