The CEO of Myer has responded to allegations that new workforce policies could further damage the business.
Richard Umbers, CEO and MD of Myer, has fought back against claims that his new voluntary redundancy program will lead to a downward spiral of poor customer service and sales.
The introduction of voluntary redundancy in 42 stores and the reduction of part-time hours by 20% were actually designed to boost customer service levels by improving flexibility, Umbers told The Australian. The “re-engineering” of the company’s rosters aimed to decentralise its corporate structure and give store managers greater levels of control.
“What we are creating is the ability for a store manager to create a roster for their staff that responds to the peaks and troughs of demand. This is about a redistribution of the hours - this is actually to improve customer service,” he said.
Umbers was responding to critics such as Craig Woolford, analyst at Citigroup, who told the Sydney Morning Herald, “I'm sure the focus is on more flexibility around rostering and managing the peaks and troughs in customer traffic and demand. The danger of this approach is retailers are caught in a downward spiral – if sales are slow they'll tend to roster on less staff and if they roster less staff there's a chance sales will slow further as customers don't get the right level of service”.
Myer’s limited redundancy program was aimed at 42 stores where “the flexibility [that] the store manager has to create the right service experience isn’t great enough, so we are creating that for him by changing the mix of hours”. The program focuses on employees working at times where customer demand was not high enough, Umbers said. “This actually frees up the capacity for us to invest in new skills, new labour.”
Umbers also rejected claims that casual workers offer poorer customer service than full-time staff. “I’m not drawing a distinction between casual and permanent. What is important is we invest in our staff and train them, no matter what their contract of employment is,” he said. This aligns with the moves that Myer made earlier on in the year where it invested heavily in staff training. Despite some signs of success, Umbers felt he had to take things further and implemented his new flexible workforce strategy.
“It’s actually about having quality people, trained people, experienced people… It has nothing to do with the contract you’re on. It has everything to do with the kind of person you are, the kind of training that we give people … that determines whether or not you have a good experience on the shop floor.”
By relying on a more flexible workforce, Umbers hopes to cater to the changing attitudes and behaviours of the buying public. “They’re now shopping quite late into the evenings; they’re now shopping at weekends and on Sunday. They’re now shopping online and we need people who can [fill online orders] out of hours potentially or even during the working day.” At some of these times, Myer lacks the labour it needs, Umbers said, which is an issue that the new strategies hope to rectify in the future.
Umbers was appointed to the position of CEO in March at a time of crisis for Myer. “Some elements of the existing strategy represent solid retail fundamentals. However, overall [Myer] did not deliver a business model able to respond to this new retail environment and we have lost relevance with some customers,” Umbers said soon after his appointment. Voluntary redundancy, reduced hours – these changes are all part of a complete strategic review which is hoped to win back customers and return confidence to investors.