Retailers today contend with a number of challenges: tense e-commerce competition, EMV compliance and evolving logistics needs, to name a few. But one issue that stands to have lasting ramifications for companies of all sizes is the shrinking hourly labor pool. Retailers have long postponed addressing labor supply problems, but that tide is beginning to change dramatically.
From November 2014 to November 2015, average wages for U.S. hourly retail employees increased nearly three percent. In that same period, the industry added more than 284,000 jobs. Rising wages and ample opportunities mean that employees no longer feel forced to settle for subpar working environments – and many are already exercising their ability to leave for better alternatives.
According to WorkJam research, 34 percent of service companies (retailers included) report a quarterly turnover rate of at least 26 percent for hourly staff; one third of employers feel this rate has grown in the past two years.
As retailers grapple with exceedingly thin margins and rising customer expectations, retaining talent is integral to maintaining profitability. Given this signal of hourly worker discontent, retailers need new strategies for fostering employee-centric environments that encourage staff engagement and long-term loyalty.
Four keys to generating hourly worker engagement
Incenting hourly retail workers to stick around takes more than the occasional soft perk. Retailers must be willing to change significant aspects of their company cultures and operations in order to create meaningful employee engagement. Here are four places to start:
More communication, and community spirit: The majority of retail worker communication happens at the store level, whether it’s in-person conversations with colleagues, reading all-staff documents in the break room, or occasional texts from managers. Rarely is there direct dialogue between corporate offices and frontline workers.
Retailers must pursue new communication methods that make hourly workers feel like they’re part of a larger community, not just bodies filling shifts. Businesses should look for technology that cuts through the noise prevalent in so many stores, making it easier to facilitate interactions between headquarters and the retail floor. This not only helps shed the perception that corporate offices are faceless, mysterious entities, but also creates a sense of camaraderie that should deepen staff’s ties to the overall company.
Fair and inclusive scheduling: The recent retail worker disengagement problem has been attributed, in part, to the industry’s reputation for inflexible, last minute scheduling. To mitigate costs and compensate for tight margins, retailers have been forced to perpetuate outmoded scheduling tools including static paper charts and software that only captures business inputs without accounting for employee shift preferences. As a result, workers struggle to balance personal and professional commitments – and it’s difficult to be engaged or invested in an employer that seems to harbor little respect for its associates own time.
Retailers can allay these pains by embracing technology that simplifies schedule maintenance. Supervisors need tools that can collect individual employee shift availability in one place (rather than having to piece together written notes, texts and week-old conversations), and integrate that information into the scheduling algorithms alongside forecasted store traffic and other operational factors. Businesses should also look for platforms that give employees more autonomy over their schedules, either by picking certain shifts or swapping them with coworkers directly, to empower staff and lighten managers’ loads.
Reciprocal feedback: Problematically, most retail store feedback flows in one direction, from managers to hourly associates. These employees, during their official evaluations or otherwise, have few chances or channels for providing valuable feedback from the frontlines about the store, the customer experience and their managers.
A vital part of engaging employees is showing them that the company is invested in their long-term development, and that – even at the hourly level – they have the power to affect change within the organization. Employers should implement accessible platforms that serve as safe spaces for workers to reach out with questions, concerns or ideas for strengthening store processes. In retail, sales associates are a company’s first line of defense – and innovation – when it comes to identifying opportunities for operational, marketing and customer service improvement. Encouraging their ideas can yield significant business results, aside from being a morale boost.
Customized training and recognition: Training programs have been a mainstay of nurturing workers, but this is another area where some retailers are cutting corners. With tight budgets, many stores reuse training manuals and onboarding binders, or rely solely on manager shadowing to bring recruits up to speed. In-person training is an important way to develop relationships among staff, but it can’t be the only option available given that retail managers’ time is stretched so thin. These manual strategies can lead to inconsistencies across employees or store locations and make it difficult to verify each employee’s progress over time.
As it is, most supervisors only sit down for annual or biannual reviews with their direct reports, and most of the criticism they offer skews toward the generic, devoid of concrete suggestions for how individuals can improve, or what their career path options are within the organization. To bolster in-store training and satiate employees’ demands for more technology, retailers should augment in-person instruction and evaluations with digital resources. Housing training materials in online portals and mobile apps frees employees to structure their own professional development. Integrating technology offers managers a better view into their staff’s growth, helping them instantly recognize employees for completing training modules or earning certifications. With these insights, managers can weave detailed profiles for each worker that can inform individualized performance feedback and shift assignments.
Hourly retail workers are beginning to enjoy more bargaining power over their own careers as the American labor market tightens. With wages rising and new jobs opening up, employees aren’t compelled to stay with organizations that don’t provide schedule flexibility or professional support.
For employers, fostering staff engagement isn’t as easy as offering store discounts or hosting annual worker appreciation days – it takes significant operational change. Eliminating the disorder that surrounds hourly employee scheduling, training and communication, however, doesn’t only benefit workers. It also liberates managers from tedious administrative tasks, letting them devote more time to strategic projects and nurturing relationships with their staff.
As industry competition intensifies and labor issues become more severe, promoting an employee-first culture should be a priority, not a perk.