The retail sector is one of the largest employment sectors in the US. According to the Bureau of Labor Statistics, retailers employ more than 15 million people nationwide, or more than 10 percent of all employed workers.
Technology has had a profound effect on retail, notes Steve Blyth, founder and CEO of Engage Works. Online shopping, kiosks and similar tools have changed customer expectations, which in turn changes the expectations and demands placed on retail staff.
Fortunately, technology offers opportunities to improve recruiting and retention in the retail sphere, as well. Although retailers face a number of challenges in recruiting, these challenges also provide opportunities to build a strong, thriving retail team.
2019’s Top Retail Recruiting Challenges
A thriving economy is good news for retailers’ bottom lines. More money in pockets means more opportunities to attract interest from the consumers who would spend that money at retail establishments.
But a thriving economy poses challenges for retailers, as well. These include higher turnover and the risk of taking additional damage from outdated hiring practices.
The Bureau of Labor Statistics places retail in the top five industries with the highest employee turnover. These numbers can be even higher for part-time and seasonal workers, who find it easy to switch jobs in a thriving economy.
A study by global consulting firm Korn Ferry found that nearly one in three retailers saw an increase in turnover during 2018. The average rate of turnover for part-time hourly retail employees rose to 81 percent, up from 76 percent in 2017.
“While high consumer confidence and a strong economy mean year over year sales are predicted to grow, low unemployment means there just won’t be enough workers to fill retail positions,” says Craig Rowley, senior partner for retail and consumer at Korn Ferry.
Replacing retail staff can be expensive. A 2012 study by Heather Boushey and Sarah Jane Glynn, now executive director at Equitable Growth in Washington, D.C. and a freelance consultant respectively, found that on average retailers spend $3,328 to find, hire and train a replacement for a single $10-per-hour position. As turnover increases, so does the total cost of recruitment for replacement workers.
And while part-time and seasonal workers offer retailers an opportunity to test drive a relationship with an employee before offering them additional hours, finding both seasonal and part-time workers is increasingly difficult in a tough economy. Addressing turnover isn’t work that can be done quickly or without planning.
Outdated Recruiting Methods
For most retailers, the single biggest obstacle to finding better talent is the one closest to home.
“The biggest threat to retail isn’t Amazon,” says Dr. John Sullivan, professor of management at San Francisco State University. “It’s poor recruiting.” Want ads, job fairs and help wanted signs won’t offer the results retailers need, and lengthy interview processes often drive away the very candidates that retailers most want to hire.
According to Sullivan, retail businesses seeking to hire new employees in a tight employment market are best served by adopting data-driven approaches. These include analyzing your recruitment systems carefully, reducing time to hire and examining your data for information on how to help top employees stay with the company.
Turning Challenges Into Opportunities: How to Find New Talent
While data offers a chance to unlock your company’s hiring strengths, the methods retailers use to collect and analyze this information plays a profound role in what insights the data can offer. Focusing on key areas within the recruitment and retention cycles can help retailers better understand where their best people come from, why they leave and how to encourage them to stay.
Where Do Your Best People Come From?
Digital sources connect job-seekers and talent in ways retailers never had to consider two decades ago. Today, some sources provide more innovative opportunities than others when it comes to recruiting strong retail talent.
Social media provides new opportunities to find the talent retailers need. For example, Australian retailer City Beach recently transformed its seasonal recruitment with a strong social media campaign designed to attract the type of employees who thrive during the company’s busy Christmas season, says Mirela Lane, City Beach’s former head of human resources.
For example, City Lane produced a series of YouTube videos on what working with the retailer actually looks like. The videos explored topics like City Lane’s culture and what employees did from day to day. By sharing the videos on Instagram and Facebook in addition to YouTube, City Lane was able to expand its reach to more potential employees who were already engaged with the City Beach brand.
Within the first four hours of posting job openings, City Beach received 15,000 new candidate applications, or about 15 candidates for each open role. The company was able to hire 1,100 new workers in just eight days.
Understand Why Your Best People Stay
Strong data collection and analysis also helps retailers understand why their best employees stay with the organization, which allows them to recruit and retain like-minded talent.
One increasingly popular way to keep retail workers within the company is to get creative with benefits. For instance, Starbucks recently added childcare benefits to its compensation package, says Andrew Challenger, vice president of media and business development at global outplacement and executive coaching firm Challenger, Gray & Christmas.
With employers facing a decrease in available talent and increasing pressure from competitors, “it’s no wonder companies are getting creative in their benefits packages,” Challenger says.
Creative compensation allows retailers to leverage inside information on which benefits employees value most, then find ways to offer those benefits while maintaining their hiring budgets. For instance, a company that understands its employees prize their continuing education opportunities can centralize these opportunities as part of its employment brand, thereby attracting new talent with a similar desire to learn and grow on the job.
Recruit From Within
In a strong economy, retail workers have more opportunities to leave their current employers because they see career growth opportunities elsewhere. Employers who offer those same opportunities in house, then, increase their chances of keeping top talent.
Office supplier Staples faced exactly this problem. By tracking exit data, the company realized its employees were leaving because they did not see opportunities for growth within the organization, despite the fact that Staples hired 30,000 people in the same year it tracked employees’ reasons for leaving, says Lisa Pueschel, vice president of talent acquisition.
To turn its turnover around, Staples began focusing on building a culture of internal mobility. In so doing, the company changed its employees’ view of their own opportunities at Staples. “People aren’t necessarily looking to leave their companies, just their jobs,” Pueschel says. “People want new opportunities to learn, to grow and to drive value.”
Futureproof Your Retail Hiring
The economy looks good now, but it may not stay this strong. Some economists are already predicting an economic downturn as early as 2020.
Other factors — tariffs, climbing mortgage and personal debt, a tight transportation market, and rising input costs — could all put additional pressure on retailers within the next few years, says Steve Barr, board member at the NRF Foundation.
“While retailers have every reason to be optimistic about the holidays, they also have reason to be cautious and prepare now for what comes after the season,” Barr says. This includes changes in the economy that could affect how retail candidates seek new jobs.
By analyzing their data, retail companies can better understand what new hires and existing talent want. These insights can in turn reveal new ways to drive recruitment and retention, no matter how the hiring market changes.
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