The landscape of work as we know it is shifting. Today, it’s about people rather than processes.
Human resources executives across all industries feel this shift. But in the retail industry, the challenges facing HR teams are even more complicated. High turnover rates, the need for seasonal workers, multiple store locations, a global workforce and hiring, onboarding, and training across departments are just some of the complexities facing retail HR professionals.
Here are the six top challenges for HR in the retail sector:
Challenge 1: Attracting and Keeping Top Talent
According to recent research conducted by SHRM in collaboration with Globoforce, 2018 marked the third year in a row that retention and turnover were named as the top challenge by HR professionals, with recruitment coming in second.
In retail, high turnover is costly. According to research from Mindfield, the average turnover cost for a retail employee is between $6,000 and $7,000. Turnover can also be detrimental when it comes to training and succession plans.
Retail HR departments need to attract employees and incentivize them to grow with the company by establishing an employer brand that appeals to new generations of workers.
Challenge 2: Balancing Hiring and Training
Staff training is already a complex undertaking when you consider the high rate of turnover and the constant influx of new employees.
But this problem gets amplified due to the logistics of the retail industry which include:
- Training across state lines, time zones and countries.
- Training for different departments ranging from corporate management and in-store associates to employees in warehouses and distribution centers.
While training is crucial to an organization’s success, finding the right balance between training and hiring is tough for HR teams. You have to do a great job of training new employees to reach your goals, but once an employee is trained, they become more valuable in the marketplace and have more options. So HR directors and managers need to focus on employee engagement to keep trained retail team members on board.
Challenge 3: Navigating Evolving Technology
Since so much of the consumer lifecycle is now online, there’s a huge demand for retail HR teams to hire tech savvy employees. Today’s retail employees need to understand how to use tools including:
- Electronic inventory control systems
- Central CRM databases
- Point of sales systems
- Statistical forecasting systems
- Analytics tools
- Email and social marketing platforms
These roles require more skills and sometimes better pay. Retail HR teams are embracing these technologies in pursuit of efficiency and are adapting hiring and training practices accordingly.
Challenge 4: Managing and Securing HR Documents Across Retail Locations
The retail industry is a veritable revolving door of employees. The turnover rate for part-time hourly store workers is 81 percent, and it’s 15.6 percent among corporate employees.
Keeping track of sensitive employee paperwork and documents across store locations, state lines, and even other countries comes with its own set of complications—including compliance with local, federal and state regulations. More and more businesses are turning to digital storage solutions for fast, secure, compliant access to all employee documents in the cloud. These systems should sync with HRIS or HCM systems to make integration easier.
Challenge 5: Creating Meaningful Employee Experiences
For many of today’s retailers, success is driven by an engaged workforce, and this hinges on building a meaningful culture.
According to the Harvard Business Review, high-turnover companies who focused on developing high-employee engagement practices reduced turnover rates by 25 percent.
Finding the time to increase employee engagement initiatives is a struggle for retail HR teams. So putting systems in place to reduce paperwork, stay audit-ready, and easily connect on a virtual level with workers all over the world are vital to building engagement and connection across both corporate and store locations.
Challenge 6: Employee Theft and Misconduct
The retail industry hires many part-time and temporary workers. The transient nature of the retail business makes it easier for employees to steal products. In fact, according to a National Retail Federation survey, 30 percent of retail shrink is the result of internal theft by employees.
In addition to theft that costs companies billions of dollars each year, employee misconduct such as sexual harassment, discrimination, and safety issues can result in huge headaches for retail HR executives and potential lawsuits for companies.
To avoid employee theft and misconduct, employers put specific policies in place for how retail workers—from store employees to corporate operatives—should conduct themselves. Additionally HR teams devote time to workplace training to ensure that the expectations around safety, sexual harassment, and safety compliance are fully communicated and understood. Tracking policy acknowledgments and mandatory training completions can be automated with the right systems to create visibility and efficiency.
Fixing HR Challenges in the Retail Industry
The problems facing HR teams often come down to two key things—time and resources.
HR executives, directors, and managers need to free up time to devote time to building employee engagement programs, developing the right training initiatives, and hiring the right team members.
Getting bogged down with employee paperwork, document retention schedules and compliance audits can make it difficult for HR teams to make a positive impact on their businesses.
Embracing technology systems and automating essential processes is key to freeing up retail human resources professionals to focus on the company initiatives that matter.
Nicole Hart is a seasoned global HR leader with over twenty years of experience. She focuses on organizational design, change management and workforce planning at Access which has 1800 employees in over 50 locations.