Employee Empowerment Plus Flexibility and Tech Help Neiman Marcus Decrease Turnover 20%

exterior shot of neiman marcus store at hudson yards

The COVID-19 pandemic has changed the culture of work for all employees, from white collar office workers going remote to associates on the front lines of stores picking up omnichannel roles. This has led to a labor shortage and increased turnover across multiple industries, but Neiman Marcus Group (NMG) has overcome the challenge by revamping how its employees approach work, and giving them tools to work effectively both in-person and remotely. For example, associates have used the retailer’s proprietary NM Connect selling tool more than 10 million times since it was introduced in March 2020.

For the past two years, the company has emphasized flexibility to let its employees work wherever, whenever and however will get the best results — and the strategy is paying off. The NMG turnover rate has dropped 20% from 2019, and time-to-hire fell 32% as the retailer filled 1,200 roles in fiscal 2021.

The  new philosophy impacts both corporate employees, who can choose working environments to fit their unique needs, and associates, who have been granted the autonomy to determine their own work environment and schedules. Neiman Marcus Group’s Way of Working (NMG | WOW) strategy differentiates itself with what the retailer calls an “omnichannel” working philosophy.

“Unlike the ‘hybrid’ approach some employers are implementing, whereby employees are only provided flexibility about when and where they work a fixed number of days per week, our ‘omni’ way of working is analogous to how our customers engage with us: tailoring to each person’s unique needs, being present wherever they choose to engage and leveraging our advanced tools to empower an efficient, effective way of working,” said Eric Severson, EVP, Chief People and Belonging Officer at NMG in an interview with Retail TouchPoints. “Since before the pandemic, NMG has been leading with this flexible approach, and today we are recognizing the importance of not only offering omni work options, but also empowering our associates to work whenever, however and wherever to achieve their best results — and to enable NMG to hire the best corporate talent, wherever they choose to live.”


Even Store Associates Can Benefit From Remote Working Options

Technology like NM CONNECT has played an important role in NMG’s recent success. NM CONNECT is designed to offer an integrated luxury retail experience that spans the retailer’s brick-and-mortar footprint, ecommerce platform and remote selling channel. Since its launch in March 2020, associates have used the tool more than 10 million times to connect with clients in over 3 million conversations and to share 1.5 million personalized looks.

The feedback from associates on CONNECT has been wholly positive as retail employees all over the market are hungry for digital tools like this to connect with their clients,” said Severson. “The tool works as an associate-facing app to connect with their clients digitally, while the clients receive top-notch personalized service from the associates without downloading the app themselves.”

NMG’s integrated luxury strategy includes five types of selling associates: Service Ambassador, Client Advisor, Digital Client Advisor, Personal Stylist and Digital Stylist. Each role has its own place in the store to help create unique experiences and build relationships with shoppers, from the Welcome Point to the Personal Stylist Lounge.

The number of available choices enables associates to handpick their own schedules and maximize their productivity. Some choose to spend most of their time in-store, while some prefer a combination of digital and in-person roles and others go entirely virtual. All associates are supported with training sessions to help them build specific digital skills including outreach, personal branding, Instagram, photography and video. The materials were created to help every associate “take their digital clienteling efforts to the next level across various touch points,” said Severson.

“We are watching the retail industry evolve daily alongside the changes of the world, and like any retailer, we must adapt to the quickly evolving needs of our customer,” he added. “Overall, at NMG we believe in an integrated luxury experience — being there for the customer however, whenever and wherever they choose to shop and engage. For example, some customers prefer to shop online but still value the in-store experience. Some customers may change their preferences by the day, but thanks to digital tools like CONNECT, our unified luxury experience and our new integrated policies, we are more agile than ever. We have the tools and access to proprietary analytics that enable us to continue being agile and get in front of changing consumer behaviors.” 

Flexibility is a Powerful Incentive in a Tight Labor Market

Flexibility backed up by technology has enabled NMG to overcome the current labor crunch, both in terms of hiring new workers and keeping the ones it has on board. In fact, NMG was already aware of the importance of flexibility pre-pandemic — internal polling and assessments had previously determined that it was one of the top three drivers of employee happiness and productivity, which matches results Severson has seen in other research.

“The reason we have bucked external employment trends, improving both time-to-hire and retention rates vs. pre-pandemic periods is simple,” said Severson. “In most external studies over the past year, flexibility ranks among the top three drivers of both talent attraction and retention — often ranking No. 1 — making it a significant differentiator; and our omni approach allows us to expand our market for talent outside a local hiring area. For example, 39% of our corporate hires over the past 18 months are located outside the Dallas-Fort Worth metroplex where our corporate hub is located. Similarly, many of our Digital Client Advisors are not located in the same market as one of our stores.”

NMG already had been working on solutions for workers seeking flexibility in their jobs, which gave the retailer an advantage when the pandemic hit and remote become the norm. “NMG’s flexible and remote policy empowers our associates to decide how and where they work to maximize their effectiveness,” said Severson. “For our retail associates, through tools like [proprietary selling tool] NM CONNECT they are able to capitalize on our relationship-first mentality, interacting with their clients in a more personal way across our retail channels. For our corporate associates, we believe this empowerment of the individual will in turn provide empowerment for the team to work smarter, more collaboratively and more efficiently.”

The Pandemic Has Proven the Importance of Flexible Work

NMG is currently working on an integrated office hub in Dallas that will help corporate employees make the most of their time, whether they’re in-office or remote. The retailer is still ironing out the details of its design and layout, but Severson is confident that the space “will be a differentiator for us.”

“Unlike the traditional in-person workspace,it will be designed technologically and physically from scratch to turbocharge our omni way of working, with a focus on connecting people across geographic boundaries, enhancing collaboration and increasing speed and flexibility,” he said. “The new hub will reinforce our NMG | WOW culture and provide our associates with a collaborative environment for them to interact, connect, and cocreate.”

The pandemic has “inadvertently became the largest and longest global experiment about flexible work in history,” according to Severson. The data NMG has already collected on its flexible work policies is promising, and the retailer believes empowering its employees in this way is the key to helping them become as productive as they can be.

“At NMG, the results of the NMG | WOW speak for themselves: our business performance is better, our people are more productive, and we are enhancing our ability to attract and retain talent,” said Severson. “Given that many businesses have indicated that they will not offer this level of flexibility post-pandemic, we intend to double down on our commitment to it — to differentiate ourselves from the competition in an unprecedentedly challenging talent marketplace and to realize our purpose of making life extraordinary for our associates and our customers.”

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