Eoin Houlihan, VP EMEA at Legion Technologies, discusses how AI and intelligent automation can transform retail workforce management, to deliver not only the efficiencies needed to help retailers mitigate against the ‘Budget burden’ of rising costs, but also in creating an engaged, motivated and resilient workforce for the future.
As inflation drives up costs, National Insurance Contributions (NICs) increases bite into profit margins and a generation of workers demand more flexibility and financial security, retailers must navigate an increasingly complex and unstable labour market. In this environment, the traditional approach to workforce management, manual scheduling, reactive decision-making and top-down control, is no longer sustainable, meaning retailers must adapt and take action.
At the heart of the solution lies AI. While artificial intelligence may not be a silver bullet, it has the power to optimise scheduling, reduce administrative strain and unlock a better employee experience for both managers and hourly employees. The challenge is how to win both their hearts and their minds. Despite its potential, nearly half of workers remain sceptical of AI in the workplace. If retailers want to realise the benefits of automation, they must prioritise transparency, fairness and employee empowerment.
The high cost of inefficiency
Retailers are grappling with significant operational challenges. According to our 2025 State of the UK Hourly Workforce report, 63% of hourly employees plan to leave their jobs within the next year, and among 18-24-year-olds, that figure jumps to a staggering 79%. For a sector already dealing with low margins and high turnover, these numbers are a wake-up call.
On the frontline, managers are overwhelmed. More than half of those polled report spending over three hours a week just on scheduling, often using outdated tools like spreadsheets or paper rotas. Time that could be spent coaching staff or supporting customers is instead lost to admin. At the same time, 52% say they don’t have enough time to focus on their teams, which can undermine morale and performance.
AI-powered workforce management systems offer a new way. Automating shift scheduling, time tracking and compliance management not only saves time, it also ensures consistency, reduces errors and helps managers focus on high-impact activities.
Collaborate not dictate
Yet despite the promise of AI, some employees remain wary about the technology and its impact on their work-life and job roles. Only 43% of hourly workers have a positive view of AI, and resistance is highest among older employees. This scepticism is understandable. Without careful implementation, AI can feel impersonal or even punitive, especially when it impacts shift allocations, availability or earnings.
To encourage adoption, AI must put humans first. That means making algorithms explainable, giving employees visibility into how shifts are assigned and providing tools that empower, not replace, workers. When employees feel that technology supports their preferences, rather than overriding them, they’re more likely to engage with it.
Schedule flexibility, for example, is a critical factor in job satisfaction. Over 70% of employees say it’s the number one influence on whether they stay or leave a job. AI can help by enabling intelligent self-service shift swaps, prioritising availability preferences and offering real-time schedule updates through mobile apps. These features not only meet employee expectations but also reduce the to and fro that consumes so much of a manager’s time.
Financial stress and the case for EWA
Today’s frontline workers are also under increasing financial pressure. The reduction of the employer NIC threshold and the rising minimum and living wages are adding costs for businesses while reducing take-home pay for many part-time employees. For the youngest workers, retail jobs are often a lifeline but that lifeline is becoming less stable.
One of the most requested benefits among Gen Z employees is Earned Wage Access (EWA), the ability to access wages as they are earned rather than waiting for payday. Over 40% of young workers rank EWA as a top priority, yet fewer than 9% of employers currently offer it. AI-enabled workforce platforms can make EWA feasible by accurately tracking hours and earnings in real time, reducing payroll errors and boosting employee financial well-being.
Communication leads to recognition and trust
Technology isn’t just about automation, it’s also about connection. The research shows that 69% of employees want more recognition and rewards, yet only 44% believe their employer genuinely cares about creating a good work experience. This gap signals a breakdown in communication and trust.
AI can help bridge that gap by supporting better team communication, real-time feedback loops and manager dashboards that highlight top performers. But technology must be paired with a cultural shift, one that values transparency, celebrates contributions and prioritises the employee experience alongside business efficiency.
Three steps for smarter workforce management
To thrive in today’s climate, UK retailers must move decisively. Here are three key steps to ensure AI becomes an enabler of fairness, efficiency and retention:
Automate intelligently: use AI-driven scheduling and time tracking to eliminate low-value admin work. This frees up managers to lead, coach and build stronger teams while ensuring accurate labour forecasts and compliance.
Empower employees: put control in the hands of workers with self-service tools for shift preferences, swaps and availability updates. Offer mobile-first scheduling and prioritise features like EWA to support financial wellness.
Build trust through transparency: make scheduling algorithms explainable. Show employees how and why shifts are assigned. Create feedback mechanisms to adjust and personalise AI-driven decisions, ensuring fairness and improving adoption.
Retail’s frontline workforce is evolving and so must the systems that support it. As the sector braces for continued economic pressures, AI offers a powerful way to protect margins and enhance the employee experience. But the technology must be implemented thoughtfully.
Fair scheduling, financial empowerment and meaningful communication aren’t just “nice to haves” – they’re the foundation of a modern workforce strategy. With the right AI-driven tools and a people-first mindset, retailers can turn employee scepticism into trust, boost retention and build a more agile, resilient workforce.