This article is written by Carl Michener, who introduces the equation of RFID and job creation, and if RFID has stolen jobs. The answer is: nope. It's still the same pie, but sliced differently. Rather than cutting jobs, retailers reallocate staff.
Back in 2010 the Editor of RFID Journal, Mark Roberti,
authored an article entitled RFID's Impact on Employment.
He wrote that "when you consider the history of the past 200 years,
what you see is massive improvements in economic efficiencies in
the developed world, and massive job creation."
Roberti was arguing that technological advances lead to job
gains rather than job losses and that RFID implementation from
factory to sales floor would be no different. Four years ago there
were many differing opinions on the matter, but RFID was much less
tested then than it is now. It's time to check in with industry
leaders and see if Roberti's hypothesis holds true.
The first opinion leader with whom we spoke was Pekka Riippi,
CEO at Nordic ID, a Finnish developer of barcode and RFID
readers. He likens what we are seeing today with RFID in
retail to the advent of the personal computer. "Before the PC, so
many functions in a business were much more laborious: keeping
track of finances, designing promotional materials, even generating
an invoice. But the wholesale adoption of the PC did not result in
widespread layoffs. People were simply reallocated to higher value
John-Pierre Kamel and Marshall Kay, principals at RFID Sherpas
based in Evanston, Illinois, tend to agree. They are involved on a
daily basis in planning and executing RFID deployments in the
retail sector. "In almost all the projects we are involved in where
we build the business case, there is repurposing but no layoffs,"
notes Kamel. "Even if counts become more efficient, managers are
going to reinvest that time back into doing them more often."
Bill Hardgrave, a professor at Auburn University, sees things
the same way but believes that it's too early to say for sure with
RFID in retail. "We haven't yet seen studies analyzing the impacts
on the labour side," he observes. "But anecdotally, we're seeing
employee redeployment to a value-added activity."
Hardgrave has found that using a mobile RFID reader reduces
inventory count times by an average of 96%. By itself, counting
inventory is not going to increase sales; it's one of those things
that you just need to do in order to know what you have and what
you're missing. Speed that process up and you can have employees
spend more time catering to customers' needs. But Hardgrave has
found that's not what happens. Timewise, the number of hours
invested in counts does not change much. "Retailers end up doing
those counts once a week rather than once every six months," he
explains. "The uptick in sales created by inventory accuracy is so
great that the cost of the labour involved is all but
In certain situations count times are not reduced with RFID, but
the quality of the count is improved. Instead of counting the total
number of boxes in the back room, with RFID you can spend the exact
same amount of time doing a serial count. Rather than simply
knowing how much inventory you have, you end up with definitive
knowledge of what your store is missing.
RFID a factor in employee satisfaction
Far from being a job killer, Kamel and Kay have found that
implementing RFID improves employee satisfaction and reduces
employee turnover. "RFID makes retail jobs easier to perform and
less mundane," explains Kay. "And when you can say without
hesitation that the SKU a customer is looking for is in stock and
where it's located, the customer is happy, you're happy, and your
job satisfaction rises." Employees who like their jobs better stay
longer, which means less hiring, less training… More knowledge,
better service and higher earnings. It's a simple equation.
And it's not just customer-facing tasks that employees more
satisfying. "It's about giving them tools that are relevant to all
of the work that they do, not simply when they are
customer-facing," says Kamel. Replenishing shelves on the sales
floor used to be tedious, painstaking and error-prone. With RFID
it's far less demanding. Instead of guessing at what needs to be
replenished, staff can concentrate on customers or spend time
keeping merchandise presentable.
Better online capability
Another thing that RFID affects is the relationship between Web
sales, staffing and cost savings. You don't need RFID to fulfil Web
sales in a Distribution Centre or in-store, but it does deliver the
inventory accuracy required to eliminate buffer stock, which can
amount to hundreds of thousands or millions of dollars in excess
inventory. It also tends to increase staffing.
Many smaller retail chains that fulfil online orders directly
from the store need more staff. A simple rule of thumb accounts for
this - the sales-to-staffing ratio. It's best explained with an
example: customers are very well attended to in Saks stores, but
not so well at discount retailers because employee allocation is
predicated on the value of sales. On that premise, retailers tend
to increase the number of staff on the floor at a store with a
lucrative online sales channel that the store fulfils. How stores
and head office share credit for online order fulfilment is another
The one thing that we know for sure is that allocation of sales
staff will be different for each retailer. A large department store
that has not implemented RFID will contract an outside firm to
count inventory storewide once or twice a year, at considerable
cost. But that cost is still less than that of implementing RFID,
or of hiring extra employees to perform regular counts.
Of the retailers that have cut staffing to the bone over the
past five to ten years, many have reached minimum numbers - they
have to have at least one or two people on the sales floor.
Implementing RFID would not change that; it would simply increase
the time they spend with customers.
Other retailers find value in well-staffed stores regardless of
their technological sophistication. Walk into an Apple store, where
dozens of items costing hundreds or thousands of dollars are sold
every hour, and there are scores of sales associates - despite the
fact that ubiquitous mobile POS (mPOS) payment, Near Field
Communication (NFC) payment (courtesy of Apple Pay) and other
technologies are used to great effect. It appears that
retail-focused technology has not changed the sales-to-staffing
ratio very much at all - there's just more money being made where
it has been implemented.
John-Pierre Kamel (picture missing)
and Marshall Kay (left) are Principals at RFID Sherpas LLC, a North
American consulting practice focused exclusively on the retail
Middle: Professor Bill Hardgrave is
Dean of Business at Auburn University in Alabama. He is a
prominent, published expert on RFID who often speaks on the
Right: Pekka Riippi is CEO of Nordic
ID, a leading manufacturer of handheld computers for fashion and
specialty retailers, based in Salo, Finland's Silicon Valley.