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Question 2 (AC1.2)

A critical examination of how artificial intelligence will impact employment in the retail sector

Introduction

Artificial Intelligence refers to the simulation of human intelligence processes by machines,

specifically computer systems. These processes include learning, reasoning, problem-solving,
perception, language understanding, and decision-making. AI systems are designed to perform tasks
that typically require human intelligence, such as: machine learning, robotics, computer vision,
natural language processing, expert systems, reinforcement learning etc. (C. Dejoux et al, 2018). AI is
concerned with methods of achieving goals in situations in which the information available has a
certain complex character. The methods that have to be used are related to the problem presented
by the situation and are similar whether the problem solver is human, a Martian, or a computer
program (McCarthy, 1988). AI capabilities enable systems to achieve specific goals (Haenlein &
Kaplan, 2019). Specifically, this ability refers to the ability to simulate human intelligence, especially
those involving cognition such as learning and problem solving, in ever-changing environments based
on continuous data collection (Humerick, 2018). Already, studies are showing the potential
opportunities of adopting AI in a wide range of fields, with manufacturing, digital marketing and
healthcare generating considerable academic interest (Juniper Research, 2018).

Critical analysis

Artificial intelligence is playing a significant role in transforming the way retail operations are
managed and improving their overall efficiency. AI can help retailers optimise inventory levels, reduce
stock outs and overstocking, and improve supply chain efficiency. The pharmaceutical retail industry
is heavily supported by customer service teams, and they play a pivotal role in the operation. There
are now AI-powered chatbots that can handle customer inquiries and support, this is freeing up
employees to provide more personalised customer service (Akshaya.V, 2023). The AI-powered
chatbots and virtual assistants can handle routine customer inquiries and tasks, such as providing
basic information, answering frequently asked questions, and processing simple transactions. It can
also process customer inquiries and requests much faster than humans. This results in shorter
response times and quicker issue resolution, improving overall customer satisfaction. As most
customer service requests are fairly mundane or repetitive, such as tracking an order, checking a
balance, or resetting a password. Modern customers increasingly want fast, convenient service.
Leveraging AI to provide frictionless self-service through bots and other channels is a win for
customers and agents: it provides faster, more efficient service while also removing much of the
repetitiveness for agents. It can also handle a significant portion of customer inquiries, reducing the
workload on human agents. This can lead to cost savings and reduced employee burnout. However,
this could potentially reduce recruitment in customer service teams, if chatbots can successfully take
over the full role of a human. The use of AI in retail can also lead to improved margins and increased
profits, as the technology can help retailers to better understand customer needs and preferences
and optimize pricing and promotions (Akshaya.V, 2023). This allows customer service agents to be
fully equipped with all the necessary information whilst assisting with enquiries.

Technological progress and automation have a huge impact on the way warehouse processes are
carried out and managed. And this technology is developing extremely quickly, radically changing
work in the warehouse. The automation can significantly increase efficiency, elimination of errors,
reduction of operating costs, assurance of constant availability of the full range of goods, the
improvement of process control, increase of precision and speed of information flow are some of the
benefits of introducing automation in the warehouse. Although warehouse processes are becoming
increasingly automated, people will still have to a role by collaborating and interacting with machines
(Balys. P et al, 2020). Picking and packaging which is the process of selecting items from the
warehouse to fulfil customer orders, can now be automated with the use of robots or autonomous
mobile robots (AMRs). These robots can navigate the warehouse, pick items, and place them in
packing stations. Automated packing machines can then pack orders efficiently. A host of large
retailers and eCommerce giants use warehouse automation robots to drive greater efficiencies and
create a better customer experience. Some examples include Amazon, Zappos, Coca-Cola, and
Alibaba. Retail warehouses are also implementing radio frequency identification, this is replacing
bar code scanners and paper trails for the control and organization of inventory. RFID
scanners don’t require a direct line of sight to the product, making it easier to use in a
warehouse setting. When combined with AI technology, these smart warehouse systems can
adjust the volume and speed of order processing to boost overall productivity. What is true is
that automation will replace many repetitive jobs. Warehouse staff are increasingly
dissatisfied with jobs that require them to work in hot, hazardous, and unstimulating
conditions. And those very conditions are what can lead to lower productivity, more human
errors, costly accidents, and a poor customer experience. Implementing AI through robotics
and automation boosts worker and warehouse efficiency and leads to better overall results.

Conclusion

AI has the potential to have a significant positive impact on retail operations and profitability,
providing retailers with the tools they need to improve efficiency, increase sales, and better
understand customer needs and preferences. Retailers who prioritise employee training and
development, and who create a supportive organizational culture that encourages the adoption of
new technology, are more likely to see positive results from their investment in AI. To fully realise the
potential benefits of AI in retail, it will be important for retailers to invest in the technology, as well as
in employee training and development programs that will support its successful adoption and
implementation. Amazon currently uses artificial intelligence to ship products to consumers before
they even think about buying it. They collect a lot of data about each person’s buying habits and have
such confidence in how the data they collect helps them recommend items to its customers and now
predict what they need even before they need it by using predictive analytics. The stores also have
artificial intelligence technology that tracks what items consumers pick up and then automatically
charges them for those items through the Amazon Go app on their phone. With the right training and
development of their staff, this has created a smooth implementation of the success of AI within the
company.

Question 8 (AC2.4)

Unemployment Levels

According to a recent Office for National Statistics report, todays labour market data shows that
unemployment levels has hit its lowest rate since 1974. The volume of people in the UK not looking
for work has climbed around 330,000 over the last three months. There are various contributing
factors to the fall in unemployment rates, such as flexible labour markets, which evidence suggests
that UK labour markets are now more flexible. For example, it is easier to cut hours and keep people
employed on short working contracts. In relation to flexible markets there has also been a growth in
zero-hour contracts in recent years. In 2023 there were approximately 1.18 million people on zero
hours contracts in the UK, compared with 1.03 million in the previous year (D. Clark, 2023). These
contracts are often appealing to students, retirees, or individuals seeking supplemental income while
accommodating other responsibilities, and it gives these group of people the stability of employment
of their own terms. The labour marker has also seen recent trends in pay. Wage growth has been
weak over the past decade, workers in the UK are £11,000 worse off a year after years of “almost
completely unprecedented” wage stagnation that signals a failure of recent economic policy
(Rawlinson. K, 2023). If unions were more powerful, and workers could bargain for higher wages, it is
likely that unemployment would be higher. The fact that wage growth has been stagnant has
encouraged companies to keep holding onto employees. Businesses are retaining low-paid workers
rather than cutting the number of workers.

Management of People

Low unemployment rates have a significant impact on people management within the pharmacy
retail industry, as there are few available job seekers in the labour market, this can potentially lead to
competitive talent landscape. Since 2019 the company has been rapidly increasing in growth and
acquiring more Pharmacies, which falls under the management of Regional Managers and Regional
Support Managers. The low rates can often make it challenging to find talent, and the available
candidates do not always have the required skills. Unemployment rates, while currently falling,
continue indicate a shortfall between the demand for and the supply of certain skills sets, creating a
skills gap (Roper. C et al, 2017). Therefore, from a people management perspective, the business has
invested in further training and development programs to upskill existing employees and bridge skills
gaps in new hires. The workforce shortage is attributed to skills gap and jobs-skills mismatch. As job
opening increases so also is “the widening of skills gap and an ever-dwindling sense of job security for
today’s workers” (Ejiwale.J, 2019). The current assistant managers that work in the pharmacies can
be promoted to regional support managers upon the completion of a robust training and
development program up. The existing regional support managers also have the opportunity can be
upskilled to a junior regional manager role, which requires further development from other senior
regional managers. This also applied to all new hires that may not have the desired skills, but the
preferred choice is to develop from within.

To remain competitive and accommodate current and new employees needs and preferences, the
company offers more flexible working arrangements. Line managers are regularly advised to suggests
other alternatives during flexible working meetings when the full request cannot be approved. This
also includes allowing the head office colleagues to move to hybrid working after being fully remote
during the pandemic. Many of the staff requested to continue working remotely post pandemic due
to the benefit or work-life balance, and other larger retail companies were seen to be offering this
benefit. Therefore, the decision was made to implement a hybrid working system for all office-based
employees, and this benefit is also offered to potential hires, this creates talent attraction retains
existing staff. There are also more part-time and zero-hour contracts being advertised for warehouse
operative roles and positions within the pharmacy branches.

The unemployment rates also prompted the people management to review the maternity and
paternity package, which at the time only offered statutory rates. The benefit was changed to an
enhanced package to help attract and retain employees. It was agreed that employees would be
offered 3 months full pay maternity leave after 1 years’ service, and the remaining weeks would be
paid at statutory rates. The paternity leave was also increased from 2 weeks leave to 4 weeks plus full
pay. This was communicated to all staff via the intranet bulletin and updated in the policies. This was
an issue that had been raised previously by many female colleagues especially, and due to the tight
labour market, the people management team advised the executive board of the potential
implications.
Conclusion

The findings show that the unemployment levels will continue to have significant impact on people
management. It seems that flexible working is the new world order, and many employees are now
keen to maintain a flexible working environment to help them balance their personal and
professional lives. And, despite the looming economic forecast, that mindset is unlikely to change.
Considering the data referenced from the Office of National Statistics, this indicates that the UK is still
in a tight labour market where staff hold the power, businesses need to respond to employee
demands if they want to keep talent that is vital to ensuring their readiness for the future. The
shortfall between the demand for and the supply of certain skills sets, creating a skills gap potentially
due to the low levels of unemployment as stated by Roper.C (2017). While low unemployment can
make it challenging to find talent, it doesn’t necessarily mean that all available candidates have the
required skills. People managers may need to expedite hiring processes and provide compelling
reasons for candidates to choose their organisation over others. They may also need to invest in
training and development programs to upskill existing employees or bridge skill gaps in new hires.

Question 11 (LO3 AC 3.3)

Introduction of a four-day working week

Flexible working, that is worker’s control over when and where they work, has increased substantially
over the years across most industrialised countries. Furthermore, there is increasing demand for
more flexibility in the workplace especially from the younger generation (Chung. H et al, 2018). There
are many ways of flexible working, which can provide solutions for a variety of employee situations,
employer needs, and industry requirements. More specifically, the introduction of the four-day
working week which is a currently a highly controversial topic. The ‘four-day week’ is best described
as a movement towards a shorter working week (in terms of total hours worked), without any loss of
pay. For example, reducing a 35-hour week split over five days to a 28-hour week split over four days.
The ‘four-day week’ has become shorthand for shorter working hours, but there is wiggle room for
how organisations might achieve it (Boys. J, 2022).

Argument for and against a four-day working week

The four-day week trials are an opportunity to test and learn from new ways of working. The general
theory behind a shorter week is that happier, more fulfilled employees are therefore more focused
on their job, and it will naturally lead to an increase of productivity when in the workplace. Results
and high-quality work are important and stem from people who are passionate about what they do.
A boost in productivity can equate to higher performance and profitability, and a 4-day productive
workweek is more effective than a 5-day workweek that drags out (Tessema.M, 2023). However,
some employees may feel pressure to complete the same amount of work, despite working fewer
hours per week. In client-facing industries, employees face balancing client needs with fewer hours
devoted to scheduling conflicts. Additionally, work intensity may not decrease with a 4-day
workweek, so employees face the challenge of managerial pressures surrounding performance,
monitoring, and productivity. This could lead to employees taking fewer breaks and limiting “banter”
or communication with co-workers, possibly stifling creativity and innovation as employees work
harder to meet deadlines (Russell et al, 2022).

All things considered, there are still an ample number of pros to combat the above cons. Four-day-
weeks can directly solve issues of well-being of workers by reducing one of the key culprits of work-
related illnesses – that is, working long hours and overwork (Kelly and Moen, 2020). It improves
workers’ well-being by not only allowing individuals more time to recover, but also allowing them to
take part in activities outside of work such as spending more time with family and friends. Providing
workers more capacity to spend time with others can also help improve the well-being of others –
such as their children and other family members (Chung.H, 2021). On the third day off, people can
spend more time with their families and have personal time to focus on mental health and exercise.
This type of schedule can give companies a competitive advantage in attracting talent (Abend, 2023;
Agovino, 2020). If a 4-day workweek enables employees to balance work and life, their physical and
mental well-being, then job satisfaction will likely improve. The better employees’ well-being and job
satisfaction are in good shape, the more likely they will be willing to stay with the company and be
productive (Pencavel, 2014). Such situations also attract potential job applicants.

While there are many benefits to moving to a 4-day workweek, some employers will have a
challenging time once they get into the details of how logistically they could make it work for their
organization while supporting their customers and their bottom line (Bird, 2010). Some companies
may face the challenge of being unable to shut down business for a day to accommodate extra days
off. Many companies run seven days a week, and when they start to factor in external participants,
such as suppliers and customers, scheduling additional days off for fulltime employees is complicated.
For most customer-based businesses, the slack created by allowing a 4-day workweek results in need
for additional help. Businesses may then be forced to pay employees overtime to cover extra days to
maintain their business (Tessema.M, 2023). While, at first, it sounds like a great benefit to the
employee, the company may have to raise their prices for their customers to offset costs.

Microsoft Japan, to take one example, trialled a four-day working week in 2019, and the effects on
productivity and workers’ morale were found to be positive. The apparent success of the trial,
however, did not prompt a permanent move to a four-day working week—rather, it was followed by
a reversion to a standard five-day working week. Although it was reported that the shortened weeks
led to more efficient meetings, happier workers, and boosted productivity by a staggering 40%, the
company concluded at the end of the trial. In addition to the increased productivity, employees took
25% less time off during the trial and electricity use was down 23% in the office with the additional
day off per week (Guardian, 2019). Another four-day work week experiment took place in 2018, with
a New Zealand trust management company ‘Perpetual Guardian’. The company did the experiment
over two months for its 240 staff members. The company reported that employees were experiencing
better work–life balance and improved focus in the office. Staff stress levels decreased by 7% points
across the board as a result of the trial, while stimulation, commitment, and a sense of
empowerment at work all improved significantly, with overall life satisfaction increasing by 5% points
(Guardian,2019).

Conclusion

This analysis contends that though the 4-day workweek presents some challenges for employees and
employers, the numerous advantages for employees and employers provide a strong case for
companies to work toward a 4-day workweek strategically. Based on the information provided in the
analysis, a shorter working week will create happier employees which will generate a boost in
productivity and can equate to higher performance and profitability within businesses. Companies
will need to be innovative in how they implement this policy, and there is no one size fits all. The
evidence in both examples of companies that have trialled the four-day working week, showed a
boost in people’s positivity and productivity at work. So, though a shorter working week may come at
an initial cost and bring some challenges to organisations, the benefits of a more productive and
happier workforce will outweigh this.
Question 15 (LO4 AC 4.3)

An overview of sustainability and it’s importance

Sustainability in business refers to a company's strategy to reduce negative environmental impact

resulting from their operations in a particular market. An organisation’s sustainability practices are
typically analysed against environmental, social, and governance metrics. Sustainability is a business
imperative as it brings various benefits, such as environmental preservation, cost savings, compliance
requirements, long-term viability, community, and social impact. Day Lewis pharmacy plc strive to be
a sustainable organisation, with a growing number of 200 pharmacy branches and 1 head office. Since
2020 the company has been transitioning into a paperless environment. All contracts, amendment
letters and various other formal documents are sent digitally via DocuSign. There are also strict waste
reduction and recycling rules across all branches. Suppliers are also encouraged to use minimal
packaging for medications and products to reduce packaging. Pharmacy teams have been trained to
promote sustainable practices and dispose of medications safely. This includes educating patients
about proper medication disposal and providing medication take-back programs to allow patients to
safely dispose of expired or unused medications, preventing them from entering the water supply.

Intervention 1

All delivery drivers for the pharmacies are provided with gas fuelled vans which are considered not to
be environmentally friendly. A solution to this would be to provide the drivers with electrical vans.
Electric vans can promote sustainability in various ways, making them more environmentally friendly
and socially responsible choice compared to the traditional gasoline or diesel-powered delivery
vehicles. The motor vehicle industry has been the chief contributor to environmental pollution and
the effects of climate change (Bhandarkar, 2013). The use of motor vehicles has resulted in
environmental deterioration that includes the greenhouse gases such as methane, carbon monoxide,
Sulphur (IV) oxide, and some heavy metals getting into contact with the environment. The growing
health concerns such as the increased cancer cases have been associated with the effects of the
heavy metals getting into contact with the human systems through inhalation as well as
biomagnification. Resorting to electric cars has been speculated to not only help in solving this global
disaster but as well, enhance the quality of life. (Soper,2007). The initial expense of purchasing the
electrical vehicle will come at a higher cost than the normal vans, but once the company purchases
the vehicles, the cost of ownership decreases. In general, the expenses of maintenance and general
operation are lower with an electric vehicle than with a gas automobile (Ali. S, 2021). In addition, the
government has provided some tax breaks and credits to consumers who buy electric vehicles, which
might help to reduce the cost even more. To help free up more funds for this initiative, the business
can consider reducing the cost of the yearly annual conference which is estimated to cost nearly half
a million as it accommodates all 3000 employees, suppliers, investors, and guest speakers. Once the
electric vans are purchased, the company can sell all the old vans which will make back a small
portion of the money used to make the purchases.

Intervention 2

The companies head office is based in Croydon, which over the years has been experiencing high
youth crime rates. There are youth and sports clubs within the area but are often underfunded and
would benefit from further development and maintenance. There are currently teenagers who
attend these clubs after school, but the community would benefit from more of them attending and
being in a safe space during their free time. The company should consider contributing to the
maintenance of at least 2 of these youth clubs, it could be a yearly contribution of £30,000, and
considering the monthly profit made as a national pharmaceutical company this is just a small
amount. Youth clubs offer a safe and supportive environment for young people to develop essential
life skills, including communication, teamwork, leadership, and problem-solving. These skills
empower them to become active and engaged citizens, contributing to the social fabric of their
communities. As young people develop a sense of responsibility toward their communities, they are
more likely to engage in sustainable practices and contribute to the long-term well-being of their
communities and the planet. An engaged young population is essential to a community's long-term
well-being (Berardi, 2013). The Youth engagement is essential in order to have a lasting influence on
young people and their communities. Youth participation is both limitless and unavoidable in order to
achieve long-term sustainability (Ekka. B et all, 2022). The company’s contributions may go to the
development of basketball courts, football pitches, equipment, food and drinks, mentorships, and the
general running cost of these facilities. As everyone in the business has basic DBS checks, staff can
volunteer to help in these facilities during their free time. The development of sports activities in
these facilities will go a long way, the promotion of physical and mental health through sports, fitness
activities, and programs that can potentially address issues such as stress, anxiety, and substance
abuse. This is all vital as a business for promoting social sustainability as it creates and maintains a
society in which individuals and communities have the opportunity to thrive, while also preserving
the well-being of future generations.

Conclusion

In conclusion both recommendations were made to individually address the companies social and
environmental responsibilities. The use of electrical vehicles aligns with long-term sustainability goals,
contributing to efforts to combat climate change and reduce dependence on fossil fuels. The delivery
drivers will be notified by the regional managers prior to these changes and will be equipped with all
the necessary information for operating these vehicles, i.e., locating charging stations. It will take
some time to adapt and there will be lots of queries, but it is overall a good move to consider. The
contribution to the maintenance of youth clubs also plays a significant role in promoting sustainability
by providing numerous benefits to young people and the community. Overall, community
engagement is a vital component of building strong, resilient, and thriving communities. The people
management team should communicate the business decision to the wider company, so they are
aware of the good work the business is doing to improve the community and give the opportunity to
volunteer.
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