Labor Remains a Global Pain Point

NACS Convenience Summit Europe speakers shared creative ways to tackle this pressing problem. 

June 02, 2022

Convenience Summit Europe 2022

By Kim Stewart

BERLIN, Germany—This week in Berlin, the NACS Convenience Summit Europe is bringing together convenience retailers and supplier partners from across the globe to explore top-of-mind industry issues. Speakers pressed attendees to think creatively when it comes to facing today’s challenging labor environment.

“Every year we do a global survey of about 250 leaders from around the world,” Henry Armour, NACS president and CEO, said in the June 1 opening general session. “We ask them: What are the strategic issues in your company that you are really focused on?” Labor emerged as No. 1.

Most have heard of the pandemic-born term “Great Resignation”, and much has been written about how to turn it into the “Great Retention”. In the session The Future of Labor, Rebekah Duncalfe, director and senior music psychotherapist, Meraki Creative Therapies in the United Kingdom, cautioned business leaders to pay attention to the mental and physical wellbeing of their teams, noting a rise in suicides worldwide amid the pandemic.

Duncalfe outlined how Microsoft Japan set about changing its internal culture to redesign work around employee wellbeing. The company, for example, has moved away from communicating primarily via email to using more conversational digital tools—and encourages staff to connect with each other without using a screen.

The concepts of employee wellbeing and productivity don’t have to be at odds with each other, Duncalfe noted.

Good Jobs

Zeynep Ton, adjunct associate professor in operations management at the MIT Sloan School of Management and co-founder of the nonprofit Good Jobs Institute, discussed the importance of convenience retail jobs as good-paying jobs in her session on labor productivity.

U.S.-based convenience retailers may be familiar with NACS’ partnership with the Good Jobs Institute via the Good Jobs Strategy in addition to Ton and her colleague’s presentations at NACS thought leadership events like the NACS Show and NACS Leadership Forum.

There’s a lack of understanding at how important pay is,” Ton said, not only in enabling people to pay their bills and support their families but also in safeguarding their physical and psychological health.

As an employee, “When you are constantly thinking about money, what you get paid, when you get paid, you can’t focus on the job. You make a lot more mistakes,” Ton said. “You have attendance problems. You don’t move up in the organization.”

It’s a vicious cycle, Ton says, which can lead to instability in the larger organization via high turnover. In her research, she has found that “stores that have high turnover have more operational problems,” and “when you operate with high turnover, it’s very hard to differentiate yourself with customers,” Ton said. “There’s no friendly face to come back to.”

Ton argues for investing in front-line employees via higher wages, stable schedules, empowerment and training to help boost employee productivity and operational excellence.

Ton shared her research from U.S. convenience retailer QuikTrip, Costco, Trader Joe’s and Mercadona (Spain’s largest supermarket chain). “These companies invest heavily in their people,” Ton said.

At Oklahoma-based QuikTrip, which has implemented the Good Jobs Strategy, turnover is just 13% for full-time employees and 36% for part-time employees. This compares with an industry-wide full-time employee turnover rate of 119%, and a part-time employee turnover rate of 182%, according to the NACS State of the Industry Compensation Report of 2021 Data.

Leading With Heart

When it comes to keeping your employees on the job, Andrew Thornton says it’s mostly about “Heart in Business.” Thornton is founder of U.K.-based grocer, Thornton’s Budgens, which earned the 2019 NACS European Convenience Retail Sustainability Award. Thornton has since left his supermarket days behind to focus on writing and coaching.

Thornton shared from his just-released book, “Putting the Heart Back in Business,” that explores how a purpose-driven business can create a way of being that makes it safe for people to be more authentic and achieve extraordinary results, based on his experiences with Thornton’s Budgens.

With a nod to Ton’s presentation, Thornton agreed that good pay is part of the equation, but so is authentic leadership, which is modeled daily in a visible way by the leadership team.

A cornerstone of this is actively listening to employees to understand their needs and what they bring to their jobs. Create an environment of psychological safety. And offer coaching, as well as daily appreciation for employees who are “on the pitch and not in the stands,” he said. “It’s all about getting people to show up and being authentic,” which builds community.

It’s also about having a clear company purpose. At Thornton’s Budgens, “we are the community supermarket that really cares about people and planet. This purpose helped guide everything we did,” Thornton said.

Apprenticeships

Siobhan Grimes, head of retail, The Maxol Group, Ireland, shared how Maxol is transforming its business and addressing labor market challenges in Ireland in the session Labor Recruitment. Like other convenience retailers both on-stage and off-stage at NACS Convenience Summit Europe, Grimes said the pandemic has reshaped Maxol’s operations. Foot traffic, for instance, is still down, consumers are cautious, and dayparts have shifted.

In Maxol’s stores, “there are no queues at coffee machines at 6 a.m. anymore,” Grimes said. “Key business times have changed. We know we no longer need everyone first thing in the morning, prepping for the day.” The peak morning rush is between 8 and 9 a.m. The former swell of foot traffic starting at 11 a.m. for late-morning snacks hasn’t recovered. “Prepack sandwiches have dropped. Donuts have dropped,” she said.

“Our biggest challenge, though, is labor,” Grimes said. Since the pandemic, thousands of retail and shop workers left Ireland, and although new workers have come into the country, they are heading to manufacturing and health-care positions now instead of retail.

Maxol Group helps its franchisees advertise to recruit team members, touting flexibility of hours and targeting untapped sectors like students and retirees.

The company is participating in a government-supported apprenticeship program which has just graduated its first class. Apprentices in the two-year program get on-the-job training while studying part-time for a degree.

“We’re trying to embrace with all of our staff and everyone in the organization the great things about retail. We want more people to see retail as a career of choice,” Grimes said.

At day’s end, CSE attendees enjoyed a reception co-hosted by Lekkerland at Berlin’s Panoramapunkt Café. The summit continued today with an opening session on ESG. CSE will wrap up this evening with the NACS European Convenience Retail awards gala reception and post-gala reception, both co-hosted by NielsenIQ, and the gala and awards, sponsored by The Coca-Cola Company, Dover and Gilbarco Veeder-Root.

Look for more coverage of NACS Convenience Summit Europe in tomorrow’s NACS Daily and in the August issue of NACS Magazine.

Kim Stewart is editor-in-chief of NACS Magazine and editorial director of NACS. She can be reached at kstewart@convenience.org.

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