Hiring the Right People at Retail Is a Challenge. Here Are Some Tips.
Hiring and retaining good people in a low unemployment market is not easy. But for retailers, it remains very important.
One proven advantage brick-and-mortar specialty stores have over online competitors is being able to have a personal interaction with their customers. A quality experience with a trained employee can make for loyal customers who will not only come back again, but who might also tell others in person or through social media about the great service they received.
Sixty-five percent of consumers say that the quality of customer service is a factor when deciding where to make their purchases, according to a 2019 consumer survey by the International Council of Shopping Centers (ICSC), and 67 percent say that good customer service encourages them to stay longer and/or spend more money.
Hiring Challenges for Retailers
Retailers are having an increasingly difficult time finding, training and keeping top-notch, experienced employees. Here are some key issues that they are dealing with.
- With the low unemployment percentages today, the pool of eligible candidates to hire is smaller.
- Hourly wages need to be high enough to attract candidates. State and city minimum wages are rising and to attract top talent, employers need to pay more than the minimum. Also, while many retailers rely on using part-time workers (and not having to cover the cost of benefits), today more people are demanding full-time hours and benefits.
- Margins are tighter for retailers due to low prices from online shopping competitors. This means there is less available cash to pay for the quality help these stores need.
- Customers expect staff to be knowledgeable. But attracting and retaining good retail staff long term is a struggle. Management becomes frustrated when they pay for the right people, take the time to train them, and then see them leave in six months-or less.
According to the DailyPay Blog the average annual turnover rate for hourly employees in retail is 65 percent. For associate level positions employers can expect to pay 16 percent of an annual salary to recruit, hire and train a replacement worker. For an associate who makes $10 an hour, it would cost around $3,328 to replace them. For a midrange position like a manager, it can cost more than $8000.
So what’s a retailer to do?
Hiring Tips for Retailers
The goal for retail management is to attract, train and retain valuable store associates. Here are some tips for doing it right.
- Improve the recruiting process. Properly vet your candidates. Make sure they are enthusiastic and will be dependable. Are they willing to learn and take on more responsibility as they mature? Look at some alternative ways to find new candidates, such as outdoor clubs, or sports organizations.
- Review training programs. The use of videos and manuals to train new associates is an option, but much of the information is not retained. One on one training, and having a designated mentor for ongoing support can help build a team feeling.
- Guarantee employees enough hours. Many associates leave a job because they cannot get full time work, or enough hours part time. Companies that are able to guarantee hours, have more full-time employees and consistent work schedules can retain more employees long term.
- Implement incentive programs that encourage employees to stay. This could include: a bonus program that pays an associate on each anniversary of their employment; increasing PTO for longer term staff; tuition assistance; backup childcare; merchandise discounts; health club membership; ski passes; or discounts for sporting events.
- Promote from within. When staff sees fellow employees promoted into management, versus bringing in someone from outside, it shows that there may be an opportunity for them.
- Make sure your pay is competitive for the market you are in. New hires should not have to wait too long for a raise in pay. Be clear on how long it takes for each increase.
- Make sure employees know they are valued and respected. It is important that associates know they have a process to give feedback, or ask questions on working conditions, policies and merchandise they sell.
Brick-and-mortar stores need to leverage the advantage they have in being able to interact face-to-face with their customers and give consumers a quality experience. Stores that are understaffed, have untrained employees and are dealing with high associate turnover will push more consumers to online shopping. Those who change will have the best chance to survive.
Implementing programs that enhance both the hiring and retaining of quality employees can be expensive, but ultimately worth it. n
Ron Menconi was SVP–merchandise and marketing for G.I. Joe’s for more than 10 years. He is currently president of Menconi Consulting, which works within the sports and outdoor industries at retail and wholesale. He can be reached at firstname.lastname@example.org