The Josh Bersin Company: CHROs should urgently prioritize frontline workers to increase ROI

HR needs to urgently shift organizational thinking, while embracing the needs of frontline workers, as they contribute to more than 80% of the global workforce.

This is according to new research from The Josh Bersin Company and UKG, that found that although frontline workers are integral to customer experience and business performance, they are particularly hard to find, train, and retain.

To understand more about what HR leaders need to do to support frontline workers, UNLEASH spoke exclusively to Kathi Enderes, Global Industry Analyst and SVP Research, The Josh Bersin Company.

The gap in the workforce

Frontline workers represent 2.7 billion people across the globe, with 75% reporting burn out, and 51% feeling like a number not a person. Consequently, 59% see two distinct cultures – frontline workers and office employees.

Turnover among frontline workers in restaurants has reached 150%, with managers reporting overwhelm from administrative tasks, cumbersome paper processes, and the expectation to do more with less.

The ROI of getting it right is enormous,” Enderes explains. “Every 1% improvement in retention delivers a 100-fold improvement in cost and training savings.The ROI of getting it right is enormous,” Enderes explains. “Every 1% improvement in retention delivers a 100-fold improvement in cost and training savings.

“Companies on the Fortune 100 Best Places to Work list (many of them frontline companies) generate 8.5x more revenue per employee and outperform the market by nearly 4x.”

Enderes continues to highlight that Mexican grill restaurant Chipotle's AI recruiting reduced hiring time by 75%, enabling a new restaurant to open each day, while their stock performance grew. Additionally, vegetation management business Xylem Kendall saved $500,000 in one year reducing turnover by 5%.

She adds: “Better overtime management cuts labour costs by up to 5% while flexible scheduling improves retention by up to 10%. Financial performance, customer experience, and operational outcomes all directly relate to frontline strategies.”

The research also found that frontline-first organizations are leading the way, with companies like Costco, Wegmans, and NY Presbyterian structuring their organizations "from the frontline down.” This means that all managers and leaders support the frontline, rather than directing them.

What’s more, these companies offer above-average wages, while investing "heavily in frontline management development", and recognizing that "business outcomes depend on frontline performance.” As a result, they are achieving far higher engagement and retention rates, while also outperforming their peers.

The data also highlights a technology gap that needs to be addressed, as 7% of frontline companies have “excellent” employee data, compared to 20% of office companies.

What’s more, 1% of frontline companies have an AI strategy, compared to 8% of office companies.

“Fragmented systems force frontline workers to juggle multiple platforms just to check schedules and pay – the two things they need most and deprive leadership of critical insights needed to accomplish outcomes,” Enderes explains.

“Frontline-first, integrated HR technologies provide better insights for management, improve the employee experience, and provide better HR process management.”

How can HR retain frontline workers?

To close this gap, The Josh Bersin Company research suggests that CHROs should “urgently” prioritize their frontline workforce strategy.

This entails adopting “frontline-first” HR strategies, to increase valuable hires across engagement, retention, workforce development, recognition, scheduling, and pay.

Enderes comments that deploying a frontline-first approach can prioritize competitive wages, flexible scheduling, safe work environments, and meaningful career advancement opportunities, thus supporting the “unique needs” of the frontline worker.

To do so, HR leaders should “revise all talent and workforce management practices” around the requirements of this workforce segment.

She also highlights the importance of investing in frontline management development and culture. “Equip managers with targeted training, peer networks, and comprehensive tools for workforce planning, scheduling, and engagement,” she says.

Listen to frontline voices to understand their distinct needs and create a compelling workplace experience, creating a thriving frontline culture.”Listen to frontline voices to understand their distinct needs and create a compelling workplace experience, creating a thriving frontline culture.”

What’s more, by unifying payroll, scheduling, HR, talent, and workforce management, HR leaders will be able to better integrate frontline-first technology, data, and AI into a single frontline-first solution instead of fragmented point systems.

Enderes also advises that linking operational, people, and culture data can drive improved business outcomes, for example, connecting scheduling and turnover data will allow for targeted actions to boost retention by up to 10%.

“Leaders should implement conversational, voice-activated experience, intelligent scheduling, personalized coaching, and continuous feedback mechanisms designed specifically for frontline needs,” she concludes.

“Likewise, leaders should establish the ROI of frontline-first strategies, measuring and evaluating success, tying to operational and strategic success measures like financial performance, customer success, or labour cost management.”