Photo: RetailWire
Does retail have a problem with how it recruits and hires workers?
After years of underinvesting in people, human resources (HR) and hiring systems, much of the retail industry now finds itself scrambling to find, qualify, hire and on-board new employees who have plenty of other job options, including those as independent contractors.
America’s workforce, which appears to have been permanently changed by the novel coronavirus pandemic, is largely being fueled by the gig economy. Forty percent of the economy is now powered by gig workers, a segment growing three-times faster than the national workforce, according to a Forbes article from earlier this year.
The gig economy is both disruptive and here to stay. Job marketplaces that power gig organizations make hiring easy, quick and flexible for shift and hourly workers who are attracted to the contractor lifestyle. Retailers and restaurants can better compete for human talent and hire more efficiently and effectively by placing their focus on two key areas.
Treat job candidates like customers
Retailers already know how to digitize journey(s) and engage with customers (CX). It’s time to treat candidates like customers. HR systems that recruit for corporate positions lack the candidate experience, speed and scale needed for field-level hiring. Building a better acquisition process — simplified application options, frequent updates, status checks, reminders — will grow the applicant pipeline, increase conversion and reduce ghosting. A modern candidate experience that reflects the brand value can serve as a differentiator in recruiting.
Automate and speed up the process
Transform, digitize, scale and securely speed up the hiring process and on-boarding processes. Create a single repository for all applicants (corporate and field). Use analytics to mine applicant database and social media for high-potential candidates. Automate reference, employment and background verification to mitigate risks and ensure safety and compliance. Create alerts and messages to keep candidates engaged and informed of where they are in the process. Implement immediate closed loop hiring, as opposed to legacy retailer timeline of hire-next-week / get-paid in two weeks, to complete with on-the-spot hiring and same-day-pay. Offer the ability to bid for shifts by day or day-part. Allow employees to work multiple positions and at more than one location.
The pandemic has issued a wake-up call for employers and, along with the growth of job marketplaces and the gig economy, the relationship between workers and companies has permanently been upset. Retailers who develop new strategies and technologies will be much better positioned to find, qualify, hire and on-board top talent.
Discussion Questions
DISCUSSION QUESTIONS: What do you see as the biggest impediments to retail hiring at this point? What do you think are the keys to hiring more efficiently and effectively than in the past?
Poll
Loading …BrainTrust
Jeff Weidauer
President, SSR Retail LLC
Ian Percy
President, The Ian Percy Corporation
Let’s see:
I have been saying this for a long time. Store associate turnover is not an accident. Now people aren’t even bothering to take it as a transient job. It’s easier and safer to be an Uber driver, really.
The problem is (and I’ve also been saying this for a long time), I don’t really know how to fix it. Walmart is trying by paying in-store associates more, in exchange for implementing more self-checkout. Many consumers don’t like that either. This is a borderline intractable problem.
And you can’t underestimate the importance of predictable schedules. Imagine having a two-month-old at home and being told to come in, today, when you weren’t scheduled. America’s very strange no-childcare policy doesn’t help.
Well, there are certain retailers with more limited hours. Usually locally owned type of stores. Or more specialty type stores like kitchen/home material or furniture type stores. Then you have probably the largest chain retailer I know of closing a day Hobby Lobby with being closed Sunday and also closes pretty early at night (7 PM or 8 PM).
Standard consumable goods retail is in a rut — too much part time workforce, too many things taking up labor that the customer doesn’t care about, store hours are probably longer than they should be … I could go on and on.
It shouldn’t be that hard for retailers to offer consistent scheduling. I remember in college working at a large retailer. I liked the closing shift, being in college. An equal, who was older, married and had a family, liked the opening shift. The store manager who had a long background in unionized grocery and was used to having more full time employees and just scheduling them the same shift every day every week was good with it. Everyone was happy. Someone from corporate came in and looked at the schedule as part of a store inspection and said no, you can’t do that. You need to have “fair scheduling” meaning people work an equal number of opening and closing shifts. So we had to change the schedule. And also ended up with the scenario of having to close one night and open the next morning which wasn’t great.
These are great points for employee retention, Paula. The gig economy and job marketplaces are permanent and formidable competition for retailers and restaurants. The retention/career issues you mention absolutely need to be a focus and I personally am heartened that chains like WMT, THT, etc are offering better pay, training, benefits, and schedules.
My POV is that retailers have done nothing on the front end to improve the hiring and on boarding processes, so they are losing out before even getting candidates to become employees. New tech and CX can help that along. And new tech can also allow things like immediate pay, bidding for shifts, and working multiple job codes in multiple locations.
There are lots of issues with hiring, one of them being the ongoing pandemic which makes many nervous about working in public facing environments. On top of that there are the usual issues with pay and benefits relative to the effort required for the job. However I’d say the biggest issue isn’t necessarily with hiring per se, it is with retention. Good retailers should look to retain their talent by making work emotionally as well as financially rewarding. I visited a lot of grocery stores over the weekend and spoke to workers there. Out of them all, the two that were fully manned and had fewer labor issues were Wegmans and Market Basket. Funnily enough, both are known for treating employees well and inspiring loyalty among their teams. Go figure!
In contrast to the part of the industry that has to fight a labor shortage and is known not to treat its own workforce well enough, I recently heard the quote: “It is easier to get into Stanford than to get hired by Apple.” (Labor shortage be damned.). One man’s ceiling is another man’s floor.
Retailers face many hiring challenges, but two are at the top of the list: pay and safety. Pay has always been problematic, with many retailers still paying relatively low wages. This remains a challenge that is exacerbated by upward wage pressure from other segments struggling to find workers, like hospitality. Safety became a concern since the pandemic first struck and with the Delta variant gaining momentum, the health concerns related to interaction with the general public will be a barrier for many workers. I think that the pay increases and education funding incentives now being offered by some of the leading retailers like Target and Walmart are a step forward.
The biggest challenge in retail hiring today is hiring authentic brand ambassadors who can truly represent a brand. Although gig workers could fulfill a certain skillset or knowledge required in product creation, design, or data analytics, the sales floor requires more than a skillset – it requires commitment.
Many part-time workers are great brand ambassadors and need the flexibility that a full-time role doesn’t give them but I could argue that a gig worker may only care about flexibility and could be a flight risk.
A compounding problem requires a compounding solution. Let’s start with the three Ts: Tools, Talent, and Training.
Retail labor challenges have been with us for a long time. Solving those challenges isn’t going to happen overnight. There was a time when working in a store was a way to make a decent living, but that’s long past. Whether it can be again – or if retailers even want it to be – remains to be seen. But there are too many other options today – no one wants to be underpaid, part-time, and without a career path.
Great article, with solid points made.
Paula Rosenblum nails it too with her comments! There is no easy answer for the “swamp” that so many retailers created over the years. Treating staff as an expense, and a disposable one at that, created an overall poor brand for a retail career. Yet there’s an ever-increasing number of retailers that not only view their staff as valuable assets, but also treat them as what they are — humans!
A living wage is a starting point. Having better managers in place that know how to create an amazing work experience is essential. Training, coaching, rewards, recognition, advancement opportunities — there’s a long list of things that need to be in place if retailers stand a chance of attracting and keeping staff. But for those brick-and-mortar retailers out there, if you don’t recognize the immense value of your front line teams now, you likely never will.
We’ve all heard the motivational speaker’s story (originating in 1671) about the brick layer who, when asked what he’s doing replied “I’m a cathedral builder. I’m building a great cathedral to The Almighty.”
That is a good parable about the power of purpose. So how does the story of a person working in retail end when they are asked what they are doing?
It’s great to say that applicants deserve a better candidate experience. But it seems that the applicant has to actually want a job in retail to begin with. With gig and WFH opportunities as competition, the on-the-job experience is the real filter. There is nothing easy about working in retail, at any level. But the recent pay and benefit enhancements announced by Target give the overall on-the-job experience there very high marks.
Bottom line – pay more. There is now a lot of competition for people in the services industry, and compensation increases seem to be moving faster than any planned increase in minimum wage that has ever been discussed. This is going to make it really hard for retailers to hire, but on the other hand it’s going to significantly increase the spending power of these better paid workers/consumers, which will increase sales/profits for retailers to afford better wages. I think these changes are going to be structural and it is a bit hard to predict the end state.
I’m noticing all the references to “pay more” which, of course, is good advice. Pay does help people reach the bottom Maslovian rung. The other mechanical job necessities suggested are also solid.
What is missing, it seems to me, is PURPOSE. Might it be possible to elevate the role of retail in our quest for happiness, fulfillment and the greater good? Or is retail doomed to be a job until you find something you really want to do? I hold onto the belief there is more. We have to look higher.
There are a lot of people being paid extremely well who still lack joy and fulfillment. True, being rich and miserable is better than poor and miserable. Retail’s challenge is to put all the ingredients together: purpose, pay, passion, performance and, ultimately, profitability. If I could have made those words cyclical, I would have.
I have spent almost 40 years focusing on hourly hiring. Until this year, I have said that recruiting hourly employees is marketing with a rotten budget in the retail and hospitality space. All that has changed; look at the money that the leaders are now spending in the retail and hospitality sectors. They have gotten the message, and things are changing. Now Hiring signs are giving way to signs that could now say, “Life is too short not to work someplace AWESOME.” Benefits are changing. Scheduling is changing, Training is changing, Management has got the message, and they are beginning to recognize that employees are investors. They are deciding on how to invest their time. If they don’t get the return, they are ready to find a new place to invest.
The tale about retail is, at least as far as frontline associates go, one that won’t have the happiest of endings.
Yeah, sure, there may be instances where public-facing staff (like me) may be cherished, well-paid, and who would have their own vested interest in the companies they work for. Which will play out in honest brand loyalty and support, and used to bring in customers. But the greater percentage of this work force will eventually be replaced any automatic means. Simply because transactions, at their most economically efficient for the owners (big or not-so), need not “human” interference.
Cold as that may sound, I know well how visitors want people like me as mere facilitators. Not persons, with personalities. Even I cannot think of any place—other than a local bar where a bartender is a friend—where I feel the great need for personal interaction. Sure, some styling advice may come in handy at a clothing store (or inner department store area). But anywhere you are hearing “suggestions” smacks of up-selling, et al. So really, no thanks. We, the customers, can handle this ourselves.
Consequently, retail doesn’t have a problem with how it hires/recruits workers. And throwing money at it, through higher wages, will only make workers’ experiences worse: by having employers expect more sales in return. (Which is a lot like them expecting more pieces out of the same-sized pies.) Actually, the problem is the solution itself: that a substantial human retail work force is mostly becoming irrelevant; and places where it is not are harder to come by. But — like finding a diamond in a played out mine when you do.
The biggest impediment to hiring is the nature of most retailers in offering a transient job rather than longer-term options to grow into the role. There are exceptions however. I love to use the Costco example. Why? Because they treat their employees well. Lots of perks, benefits, recognition, and even career pathing within the store and the corporate environment. And of course, decent enough pay to make a living for a small family.
Although turnover is a major challenge at many retailers, the best retailers are able to hold onto their employees. What happens then? You no longer have cashiers assistant but a senior cashier with experience in managing the store when the GM is on vacation. The retailer able to reduce turnover will have more efficient operations plus lower overall costs in the long run — even with higher salaries.