The people challenge

For years industry experts have predicted that retail hiring and retention would become challenged by a generation of younger workers who don’t view retail as a sexy or rewarding career.

Guess what happened?

As DSN reported in its cover story in June, retailers are now faced with this dilemma, in the midst of an exceedingly tight job market resulting from a strong economy.

And, the battle for workers has become even more intense than we previously thought. How tight is the job market? Consider The New York Times headline about the recent national jobs report: We Ran Out of Words to Describe How Good the Jobs Numbers Are.

Even as retailers across channels focus on adapting corporate workforces for shifting technologies, too often there’s been less emphasis on frontline employees, from store associates and managers to district managers. These are the people that most impact customer experience.

The news isn’t all bleak, however. We can now point to examples of retailers making innovative moves that will likely support hiring and retention. These include compensation and benefits increases that came in the wake of corporate tax cuts. Here are some key examples of retailers improving offerings for associates:

  • Paying more:Walmart, CVS Health and Target are among companies that have raised minimum hourly pay for employees. Target, for example, advanced the hourly wage to $12, with a plan to advance it to $15 by 2020.

  • Offering benefits:Hy-Vee recently began to offer health insurance and other insurance benefits to some 58,000 part-time employees — including for disability, vision and group life.

  • Supporting dducation:Kroger and its subsidiaries are offering associates an employee education benefit of up to $3,500 annually — $21,000 over the course of employment — toward continuing education and development. This was announced along with a range of other improvements, including a more generous 401k benefit.

  • Providing training: Walmart last fall launched a program in the Jacksonville, Fla. area to boost training and career advancement for the region’s retail industry. The program teaches a range of skills and awards a certificate from the National Retail Federation, all part of an effort to boost the pool of potential managerial employees.

Speaking of training, some 32% of employees across all retail sectors say they do not receive any formal training, according to a recent report by training software company Axonify that was cited in our sister publication Chain Store Age. The findings pointed to the importance of ongoing training.

For now, retailers pursuing innovative employee programs will gain competitive advantage. In the long-term, however, these likely will become minimum requirements in the effort to attract and retain associates.

Even with all these efforts, more will be needed. Jose Tamez, managing general partner at Austin-Michael, an executive search and outsourced contracting firm serving retail and wholesale, who is a longtime expert on this topic, pointed out the importance of an additional solution. It’s a strategy that doesn’t attract headlines but is just as vital: the personal touch.

He’s referring to the need to foster more personal interaction between managers and employees. This includes one-on-one coaching, mentoring, providing frequent performance feedback, and laying out pathways for progression.

The most innovative kinds of human interaction “are not happening in the main,” he said.  “This turns average employees into good employees. It’s not just about throwing more money at them.”

Why do this? It leads to retention, more loyalty, higher productivity, and better customer service, Tamez said.

 Are there certain types of retailers that have an advantage in doing this? In theory, it might be ESOPs, or retailers with unique people cultures, but in reality this isn’t off limits to others, he said.

So, you might ask, in the year 2018, when the retail world is retooling for e-commerce, algorithms and robots, is it still crucial to invest in the human element? Is operating a successful retail workforce still reliant on meaningful interaction between managers and employees? Is this a business differentiator?

Yes, yes and yes.

David Orgel is an award-winning business journalist, industry expert and speaker who was the longtime chief editor and content leader of Supermarket News. He is currently the principal of David Orgel Consulting, delivering strategic content and counsel to the food, retail and CPG industries. To read last month’s column, click here.