The retail industry faces a new hurdle as it emerges from the pandemic — finding and retaining talent. What worked before is not working today. Employers need to rethink their culture and compensation and benefits models to attract talent to their businesses.

 

Nearly 90% of employers surveyed by the Society for Human Resource Management (SHRM) said they struggled to fill open positions during summer, and 73% said they saw a decrease in applications for "hard-to-fill" positions. Further, a study by Oasis found that attracting talent is the number one business challenge for employers in 2021.

 

The July 2021 Bureau of Labor Statistics (BLS) report showed employment in retail trade has been down by 270,000 people since February 2020, even though average hourly earnings increased for the third month in a row. Retail organizations have confirmed that raising wages above the minimum wage or even to the proposed federal minimum of $15 per hour is not attractive enough to entice applicants to open jobs.

 

Workers Reevaluate Options

The COVID-19 pandemic caused retail workers to reevaluate their options. Employees are factoring into their work decisions how their employer treated them when the pandemic began and what they experienced when they were let go or had their employment paused. Each individual's "why I work" is unique. The same is true now for why they do not. For some, health precautions forced retail employers to reduce headcounts, and the job or the hours are no longer there. For others, the pandemic changed childcare, eldercare, and home duties, reducing the time and energy available to work.

 

The pandemic also led to structural changes in the retail industry. The explosion of supply chain and warehouse businesses associated with the growth of online retailing created new employment options for workers – options that usually include more standard work hours, higher pay, and benefits unavailable in other industries. This shift has also caused workers across the board to reevaluate their career priorities.

 

While money might help some return, employers need to rethink their employee value proposition (EVP) to create a compelling and distinct employee experience. It's no longer enough to attract and retain talent with compensation and benefits alone, as these types of contractual rewards are expected as standard by applicants today.

 

Many retailers are beginning to listen to what their employees need beyond pay. A few examples were highlighted by CNBC recently:

 

  • "Carter's, a children's apparel retailer and one of Bright Horizon's clients held several sessions last year to hear working parents' problems. That conversation revealed how important family support was becoming."
  • "Best Buy, which offers backup child care to its employees through Care.com, began to provide $100 monthly reimbursements for tutors for children between the ages of 5 and 18, and the retailer expanded its paid leave program, giving workers up to six weeks of paid leave."
  • It is critically important to develop the right EVP for your workforce to attract and retain the right retail talent.

Reward What Matters Most

While the pandemic caused retailers to think differently about consumers, employers also need to think differently about their employees. According to a recent World at Work report, Why We Work: Drivers of Employer Choice and Employee Retention," workers in the retail industry are least likely to indicate base pay and social culture as influencing attributes of why they work. Of particular interest, health and welfare benefits are seen as being equally influential motivators as base pay.

 

Especially now that COVID-19 is still lingering and concerning headlines spread easily across social networks, creating a safe and caring work environment for employees is crucial. No matter what procedures you put in place or how you shift your business model, employees need to know that you consider their health and safety to be of utmost importance, as you do for the consumer.

 

Workers are also seeking maximum flexibility in their schedules. Work schedule is cited as a top influencing attribute 62% for applicants when looking for a job. When feasible, allowing flexible work schedules or working from home (part-time or full-time) will increase the appeal of working at your organization.

 

Across all industries, 77% of executive respondents to the 2021 Global Talent Trends study believe freelance and gig workers will substantially replace full-time employees within the next four years. Are there ways to harness this movement to the advantage of the retail industry? For instance, instead of antiquated last-minute schedules, could you move to an app-based gig system for personnel management?

 

Redefining the Retail Career

Retailers frequently talk about creating a new retail experience for customers, but can you do the same for retail employees? Successful retailers will leverage technology and "big data" to provide a differentiated shopping experience for customers. Still, there is a need to leverage technology and big data to create a positive, compelling working experience for employees – experiences that provide maximum flexibility.

 

Employees today want opportunities to do meaningful work for a company they believe is contributing to the greater good of society or the planet. They want to develop skills that are in demand in the market and be rewarded in meaningful ways.

 

Traditionally, retail labor has been seen as primarily comprising the generation just entering the workforce. But times have changed, and there are currently four generations (see figure) of retail employees causing congestion along the retail career highway. Each generation wants to drive at different speeds, and instead of seeing the open road ahead, the only thing each one sees is the taillights of the previous generation.

 

 

What steps has your organization taken to demonstrate career progression from store or distribution roles into corporate roles? Are there too many levels of the ladder to climb, causing talent to become frustrated with the process?

 

The Future of Work

What your brand says about your product and services is what brings consumers back each time. As your brand evolves, the way you look at labor has to evolve as well. Branding is crucial to retail, and making employees feel part of the brand family can start today. Talent is out there, waiting for the right opportunity that provides total rewards. It's time to rethink retail to attract and retain available talent.