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The retail industry is a dynamic industry that is seldom static.  Retailers are focused on their bottom line, and many overlook the importance of establishing and maintaining an effective absence management strategy. The retail workforce is extremely diverse, with demographics that reflect the varying ages of employees in this sector, from students, to working parents, retirees, and everywhere in between. There are significant schedule variances and turnover rates, and often retail employers have locations spread across the country with varying operational processes.

With new competitors entering the market constantly, retailers want to remain ahead of the curve. Even during the current pandemic, retailers continue to fight to remain competitive, offering curbside pickup options and online ordering, increasing demand and expectations from frontline staff.

Why Is Absence Management So Challenging in Retail?

Employee absenteeism is a significant problem for most organizations, but seems to strike particularly hard in the retail industry. Many retail organizations underestimate the overall cost impact of employee absenteeism. Although lower average wage rates contribute to a smaller individual financial impact from employee absences than are found in other industries, failing to adequately manage those absences will rapidly accumulate both direct and indirect costs.

In retail organizations, store or operations managers are typically responsible for the management and return-to-work planning of all types of absences: workplace injury, personal injury/personal leave, and ‘regular’ absences (e.g., sick calls, childcare challenges, etc.). Often, these individuals do not have a background in absence management and have multiple competing priorities, which impacts the efficiency of any return-to-work strategy.

Most organizations have an internal reporting mechanism that tells the financial story of their current absence management program; however, this reporting often stops short of the locational manager. That lack of inclusion during reporting and annual budgeting/planning is a gap that must be revised to ensure sufficient organizational alignment & oversight into the absence management program. All levels of the business should know and understand the cost impact of absences, or else risks cannot be identified, and opportunities cannot be realized.

Absences impact more staff members than just the employee taking leave and their manager. Unexpected staffing shortages often result in an increased workload for other employees, especially during peak seasons, which can undermine collaboration and drive fatigue and resentment. Additionally, interpersonal conflict or challenging work environments can have a domino effect and cause additional employee absences. Most notably, employees who become “frequent flyers”, reporting absences multiple times per year, can negatively impact employee morale, creating poor working relationships, and contribute to a working culture where an increasing number of employees request unnecessary absences.

Compensation and total rewards play a big role in absence management, as unexpected absences can be financially devastating for some employees. Entry-level earners often live pay cheque to pay cheque, and so the monetary impact felt by the employee during their absence is enhanced. Additionally, as most front-end retail employees are not eligible to participate in a Group Benefits Program, there is a fundamental risk of inflated absence frequencies in order to exploit a benefit that the employee would not typically have access to. Lack of incentive or other performance bonus could also have an impact on the employee’s motivation to return to work or participate in a modified work program.  Lastly, the variability in employee scheduling poses significant return-to-work and treatment challenges because variable-hour employees are typically committed elsewhere during their non-scheduled time, which leads to delays and gaps in return-to-work planning and their ability to attend treatment. These commitments can include concurrent employment, an academic timetable, and familial commitments (e.g., childcare), not to mention the employee’s work-life balance.

Opportunities for Retailers

Although the retail industry has unique challenges, there are a lot of opportunities for retailers to capitalize on with their absence management programs:

  1. Dedicated, specialized absence management resources
    • Having a dedicated team or department provides a consistent approach to absence management strategies that are aligned with corporate objectives and will allow for the proactive identification of risks or opportunities. Specialized resources aligned with the absence management program can significantly decrease the administrative burden on managers, thus allowing them to focus on their priorities. This approach also allows the employer to establish a clear line of sight to the costs and impacts of absences, encouraging a system that addresses problems proactively instead of reactively. They also will have an accurate understanding of the governing system and the ability to challenge claims as necessary to eliminate unwarranted claim costs.
  2. Effective manager training
    • With managers typically having little to no experience with absence management, it is essential to provide them with adequate training on all core aspects of the absence program. While dedicated resources can manage the claims process, manager involvement is unavoidable throughout the life of a claim. Providing specialized training on injury reporting, return-to-work processes, mental health management, and any other area with manager involvement establishes buy-in from the locational managers and fosters a collaborative environment focused on proactive absence management.
  3. KPI analysis and distribution
    • Key Performance Indicators are essential not only at a corporate level, but also at a site level. Sharing KPIs allows managers to measure their location’s performance, and benchmark it against other locations. Establishing benchmarks for location performance increases awareness and accountability for the absence programs, and allows for the identification and implementation of targeted prevention initiatives in underperforming locations.
  4. Optimized absence management technology
    • Often retailers have little to no technology available to accurately track and manage absences, which leads to errors, inconsistencies, and missed opportunities for cost reduction. Housing all absence data in one optimized platform ensures consistency and efficient access to information, which provides a clear picture of trends, frequencies, and aggregate data. Reporting and statistics within the absence platform can be used to develop KPIs to be shared within the organization (scope-appropriate) on a regular cadence.
  5. Enhanced return-to-work program
    • Absence management is opportunity driven, and retailers have a mass opportunity to accommodate employees with restrictions. Retail environments are composed of a vast array of roles requiring varying degrees of functionality, from sedentary to heavy, and everywhere in between. Retail employers have the unique opportunity to be able to accommodate almost any restriction, including reduced hours when needed. Modified work options should be identified and offered in writing as soon as any injury is reported. Offers can always be adjusted as additional functional abilities information is received; but ensuring modified work is offered immediately is critical to minimize the cost impact.

How Can Absence Management Help Retailers Increase the Bottom Line?

While static factors make the retailer landscape challenging, there are variable factors that provide opportunities for cost reductions, enhanced efficiencies, and increased productivity. Many retailers do not seek out help until their absence programs are in a critical state. Absence management needs to be a priority for organizations, keeping processes up to date and optimized in order to realize the financial benefits.

 

Information provided on this blog is intended for general educational use. It is not intended to provide legal advice. ReedGroup does not provide legal services. Consult an attorney for legal advice on this or any other topic.