Biggest HR challenges for Retailers

The retail sector has had its fair share of challenges, even pre-pandemic. It’s an exciting sector that’s constantly evolving and adapting: navigating technological developments and changing consumer behaviours.

There has been a frightening number of bankruptcies, and the retailers that will survive and thrive are those who focus on their people, agility and their ability to adapt and change. To achieve those goals, HR are faced with some of their biggest challenges.

Retail is a big employer and according to Retail Economics, retail is the largest private-sector employer in the UK. Its essentially a people business, where the gender split is 58:42 women and men, with 50% of retail employees working part-time, and just under a third of these workers are under the age of 25 (The Retail Appointment).

Retailers also need to deliver on customer service. Winning footfall means exceeding customer expectations rather than simply meeting them. Retailers rely on customers coming back, word of mouth, advocacy, as well as customer driven content about their brand. But you can’t offer a great customer experience if your staff are not motivated, not appropriately trained, or not enough staff scheduled to handle peaks and troughs.

On a positive note, there is pent up demand within the sector, which means the outlook for retailers who are ready is more positive. The Retail Research centre is forecasting growth in sales of +2.4% in 2021 and +1.8% in 2022.

Attracting and keeping talent

Depending on what research you read the staff turnover rate in retail, prior to the pandemic varies somewhere between 15% and a heady 70%. Add a potential 31% of UK jobskeers would now considering working in social care. That means the competition for talent is higher than ever.

One of the biggest HR challenges in retail is how to attract and keep staff long term. There are some significant benefits to overcoming the talent challenge:

  • decreased time spent recruiting
  • reduced financial costs of hiring
  • reduced cost of onboarding and training new employees
  • carrying less staff who are not yet fulling contributing members of the team

Loyal employees are happier, and generally perform better. All of which positively impact operational efficiency, margins and contribute to profitability.

Staff engagement

One way to tackle these HR challenges is to increase employee engagement utilising digital tools. Empower staff with HR self-service tools along with training and development. Disengaged staff lead to higher turnover and lower customer experience. Lack of recognition can also lead to disengagement. Challenges that will be overcome with automation that’s activated by apps on mobile devices.

Workforce planning, scheduling and staff rotas

The retail sector workforce is unique, it requires a mix of part-time, full-time, casual, and seasonal staff. Plus, head office employees, distribution, admin, customer support and of course Human Resources and everything in between. As a result, both workforce planning and payroll becomes incredibly complex.

Managing a workforce has always been a challenge for retailers. Getting the right balance of staff, in the right location for the predicted level of customers is not easy. Add in likely footfall based historical sales and data, predicted sales, weather forecast (dependent on location will affect customer visits), day of the week, public holidays and big events. It’s a real challenge as businesses do not want to over-staff, as that hits margins as well as staff morale. However, get it right and both your customers and your staff will be happy.

With more and more regulations piled on retailers, the broadening duty of care is an increasingly difficult task. Health and safety, training, WTD, additional shifts, different rates of pay for shifts and roles, the list is endless. This all adds up to a significant HR challenge, as failure to get it right means incorrect pay for staff, needless increase in overhead costs. And getting it wrong will directly impact your staff retention rates.

Implementing workforce management software as part of your HR processes will give you a single view for HR and managers alike. You can save over 50% of your normal scheduling time and give your staff more transparency. You will have a single view, enable decision makers to identify staff needs more easily and facilitate shift swapping for your people. Another tool that empowers your people, helps with engagement and aids staff retention.

Getting Payroll right

Payroll is a real headache for retailers. A complex business means payroll complexity. An error with salary can be extremely demotivating for employees. Staff who are underpaid or who have to wait longer than they expect for earned wages will lead to real negative repercussions. Staff engagement, staff retention along with customer service will be affected. Plus, the administrative burden and resources needed to rectify the mistakes.

Retailers want to set and forget their payroll, which is not easy to achieve. With a mix of employee contracts and types, zero-hour contracts, franchise, workers swapping or changing shifts, working variable hours means getting pay 100% accurate is very challenging. Staff expect their employer to pay the right amount and at the right time. Errors in payroll will directly impact your people as well as your reputation as an employer.

A single source of truth – data and reporting

Most of the HR challenges faced by retailers are not simple to resolve however implementing an HR software solution or human capital management solution can make a significant difference for retailers. This will reduce admin, improve workforce scheduling, simplify payroll processes and increase accuracy. You’ll also gain better insights that were not previously available – a single source of truth, with real time data. A single source of truth for all areas of the business, its employees, managers and leaders. Complete visibility.

The lack of visibility and getting consistent data is a real challenge not just for HR teams, but for the whole business. A single source of truth and real-time data provides great insights and aids the workforce management process, helping retailers understand who has worked what shifts, who is trained and available, trends, sickness and absence profiles… the benefits are endless.

This data can help with forecasting and improving overall labour costs, manage compliance and diversity. This also feeds into staff engagement visibility as well as retention data. You will be able to provide accurate and consistent information across the business, update workers and plan

Productivity

The pandemic created exponential challenges for retailers’ when it comes to productivity and operational efficiency. Recovering customer footfall and managing in-store social distancing has put pressure on margins. HR are challenged with improving productivity and operational efficiencies: to build operating models that deliver for the business. Build resilience, agility and sustainability across the business is what is needed.

The challenge is to create and implement, whilst being nimble and agile too – not easy. However, implementing technology and process is really easy that burden. With 360° visibility, decision making is faster and smarter, innovation and change is easier and faster. The business can respond fast, and HR technology means you take your people with you. This is not a siloed approach:-

  • Flatter organisational structure, with devolved delegation and decision making
  • Technology in the hands of your people, give them visibility and the insights they need
  • Easier communication across the business, whatever shift pattern or role
  • Data-driven HR and decision making
  • Smarter utilisation of your people
  • Removal of over or understaffing for any shift
  • Empowered staff are more efficient

HR leaders are riding the wave of accelerating digital transformation and the business case is easy: improved productivity, increased staff retention and greater operational efficiency.

Communication with dispersed and remote staff

We’ve all witnessed the physical changes retailers have needed to make to protect their customers and their staff as a result of COVID-19. However, there is an even great emphasis on health and safety and the wellbeing of staff. Wellbeing is a key to attracting and retaining staff.

The retail workforce is dispersed in different locations, making communication challenging. Being able to communicate with staff easily and in real time is a business imperative. Whether its an update on procedures, health and safety, changes to shifts as well as the lighter side of internal comms is essential.

Employee flexibility and work-life balance

Flexible working is more prevalent in some industries than others. Historically retail is not known for its flexibility and accommodating work-life balance for staff. However employees want flexibility to match personal needs. Companies that offer this benefit are better placed to attract and retain talent. The HR challenge is to find the balance for the business and offer the flexibility for your people. Its quite the conundrum.

Retailers can offer a variety of flexible working that accommodates working parent to fit with children at school, as well as evenings and weekend shifts for students and parents alike. Developing a flexible workplace environment overcomes a number of challenges in terms of business need and employee need.

Balancing operation and employee needs in a digital scheduling system that’s accessible 24/7 is the goal.

Using HR technology to solve the problem

Retail HR and payroll teams have a pretty long list of challenges to overcome and many are turning to technology to overcome the problem. Ensuring payroll information is correct in different locations, managing flexible shifts and workforce, rota and shift scheduling, time and attendance is a real headache if you are relying on manual processes. HR technology give access to everyone, with what they need via any device at any time. Technology is removing the burden, eliminating error and repetitive tasks and is empowering your people.

Retailers are embracing technology to empower and enable their staff. After all retail is a people business.

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