How AI Can Help Battle the Ongoing Labor Shortage
Labor shortage looms large. Can AI help?
The Great Resignation has contributed to the labor shortage that has had an impact on every business – especially those with a large hourly workforce. And as companies look for solutions, including new ways to attract and retain talent, employees continue to re-evaluate their priorities for what they value in their jobs, says Kshitij Dayal, SVP of engineering and operations at Legion.
Large organizations like Walmart and Target are hiking salaries to attract hourly workers. However, with so many companies now offering sign-on bonuses and record pay packages, employers looking to compete in a tight labor market need to find a new way to win over employees. AI-powered workforce management and demand forecasting may be the solution.
Demand Forecasting with AI-derived Insights
Every brick-and-mortar business experiences periods of peak and low workforce demand. From holidays to weather events, throughout the day, week, and month, many factors influence the ebbs and flows of a business. However, without the right tools to properly predict demand, managers are unable to create optimal labor plans and employee schedules, unsure of how many employees should work on a certain day or at a certain time. Scheduling too many people will lead to overspending on labor, and scheduling too few will ensure missed revenue-generating opportunities, as employees’ productivity may be hindered while trying to meet customer demand.
For example, a slow day in a restaurant with too many employees creates business losses, while a busy day with too few workers can cause the business to lose out on revenue since they cannot seat and serve as many people due to not having the appropriate number of servers or chefs. In addition, inefficient scheduling practices can create disgruntled and dissatisfied employees as they feel overworked when there are staffing shortages.
Workforce management platforms that incorporate AI-powered demand forecasting capabilities can help solve these problems. They leverage machine learning algorithms to analyze key data points and demand drivers (e.g., daily weather, local events, etc.), looking for patterns and market trends. Then, predictive analytics models use this information to provide insights into customer behaviors to help determine where demand is likely to come from and what the best employee schedule will be. By harnessing the power of AI for demand forecasting, employers can create highly accurate schedules that enable them to optimize their labor efficiency. In addition, they can more easily match their business needs with employee skills and preferences, which creates a better employee experience.
See More: 4 Ways Emerging Workplace Tech Can Ease Perceived Labor Shortage
Build Schedule Agility into Workforce Management
In today’s highly-competitive labor market, employers also need to offer schedule flexibility, especially since 85% of hourly workers believe it’s important to have more control over their schedules. However, managers who still use traditional, manual methods of creating work schedules (e.g., spreadsheets or even “pen and paper”) are at risk of building inefficient schedules, as well as wasting time that can be spent on higher-value activities, such as working with customers and providing constructive and positive feedback to their employees.
AI-powered workforce management solutions can automate the entire scheduling process, enabling managers to easily and efficiently generate schedules that adhere to local labor laws (e.g., meal and rest breaks) while also meeting employee preferences. These intelligent scheduling solutions also allow employees to easily request time off, swap shifts, and even pick up extra shifts – often with a single click in a mobile app – creating a better overall experience for all employees as they are able to define when, how much, and where they want to work. A mobile platform is essential for Millennial and Gen Z workers in particular since they expect every aspect of their life to be online, efficient, and personalized to suit their needs.
An intelligent workforce management platform also allows the company to optimize its workforce by sharing employees across multiple locations. This not only provides the company with additional workers who know the inner workings of company procedures but also gives workers the ability to pick up extra shifts that might not have been previously available to them.
Mitigating Supply Chain Disruption
Even now, more than two years after the pandemic started, supply chain disruptions continue to be a pain point in every industry, as companies catch up to meet the demand for items, causing delays and driving up prices. While the current employment trends aren’t the only cause of the supply chain situation, they have had a significant impact, with industries such as manufacturing, transportation, warehousing, and utilities seeing high quit rates last year. Companies are having to do more with fewer resources from both an inventory and employee perspective.
Smart workforce management solutions can help with supply chain uncertainty by enabling distribution centers to operate more efficiently. For example, through the use of AI and ML, companies can analyze thousands of data points that can impact workforce needs (e.g., delivery days, weather events, etc.) so they can make better, more informed scheduling decisions. In addition, it creates staffing guidance based on demand, labor standards, business policies, and budget constraints to create the optimal labor plan. This allows distribution center operators to formulate long-range staffing plans with fixed and flexible schedules.
Fostering a Positive Work Environment
If there is anything to learn from the Great Resignation, it’s that no company is exempt from the labor shortage and training challenges presented during this time. Instead of sitting around and offering the same benefits and pay that workers no longer see value in, companies have taken this time to reflect on what employees actually want in a job and from an employer, whether that is more recognition, higher pay, or greater schedule flexibility.
By offering benefits that better align with employees’ wants and needs, organizations are demonstrating that they truly care about their people as more than just a number. This creates a better culture and future-proofs the business, decreasing the chances of employees leaving the company.
Every competitive advantage matters as companies continue to look for new ways to attract and retain hourly employees. AI-powered workforce management is a game-changer, providing employers with an easy way to optimize their labor efficiency while improving their employee experience simultaneously.
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MORE ON LABOR SHORTAGE:
- How APIs Help Leaders Navigate the Labor Shortage
- How Automation Helps Small Businesses Offset Labor Shortage Challenges
- 4 Ways Pairing Lean Manufacturing with Automation Can Mitigate Labor Shortages
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