Mastering seasonality

October 2, 2019 Ami Price-Gagnon No Comments

‘Tis the season for casual workers

Workforce planners in retail need to consider seasons for both shoppers and workers

How to choose when to hire, and how many to hire

We’re all familiar with the classic Christmas story. Santa, prawns, Die Hard. Some traditions will stay strong, but some things are also changing.

Workforce planning for the holiday season is becoming more complex as both job seeker behaviours and consumer buying behaviours change. However, as organisations get better at using data there’s a greater opportunity for confidence in the hiring plan. It’s September and I’m sure you’re making your list, and could use some support for checking it twice. The quick guide below will help you cover the bases for your workforce planning this year.

In summary we’ll look at:

  1. How many people you’ll need
  2. When those people are looking for work
  3. Reliability considerations

 

How many people you’ll need

While the sound of Christmas carols is usually accompanied by the beautiful ringing of cash registers, general agreement is that the drastic increase of demand in December is lessening:

  • December in-store sales YoY are in decline due to online shopping and the overall market (AFR)
  • The new retail calendar that shows demand spreading more evenly over the calendar year (specific dates for 2019/20 can be found here)
  • Trading economics is showing that overall sales drop from November to December

Unfortunately, most of the conversation is about total sales (in store and online), so the summarised numbers aren’t helpful for understanding your front-line employee needs. I have the advantage of working with data sets of historic and forecasted in-store sales, which I’ve explored to identify trends, but there’s been little consistency between businesses. For example, consider the two large retail stores below, both located in a large shopping centre:

We can see that both locations have an increase in sales in December, but at very different magnitudes. Business A has a sales increase of 75% from the average of other months, while business B has an increase of only 20% from other peak times, or 50% from other slow times. This means that Business B has shifted further towards the ‘new retail calendar’ mentioned earlier, where demand is more spread throughout the year using sales and events tactics. For these businesses seasonality analysis will become more important as an ongoing activity instead of just in preparation for the December holidays.

Here are some tips for what to look for and think about when calculating your anticipated demand increase:

  • While there was variation from business to business, we noticed a general trend between industries:
    • The December increase was lowest in Hospitality businesses, with sales only increasing about 15-20% above average
    • Retail had a medium impact, with sales increasing 30-100% above average in December
    • Specialist/niche/logistics business had the greatest potential to have >300% increase in December if they had an obvious connection to December trends, such as deliveries, holidays, or barbeques (or Bruce Willis)
  • Analyse your own historic sales for forecasting. I have a few general tips on forecasting (blog post coming soon), but a simple analysis of year-on-year % change by month would be a helpful start.
  • After looking at your quantitative analysis, make sure to do a qualitative overlay. Ask yourself:
    • Have you made changes to your brick & mortar experience to attract gift-buyers in-store vs online?
    • Do you have a product with a strong correlation between in-store visits and online sales?
    • Have you participated in more November sales events than usual, such as China’s ‘Singles Day’, the largest revenue-generating day in the world?

As buyer behaviours continue to evolve, workforce planners will have to stay in touch with the market to understand this qualitative overlay.

 

The labour market

December (and arguably November) hold all of the holiday action, but September is the peak of holiday preparation. In fact, most of the job postings for holiday work are already live in September, according to Indeed:

Staying on top of early hiring is helpful for two key reasons:

  • Having time to offer an onboarding ramp-up to train casuals well
  • Getting to the good ones first. As per Indeed (image below), job seekers are catching on that they should start their holiday job hunt earlier and earlier:

As per the first section of this blog post, shoppers need a reason to be in-store instead of online, and customer service is an advantage that front-line employees can deliver if selected and trained appropriately. Digital learning tools are making training more efficient and engaging, and the benefits to your business may extend beyond December: as the ‘new retail calendar’ starts to smooth out, you may want to reach out to these casuals again for winter sales peaks as well.

 

Reliability considerations

Finally, the last consideration is looking at your casual pool reliability. To illustrate, let’s use the example of a parcel delivery facility. Their shift-filling process would look something like this:

 

If you are dealing with a particularly large number of shifts, or if you know that your Y% is particularly high or X% and Z% are particularly low, you may consider hiring ‘buffer’ casual staff. If you use workforce management software (like Ento), it should be simple to pull the data on historic casual pool reliability to understand how much of a buffer you’ll need.

 

Summary

Overall, the quick version of this quick guide is to use your historic sales and rostering data, overlay your strategic changes as your business grows, and hire casuals early. Of course, every business is unique, so if you’d like to think out loud over a cup of eggnog you know how to reach me.

Happy holiday preparation,

Ami
ami@ento.com

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