Getting Retail Employees to Stay
By Tom Ryan
Nearly half of retail employers (48 percent) say it’s harder to retain employees this year compared to last year, according to a recent CareerBuilder.com survey. A tight labor market and longer retail hours are seen as contributing factors.
The survey showed that while 62 percent of retail employees report they are satisfied with their current job overall, 69 percent are either actively seeking or would be open to a new job if they came across one. Nearly three in ten (28 percent) retail employees plan to leave their current jobs within the next year and 46 percent within two years.
Among the other findings from the surveyed retail employees:
- 54 percent claimed their workload is either heavy or too heavy;
- 44 percent
were unsatisfied with their pay; - 36 percent were dissatisfied with the training
and learning opportunities; - 34 percent were dissatisfied with career-advancement
opportunities at their current position; - 33 percent were not satisfied with
their work life balance; - 27 percent felt they were overlooked for a promotion
at their current job.
Among the retailers in the survey, 42 percent cited the inability to find qualified workers as the biggest impediment to hiring more people. Increasing workplace flexibility (cited by 34 percent) was the number one way retailers were looking to retain employees. Also ranking high was increasing wage/salaries (32 percent), benefits (18 percent) and bonuses (16 percent).
This survey was conducted online by Harris Interactive among 90 retail employers (at least somewhat involved in hiring decisions) and 468 retail employees (full-time; not involved in hiring decisions) ages 18 and over within the U.S. between February 15 and March 6.
“Turnover isn’t a new challenge for retailers,” says Rosemary Haefner, vice president of Human Resources at CareerBuilder.com, in a statement. “However, as the labor pool continues to shrink and retailers feel the pressure from consumers to keep doors open longer – even 24 hours a day – many retailers are embracing more competitive hiring and retention programs.”
Ms. Haefner recommends the following tips for retailers to improve recruitment and retention efforts:
Break through the clutter – “Treat your job posting like a candidate treats a resume. Communicate an employee brand that is accomplishment-based, highlighting growth and stability, work culture, career advancement, etc. Include testimonials from current employers and showcase examples of employees who have worked their way to the top.”
Get specific – “The more definitive you can be in a job posting, the better your chance of attracting qualified candidates. Everyone says competitive salaries and benefits – define what that means in your organization. Outline what flexible schedules and work/life balance programs entail, specifically address the training/courses available to employees in the first quarter, first year, etc.”
Check your workplace temperature – “Measure employee satisfaction levels regularly whether it be through informal discussions or organization-wide surveys. If necessary, create action plans and implementation dates with employee input and deliver on what’s promised.”
Discussion Question: Do you think employee retention has become more difficult? If so, what do you think is making it tougher? What do you think are some the best methods to improve recruiting and retention efforts for retailers?
THE ANSWER TO THE RECRUITING SELECTION AND RETENTION PROBLEMS IS SIMPLE: LEARN FROM THE BEST AND THEN…
JUST DO IT!
Thousands of articles, hundreds of books and countless research project have been written about this subject. All of them come to the same conclusions. Most retail organizations look at their frontline workers as a disposable commodity that is easily replaceable.
Now that we have entered what I call “the perfect storm,” will this resource have unlimited availability?
Let’s look at three converging trends.
1. The growth in the workforce is less then the needs for workers. (In many jobs we have negative unemployment. Less workers who are qualified to do the job then the number of workers needed.)
2. The change in the nature of work.
3. The ease at which workers can now find and change jobs.
Everyone above has talked about the solution and there are a lot of companies that have figured out how to recruit, select, and retain the workforce they need. Those same companies have become the leaders in their field and continually produce better returns for their owners, employees, and customers.
Now the question is asked, how do they do that? That is also not a secret and I think all of us know the answer.
Become a place where people want to work and you will never have a recruiting, selection, retention or productivity problem.
I do not have time to go into all of the steps, but make it simple; sum it up in one line and it is the thing all winning organizations do.
They don’t just talk about treating people fairly, good management, great training, good pay, opening communications…the list goes on….
THEY JUST DO IT!
Retail is a great field with lots of growth and opportunity. Human Resources practices are, as a rule, underwhelming. Yet we have the example of Container Store, Starbucks, Marriott, and others who consistently rank high as places to work.
If you want your employees to stay with you, here are some fundamentals to consider:
1. Learning environment. Encourage your associates to learn about your products, vendors, technology used in retail, stores, customers, direct channels, retail real estate as well as your policies procedures, and practices. Exploit the Internet for that. Build an Intranet to facilitate learning and information exchange.
2. Career path. Show new associates how they can progress from Associate to Department Manager, from Assistant Manager to Manager. Demonstrate your commitment to your people by providing examples who climbed the ladder quickly and effectively. If you must hire outside, explain why you made this move to the internal people who were also considered.
3. Reward. Develop incentive packages for every level where they are paid additional when success is achieved. Be generous with stock options. For companies that have gone private, develop a program that reward employees in the event that the entity goes public or is sold.
4. Schedule in advance. Let your store associates know what their schedule is a month in advance. This allows people to work two jobs if they need to. Common practice in retail is to let people know on Friday what their hours are for the next week.
5. Recognize the intangibles. Acknowledge associates for doing the little things well. This includes basic customer service skills and working well with co-workers.
6. Help them with travel. Many retail associates live far away from the top-end malls where they work. In an era where a gas tank fill-up might cost %50, you need to pay at least 1/2.
7. Healthcare. Develop a competitive health care plan that associates can afford.
8. Measure employee loyalty. Take surveys that measures employee loyalty. Analyze retention cycles. Take remedial action in districts and regions where retention is weak.
9. Enhance the workplace. Every quarter make some measurable improvement to the workplace that will appeal to the demographic that you typically hire. Take suggestions from your associates and honor the suggestions you implement.
10. Have fun. People like to laugh. The environment in most retail stores is very somber. Lighten it up. Celebrate success. Celebrate the workplace.
While workplace flexibility is an obvious draw, in the long run the best way to retain good people is to convince them that the industry does offer an interesting career with a decent paycheck. With that in mind, stores should provide training and offer workers the opportunity to advance through industry-related education.
Retailers need to treat their staff like professionals and also provide more training opportunities. Flexible working hours will be of great benefit and will breed commitment.
I agree with Bill Robinson; great ideas. Employee turnover in retail is certainly the retailers’ fault. There is no creativity here. Retailers don’t spend enough time strategizing on how to reduce turnover and build a solid team. Take an example from Southwest Airlines. Make work fun, flexible and rewarding. A few ideas:
Go for alternative employees with flex hours. Housewives that come in after dropping kids at school and are quality workers until they have to pick them up later in the day. Older retired employees that want to work three days a week instead of seven. Get creative, have fun, reward, communicate and don’t treat the clerk as a drone.
Second, understand what motivates the new generation college student. It’s not the loyalty generation! They want mentoring for the future, skills training, stock options, flexibility with time off, etc. Recently, I was talking with a manager. He was complaining that he had to let his best sales clerk go. Why? The sales clerk wanted off for spring break! Obviously, the retailer lost in that deal. The employee went on spring break without fear of having another retailing job within days of his return.
Of course employee retention has become more difficult. The unemployment rate for people 25 years of age and older with at least a bachelor’s degree is just 1.9%. Retailers will increasingly have to scramble to find qualified employees who fit their needs, and then make competitive offers to get the people they want.
What are some the best methods to improve recruiting and retention efforts? Well, as the article notes, you have to think about making each hire a good fit for both parties. I think you have to offer a chance to learn, and opportunities to advance. Most people don’t feel their employers take advantage of the skills they have, or recognize them, or reward them for their efforts. Being a employer that does these things give you a tremendous advantage is the battle for talent.
Most of all, you have to develop your own talent. Indeed, many retailers now have training programs where recruits get deeply immersed in the store’s culture. Hires that go through such training are more likely to stay on longer. You may not want or be able to retain everyone, but you have to act as though you do.
If retailers were required to disclose the average number of paid employees each week versus the number of W-2 forms they must file each year, investors would be shocked at the staff turnover. Nonunion clerks and sales staff turnover is commonly over 100 per cent. Turnover among the most recently hired is usually a multiple of the rest. If most of the turnover is among those hired in the past 90 days, then recruiting, screening and training is probably “sink or swim.”
It should not be a surprise that retail turnover is as high as it is. Most retail stores are boring and it is not a fun place to work. There are exceptions: HEB Central Markets, Nordstroms, and Wegmans come to mind. However, lack of job training, failure to provide insights to customer relationship management, and no road map for advancement, all add to the issues. Time and again we see management cut the hours, or lay off their most experienced store personnel in an attempt to help the bottom line.
There is a growing awareness that Shopper Centric Retailing gets to the heart of the problem. The most valuable assets of a retailer are their store personnel who interact, or who should interact, with their customers. It starts with management knowing what type of personality fits their banner. Then, providing them with product information, job training, and explaining the importance of customer relationships can make this position very rewarding.
Foe employees to stay with a company they have to see future, i.e., they have to feel they will get ahead if they stay. Employees will tend to leave when they see no future. Therefore, the challenge for the employers is to create conditions that will help employees get ahead. In an article “Creating the Living Brand” in the Harvard Business Review of May 2005, the authors clearly outline how two retailers, QT and Wawa, recruit, retain and get the best out of their employees. Therefore, recruiting and retention problem can be licked!
Retailers set their own rate of turnover. If it’s 100%, it’s because the retailer wants it to be 100%. Some businesses like Publix prefer a low turnover model and offer premium pay and benefits. This works for them. Others, like Wal-Mart, have a more disposable workforce. Their model does not require experienced or skilled employees who can offer better customer service. Any retailer whining about high turnover has only themselves to blame.
This is an issue that’s been a problem for our industry for many years. While some retailers continue to struggle with turnover problems others have discovered if you hire the most qualified people; pay them well; treat them with respect and create a working environment where good people feel wanted they will stay and serve the store’s customers well. Retailers like Nordstrom, The Container Store, Wegmans Supermarkets, and others have far lower employee turnover rates because they understand these simple but powerful ideas.
Many companies in our industry have long done a poor job of recruiting good people and a poor job of understanding that today’s workers have a different view of their work life. When a company like Circuit City announces to the world that they’re going to lay off several thousand of their best-paid, most experienced employees to cut costs it is quite obvious they don’t understand that today’s competitive retail climate is about providing customers with a great experience from knowledgeable, attentive associates. When cost-cutting negatively impacts the customer’s experience, the company is going in the wrong direction.
We’re assuming this question is about hourly and lower-salaried workers, right? Mostly union members? Not top executives? If so, Wow! The figures reported in this survey are extremely positive! Are we sure the numbers weren’t transposed? If a survey were taken among Hollywood waiters and waitresses regarding their intentions NOT to become actors, the numbers would be similar.
This goes right back to the discussion we had some weeks ago about how top management sees the folks working at the store level.
It’s very hard to keep good people if they know management thinks of them as monkeys. And we want college graduates in those roles?
It’s the usual disconnect: People are our greatest asset until it’s time to pay them.
The first thing is to hire the right employee. Too many retail employees are hired because the store needed a warm body. Drop by the applicant’s place of business to see them in action. This will tell you more than any interview.
After you hired them, the employees need training on a regular basis, not just the first day. Give them a mentor to help them and report their progress weekly.
Also, in many retail stores the only time employees hear from management is when they do something wrong. I would say 75-85% of a manager’s conversation should be positive. Catch the employee doing something right and let them know you appreciate their effort.
Lastly, make work fun. Yes, a job must be done, but making the job enjoyable will improve their productivity and [keep them from] looking for another job.