AI Isn’t Killing Jobs, Bad Schedules Are.

he Problem: Employee Turnover and the AI Narrative

Despite apparent stabilization in 2024, industry experts warn that by the end of 2025, retail industry turnover is expected to reach an all-time high due to massive layoffs, continued scheduling problems, and deteriorating working conditions.

Companies like JCPenney and Forever 21 closed hundreds of locations, while craft retailer Joann filed for bankruptcy twice and closed all remaining stores. Companies needed to lay off people to ensure profitability, however, few conducted a full analysis on the impact. Some companies created bigger problems for their long-term sustainability. The problem is that the physical work did not go away, instead it created an unintended breaking point. The workload and resulting schedules from the pressures to complete the work are making more and more retail workers quit. Job insecurity due to constant layoffs is driving workers to other industries.

In this nightmare scenario – there are many companies that are doing it right. They are listening to their customers and employees and rapidly adjusting to the new realities. The proof is in their business results. Companies like Walmart and Costco have made significant strides to ensure better employee experience and better schedules.

We are quick to blame AI and rising uncertainty about AI. Is AI going to help our store customers? Let’s not forget, brick and mortar still contributes over 80% of all retail sales.

AI Has Ways to Go

News headlines trumpet the rise of self-checkout machines, AI-powered inventory systems, and chatbots handling customer service, instilling unfounded fears that AI is about replace humans everywhere. Let me burst a bubble or two: there is no AI in retail today, let alone one that is capable of taking a retail store job. Listen to your customers they are telling you about the problem - “there is no one to help me – when there is, they know less than I do about your brand and your product!”.

The issue isn’t some imagined implementation of AI in retail – there is no AI implementation in stores that will require a decrease in workforce. AI can do a lot but it still cant go get the blue shirt in a size small from the stockroom or make the customer feel cared for by developing a relationship as a trusted advisor.

Retail corporate jobs - maybe, but retailers are not Tech companies, despite what Wall Street may think.

The Numbers Tell the Story

The retail industry turnover rate sits at approximately 60-75% for hourly workers, putting it among the highest of all industries - well above the national average of 47%.

These aren't just statistics - they represent a human cost. A recent study found that 82% of retail workers reported increased levels of stress and burnout, with 40% experiencing high turnover in their organizations. The situation has become so severe that the quit rate for retail workers is more than 70% higher than in other US industries.

The Scheduling Crisis Hidden in Plain Sight

While layoffs grab headlines, the real damage is happening in the day-to-day scheduling practices that have made retail work unsustainable for millions of Americans. Fifty-five percent of retail employees surveyed reported suffering burnout in the past year, with mental health issues and worker shortages cited as top causes.

The problems start with basic unpredictability. Consider the cascading effects of a perfect storm to disengage any employee: They are scheduled for a "clopen" (closing one night, opening the next morning) allowing no rest with just 5-6 hours between shifts, they are assigned a last-minute weekend shift making them miss their child’s school play or anniversary, their shifts and hours change weekly making it impossible to plan their lives. These scheduling practices create discontent not just with the job but with the brand. Employees facing sudden and unplanned scheduling practices are 50% more likely to quit their jobs compared to employees who have stable schedules.

Beyond Individual Suffering: The Business Case for Change

The issue isn’t the Workforce Management system. Most of these systems come with built in tools to create great schedules. The problem lies in business processes. The very processes created to improve profitability can be the ones causing all the issues because the underlying assumptions have changed.

Poor scheduling doesn't just hurt workers - it devastates business performance. High turnover rates can hinder success and excellent customer service, disrupt service quality, add expenses to a business's bottom line, and impact overall workplace morale.

The financial impact is staggering. The Work Institute found that the cost of every trained employee resignation is 33% of their base salary. For a retailer with 100 employees earning $30,000 annually, that's potentially $1 million in turnover costs alone. Then there is the loss of sales. Trained employees know the product and services, know the customer, know the internal business processes. All that goes out the proverbial shop window at the detriment of great customer service. In some businesses, customers become loyal to their trusted advisor and go with them to a competitor.

Additionally, most hiring managers believe that employee turnover places a heavy burden on remaining employees, potentially damaging engagement, and morale. This creates a vicious cycle where over-worked remaining staff become more likely to quit, accelerating the turnover spiral.

The AI Red Herring

While the industry obsesses over AI disruption, the data reveals a different truth. A recent survey found that while 38% of companies plan to replace workers with AI in 2025, nearly four in 10 companies said they are likely to have layoffs for other reasons, with half citing anticipated recession concerns.

The irony is profound: AI is not replacing store teams anytime soon. The math looks great on paper, but it doesn’t work. The focus should on accepting the reality that our robot overlords are not coming anytime soon. People-less stores have not yet worked. Until that day, we need people and people need good schedules. Let’s refocus our efforts - automation can actually help relieve burnout from worker shortages and increase productivity per worker, potentially allowing retailers to compensate employees proportionally and prevent the turnover.

How It Should Work

·         Predictable Scheduling: Fair scheduling builds trust and helps meet legal requirements. Posting schedules at least two weeks in advance gives employees time to plan their lives, which improves job satisfaction and reliability.

·         Employee Input: Involving employees in the scheduling process by soliciting their input and preferences increases employee satisfaction and fosters a sense of ownership and accountability.

·         Work-Life Balance: Employers need to increasingly prioritize flexible, employee-centered scheduling to support worker well-being and work-life balance.

·         AI-Driven WFM Systems: Modern scheduling software can eliminate many common problems. Retailers using performance-based schedules see an increase in profitability per employee of up to 6% and an increase in customer satisfaction scores of up to 13%.

·         Business Processes: Operational Excellence and Workforce Management go hand in hand. Properly implemented WFM and Operational Excellence can not only create better work environments but also directly impact both Conversion% and basket size leading to higher sales.

The Path Forward

The companies that will thrive in this new retail landscape are those that recognize Workforce Management and scheduling as a strategic business advantage, not an administrative afterthought.

The business case is clear. Focus on your customers and your employees. Focus on employee schedules using modern WFM tools. AI has a long way to go before it can replace store teams. Use AI instead to help your store teams succeed.