Technology as a Solution to Staff Shortages in Retail, Logistics and Hospitality

The impact of Staff Shortages and how Technology Helps

Retail stores, hotels, restaurants, leisure venues, and logistics companies around the world are struggling with workforce shortages.

As discussed by Deloitte, by the end of the decade, working age populations in the EU are set to decrease by 12 million and in the eurozone, by 8 million. What’s more, 80% of EU companies have reported huge difficulties in recruiting skilled workers, especially in retail and automotive industries.

Hospitality and leisure businesses face similar hurdles, on top of the notorious churn rates. Logistics companies are not spared either, especially when it comes to finding drivers.

These shortfalls put significant strain on day-to-day operations, erode customer experience, and threaten organizational success. This article explores how technology – specifically workforce management software combined with on-demand staffing platforms – offers a promising solution to tackle workforce shortages.

The Far-Reaching Impact of Workforce Shortages

Recent Data

What can recent data tell us about the situation in different industries? Here are a few points.

Retail

According to Deloitte’s 2024 research into retail trends, 80% of leading retail companies are making moderate or major investments in hiring, retention, and preparing their workforce for the future. However, 62% of survey respondents expect intensified competition for skilled and qualified talent.

Hospitality

According to data published by Statista in November 2024, job vacancy rates in the EU have increased across many sectors, with hospitality seeing the biggest deficit. 10-20% of positions in the accommodation sector specifically remained unfilled, and this was due to a lack of skilled applicants. Existing employees also had lower-than-average qualifications, especially in Spain where 16% of workers under 25 only had primary education.

The shortage of waiters is also notable, significantly impacting operations in the peak of the summer season of 2024. Croatia has been particularly affected.

According to the 2023 EURES report on shortages and surpluses, as discussed by Schengen News, other countries facing the worst shortages are: Belgium, Bulgaria, Cyprus, Germany, Denmark, Greece, Finland, France, Italy, Luxembourg, Malta, the Netherlands, Norway, Portugal, Romania, Slovenia and Slovakia.

Logistics

An article published by Euronews last week discusses how the European Commission has identified 42 occupations experiencing shortages, which include transport. They also emphasize the mismatch between qualifications and the needs of employers.

The European transportation and logistics industry is actually forecast to see conservative growth in 2025 (2.0%); however, unfilled driver positions are predicted to exceed 60% by 2026.

Impacts

Of course, workforce shortages disrupt nearly every aspect of a service-oriented business. Employees on duty must handle multiple roles, stretching themselves thin to cover absent colleagues. They may have to work longer hours, leading to fatigue and decreased productivity​.

In logistics, too few warehouse pickers or drivers means workflow bottlenecks and delayed order fulfilment. Understaffing in retail has been linked to lost sales, as customers walk out rather than wait.

A lack of workers translates to unmet customer needs, harming satisfaction scores and a brand’s reputation. Ultimately, the bottom line suffers.

Businesses facing labor shortages may have to reduce operating hours or limit offerings, directly cutting into revenue. But there are other cost implications – higher labor costs while trying to combat shortages, such as paying overtime or spending more on recruitment and training new hires.

Fortunately, technology solutions can address these challenges. Primarily, we’re referring to advanced workforce management systems and on-demand staffing platforms that, together, improve how companies schedule and source their labor.

Workforce Management Software: Smarter Scheduling and Forecasting

Workforce management tools provide more than basic functions like managing employee availability, time and attendance tracking, absence management and administrative tasks.

The best solutions optimize how an organization deploys its staff. They ensure the right people are in the right place at the right time to meet customer demand, through features like demand forecasting and intelligent scheduling.

As well as these advanced dynamic workforce management features, there are integrations to take things further.

Integrating Workforce Planning Software with On-Demand Staffing Platforms

Solving workforce shortages doesn’t end with internal scheduling. An equally important innovation is on-demand staffing platforms; essentially, freelance worker marketplaces for shift-based work. These platforms maintain large networks of pre-vetted, qualified workers that are available at short notice.

Integrating your enterprise workforce management software with these platforms means you can quickly find external professionals to cover staffing gaps and avoid costly overtime expenses. We recently announced our partnership with such a platform, Temper.

How a Retail Store Could Benefit

Imagine this scenario. A retail store is entering the winter holiday season, its busiest time of year, but has been unable to hire the number of seasonal employees it normally would. The store forecasts a 40% increase in foot traffic on weekends and identifies critical gaps in coverage for checkouts and stock management teams.

The open shifts are posted to an integrated freelance platform. Within hours, a team of temporary workers is scheduled: extra cashiers for peak hours and additional inventory staff for nights, for example.

Throughout the season, the workforce management system tracks sales and foot traffic in real time; if an even bigger rush materializes on a particular day, management can request on-demand reinforcements. Shoppers end up enjoying quick checkouts and well-stocked shelves, and the store captures record sales without overworking core staff.

Fitting Into Existing Employee Scheduling and Payroll Workflows

Freelance workers’ attendance data is logged through the same WFM system as regular staff. MANUS WFM has always been flexible in terms of managing agency and temporary workers – and with freelancers, there’s no exception. Our time evaluation engine provides payroll information to your payroll management system – so, you don’t need to set up any new processes to manage freelancers’ pay.

Finding Quality Freelancers

The quality of workers sourced via these platforms is maintained through vetting and rating systems. Businesses can set requirements (such as certifications or experience level), and the platform will match workers accordingly.

Some companies find that freelancers are as competent as their regular employees and may eventually hire the best temps full-time, which of course, reduces hiring costs. Either way, once you’ve hired them once, you’ll add to your pool of freelance talent – so it will be successively quicker to fill shifts each time.

Integrating MANUS WFM with Temper

As mentioned, MANUS WFM can now be integrated with Temper. Founded in the Netherlands, the platform serves more than 800 European cities, connecting vetted freelancers with shifts at a moment’s notice. Thousands of skilled professionals are connected with thousands of shifts each day through Temper. They cater to 43 job types across seven sectors and also provide pricing insights for roles and locations.

More Benefits of a Tech-Driven Approach to Workforce Management

Combining a workforce management solution with on-demand staffing offers long-term benefits that improve overall operations.

More Flexibility

This strategy gives businesses an unprecedented ability to scale their workforce up or down as needed; companies are no longer rigidly limited by the number of full-time staff employed.

If demand surges or unexpected absences occur, managers can quickly tap into a broader talent pool to fill the gap. During slower times they can scale back, avoiding unnecessary labor costs. This lets businesses respond in real time to market conditions.

Cost Savings & Boosted Revenue

Hiring temporary or freelance staff is often far more cost-effective than the alternatives (such as chronic overtime for salaried staff, recruitment of full-time employees with benefits, or lost sales due to suboptimal capacity). And a comprehensive workforce management solution itself directly cuts labor costs by optimizing schedules.

What’s more, better customer service from proper staffing can lead to higher sales and repeat business, boosting revenue.

Ultimately, a tech-driven workforce strategy helps you to do more with less budget, improving workforce productivity. It turns labor management into a competitive advantage rather than a cost drain.

Better Employee Engagement and Retention

With optimized scheduling, full-time staff won’t be consistently overworked or subject to chaotic last-minute shift changes. Instead, their schedules become more stable. This helps prevent burnout – and when they see that you’re proactively addressing understaffing (instead of just asking them to do more), it builds goodwill.

If employees also have access to scheduling apps via their mobile devices, they gain a sense of control and transparency that traditional scheduling lacks.

Conclusion

Today’s workforce shortages are a challenge that can’t be solved with traditional hiring alone. However, as we’ve explored, technology provides powerful options for mitigating labor gaps.

Using advanced workforce management software for smarter scheduling – and pairing it with on-demand staffing platforms that supply vetted workers at a moment’s notice – lets companies manage labor shortages with ease. This provides the flexibility to quickly respond to demand surges and other changes in real-time, ensuring consistent, high-quality customer service. Ultimately, it converts scheduling processes into a competitive advantage.

To learn more about integrating Temper with MANUS WFM, contact us today.