Reprioritizing The Employee Experience In Consumer-goods And Retail Companies

by Laura R
Reprioritizing The Employee Experience In Consumer-goods And Retail Companies

The consumer sector, which includes both retailers and consumer-packaged goods manufacturers, has faced significant disruptions during the COVID-19 pandemic. These challenges have continued even as businesses have gradually reopened. In addition to severe financial and operational impacts, companies in this sector have struggled with high levels of employee burnout. According to McKinsey’s 2020 Women in the Workplace report, conducted in partnership with LeanIn.Org, 34% of employees in consumer-goods and retail companies reported feeling burned out during the peak of the pandemic, compared to 28% of employees in other industries. This issue was particularly pronounced among women, who often bear a heavier caregiving burden at home. In fact, 37% of women in the consumer sector reported burnout, compared to 30% of women in other industries.

At the same time, many companies in this sector were more likely than their counterparts in other industries to pause or scale back their diversity and inclusion (D&I) initiatives despite the well-established benefits of such programs in attracting and retaining talent. The Women in the Workplace study revealed that half of the consumer-goods and retail companies surveyed had reduced some aspect of their D&I efforts during the pandemic—a significantly higher rate than in other sectors. This combination of increased burnout, particularly among women, and the suspension of diversity initiatives has placed consumer-goods and retail companies at greater risk of losing diverse talent, even though the business case for diversity has only grown stronger in the wake of the pandemic.

This article draws on previously unpublished data from the McKinsey report to examine employees’ recent experiences in the consumer sector and suggests strategies that companies can use to reinvigorate their D&I programs. Key actions include resetting workplace norms around flexibility, empowering managers to prioritize employee well-being, addressing biases in promotion processes, and implementing formal programs to cultivate diverse talent. By revitalizing their D&I initiatives, consumer goods and retail companies can not only support the well-being of female employees but also improve the overall work environment for all employees.

Disruption in the consumer sector

Consumer goods and retail companies have faced significant stress due to recent disruptions, from global supply chain challenges to sudden IT demands. While many brick-and-mortar stores that closed in 2020 have cautiously reopened, consumer behavior has shifted, and organizations have had to adapt quickly to these changes.

Our Women in the Workplace research shows that employee stress levels are exceptionally high in the consumer-goods and retail sectors, exceeding the averages seen across other industries. In addition to experiencing higher burnout rates, employees in these sectors were 30% more likely than those in other industries to feel that they were always expected to be available—whether for calls, emails, or meetings—around the clock.

Moreover, they were nearly three times more likely to report that they were considering leaving the workforce or downshifting their careers due to burnout. However, this trend is particularly pronounced among women: one in four women in the sector were considering leaving or scaling back their careers, compared to one in five men. Among women contemplating departure, Black women were 38% more likely than the broader female population to consider taking a leave of absence or leaving the workforce entirely.

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Consumer goods and retail companies are acutely aware of the risks associated with burnout and potential employee turnover. According to our research, 12% of companies in this sector expressed being “very or extremely concerned” about a potential decrease in the number of women at their organizations due to the pandemic, compared to just 8% of companies in all industries. Additionally, 20% of consumer-goods and retail companies reported being “very or extremely concerned” about losing employees of color, compared with only 9% of companies across all sectors.

This latter concern is especially critical, given the strong business case for diversity and inclusion. McKinsey’s 2020 Diversity Wins report highlights that companies with diverse leadership—both in terms of gender and ethnicity—are more likely to outperform their peers financially. In 2019, for example, companies in the top quartile for gender diversity on executive teams were 25% more likely to outperform their peers financially. Similarly, those in the top quartile for ethnic diversity were 36% more likely to outperform their competitors.

Diverse teams are better positioned to anticipate customer trends, make more informed decisions, and drive innovation—all crucial skills for companies navigating the post-pandemic recovery. For consumer-goods and retail companies, ensuring a diverse workforce that reflects and understands the needs of their customers is essential for effective product development and marketing. Therefore, refocusing on diversity and inclusion is not just an ethical imperative but a strategic business necessity.

Getting back into development mode

The stress facing consumer-goods and retail companies, measured in terms of operations, finances, and employee well-being, remains significant even as organizations shift from crisis mode to recovery. Despite these ongoing pressures, there are low-cost, high-impact actions that companies can take to address the acute challenges employees—particularly women and employees of color—face. These actions can also help nurture a pipeline of diverse talent. Whether restarting paused initiatives, intensifying efforts that were delayed, or launching entirely new programs, leaders in consumer-goods and retail companies should consider prioritizing the following four areas:

1. Reset Workplace Norms to Ensure Flexibility and Account for Seasonal Demands

To mitigate employee burnout, consumer-goods and retail companies should reset workplace norms and embed greater flexibility into their operations. Our research shows that women who feel their companies provide the flexibility they need are 60% less likely to consider leaving the workforce or downshifting their careers. As a result, leaders must clearly communicate their support for flexibility and model this support, as employees may fear stigma surrounding flexible or remote work options. In this sector, flexibility could involve reconsidering work schedules to accommodate seasonal demands or shifts in the market. Companies can also reset expectations by designating specific hours for meetings and removing the expectation of immediate email responses after business hours, helping to create clearer boundaries for work-life balance.

2. Empower Managers to Prioritize Employee Well-Being, Especially During Stressful Periods

Managers play a crucial role in shaping the employee experience, particularly during times of high stress, such as those caused by business disruptions. Our research indicates that women in the consumer sector who feel supported by their managers are 70% more likely to report job satisfaction, 3.5 times more likely to feel they have equal opportunities for advancement, and 50% less likely to consider leaving or downshifting their careers. To improve employee well-being, senior leadership should empower managers to prioritize well-being, providing them with the flexibility and resources to do so. Managers should be trained to recognize the signs of burnout and equipped with practical tools to address workloads and stressors. In particular, with the shift to remote work, managers must be trained in virtual team leadership and adjust their communication styles for both in-person and online interactions to foster better support.

3. Build Formal Programs to Develop Diverse Talent, Despite Competing Priorities

Now more than ever, consumer-goods and retail companies must provide structured programs, such as mentorship and leadership development initiatives, to support women in their professional growth—especially as they balance the demands of work and home. However, one-size-fits-all solutions are unlikely to be effective. Companies should assess their talent pipelines to identify where significant drop-offs occur and tailor their development programs accordingly. For example, if there is a “broken rung”—a notable drop-off of women after their first promotion from entry-level to managerial roles—focused programs designed to develop high-potential women at this stage can have a significant impact.

By addressing these key areas, consumer-goods and retail companies can better support their employees, particularly those from underrepresented groups, and foster a diverse talent pipeline that is crucial for long-term success. In doing so, they can also improve employee retention, job satisfaction, and business outcomes—particularly in a post-pandemic landscape.

Frequently Asked Questions

Why is it essential to reprioritize the employee experience in consumer goods and retail companies right now?

Consumer goods and retail companies are recovering from pandemic-related disruptions and facing ongoing challenges like burnout. Prioritizing the employee experience is critical for improving retention, engagement, and performance, especially for women and employees of color.

What are the most effective low-cost, high-impact actions to improve the employee experience?

Key actions include resetting workplace norms to provide more flexibility and empowering managers to support employee well-being. Reinvigorating diversity and inclusion initiatives and implementing tailored mentorship programs can also drive significant impact with minimal cost.

How can companies ensure greater flexibility for employees without sacrificing business goals?

Companies can offer flexible hours and remote work options while setting clear expectations for availability during peak times. This ensures employees have a better work-life balance without sacrificing productivity, especially during seasonal demands.

How can managers effectively support employee well-being during stressful times?

Managers should receive training to recognize signs of burnout and prioritize well-being in their teams. Providing clear guidelines on workload management and offering flexibility in communication can help mitigate stress during high-pressure periods.

How can consumer goods and retail companies build diverse talent pipelines while managing competing priorities?

Companies should tailor mentorship and development programs to address specific gaps, such as the “broken rung” in leadership. By offering structured programs to support women, especially at critical stages in their careers, companies can better develop diverse talent.

What role does leadership play in creating a supportive employee experience?

Leadership is key in setting the tone for workplace culture and policies. Senior leaders should model flexibility, prioritize well-being, and champion diversity and inclusion, making these priorities visible throughout the organization.

What impact does improving the employee experience have on company performance?

Improving the employee experience directly contributes to better engagement, productivity, and retention. Companies that prioritize well-being and diversity are more likely to outperform competitors and foster a positive work environment.

How can consumer goods and retail companies measure the success of their employee experience initiatives?

Companies can measure success through employee surveys, retention rates, and engagement metrics. Tracking diversity goals and monitoring the impact of well-being initiatives can also help assess long-term effectiveness.

Conclusion

Reprioritizing the employee experience in consumer goods and retail companies is essential for navigating the challenges of post-pandemic recovery. By focusing on flexibility, employee well-being, and diversity and inclusion, companies can address critical issues like burnout and turnover, particularly among women and employees of color. Strategic initiatives, such as empowering managers, building diverse talent pipelines, and resetting workplace norms, will not only improve employee satisfaction but also drive long-term business success. As these companies adapt to new market dynamics, a committed focus on the employee experience will ensure they remain resilient, innovative, and competitive in an increasingly complex business environment.

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