"Your biggest challenge isn't technology, innovation, or even leadership. It’s finding, hiring and engaging the right talent to thrive now and in the future. Make constant reset your friend. Upheaval brings about opportunities to rethink, reset, and restructure your organization."

- Johnny C. Taylor, President and CEO of SHRM

For retail HR leaders, the stakes have never been higher and the challenges have never been harder.

In the wake of the Covid-19 pandemic, retail employees are demanding more flexible and fulfilling work, better wages and benefits, and a higher standard of workplace safety. It’s why everywhere you look workers across every industry - from tech to healthcare to manufacturing and more - are giving their two-weeks notice.

Among the hardest hit by this mass employee exodus is the retail industry. The Washington Post reported that almost 650,000 retail workers put in their notice in April 2021 alone, and called it “the industry’s largest one-month exodus since the Labor Department began tracking such data more than 20 years ago.” In Zipline’s Labor of Love Report, we discovered that 42% of retail associates are considering or have already decided they are planning to leave the retail workforce after the pandemic.

Whether you call it the or the “Great Resignation,” one thing’s for certain: this is a time of reckoning for HR leaders. Retailers that want to take advantage of a volatile labor market will need to step up their recruitment efforts. Those that want to hold on to their people will need to develop better experiences for current employees.

That’s why we’ve pulled together this comprehensive guide: To help our retail friends navigate the HR strategy building process and set their teams up for success in a post-Covid reality. Here you’ll find statistics, trend analysis, case studies, and tactics to combat turnover and differentiate your brand in an increasingly competitive marketplace.

Ready to dive in? Let’s get started.

The case for a field-first approach.

A retailer’s CHRO (or similar HR executive) function is unique in that it usually spans oversight of two very different worlds: Headquarters and Stores. This means a retail HR executive needs to simultaneously balance the needs of an employee population that’s historically been co-located and office-based with the needs of another employee population that is completely distributed.

It’s important to emphasize just how different the retail headquarters employee experience is from the retail store employee experience. Store teams don’t sit at a desk all day reading emails, they don’t have access to the same amenities, and they may go days (or even weeks) without an in-person meeting with their boss. It then makes sense that a strategy that tackles the problems of retention and engagement among field employees would look different than a strategy with similar goals at HQ.

The recent shift to remote work (across all industries) has placed much of the focus on employee experience firmly onto headquarters-based employees. HR leaders are now tasked with preserving company culture as HQ employees work remotely, rolling out hybrid workforce models, and evolving their company value proposition accordingly. All of these important and necessary tasks can cause field-based employees’ needs to fall by the wayside.

So, why focus on improving the employee experience in stores? Simply put: because the financial benefits are staggering. Recently, World at Work broke down turnover in retail at a more specific level, and the numbers are eye-opening:

The cost of that turnover varies, too. For associate level positions, employers can expect to pay 16% of an annual salary to replace a worker. (that means for an associate who makes $10 an hour, it would cost around $3,328 to replace them). It costs around 20% of an annual salary to replace a store manager. The higher the turnover rate, the more a business’s bottom line is impacted.

Do the math, and it’s easy to see why addressing engagement and retention areas among your store employee population should be a key part of your business strategy.

Macro trends impacting today’s retail’s HR reality.

As HR leaders stand at the precipice of a massive shift in employee demands, it can help to look at the current macro trends in retail and ask yourself how your brand plans to address them:

Upskilling is a competitive advantage.

According to Gartner, 33% of the skills that were present in an average job posting in 2017 won’t be needed by 2021. (Source: 2020 Gartner Shifting Skills Survey for HR Executives). While this statistic applies across industries, it’s safe to assume that the percentage would be higher in the case of retail-specific job postings.

To boost profits post-Covid, retailers are "wringing more out of their stores.” A brand’s brick-and-mortar outposts aren’t just another point of sale now, but also logistics hubs for shipment processing, experiential forms of physical advertising, and even destinations for local events. Retail associates and managers now need to focus on developing other skills besides selling, like managing shipment logistics or developing strategic community partnerships.

The years of retail as a “dead-end job” are long gone. In recent years the brick and mortar retail store has become the perfect breeding ground for growing multi-faceted executive leaders of tomorrow. That’s because when brands truly optimize their stores (and they’ll have to in order to remain competitive), managing those stores is nuanced, complex, and the start of an exciting career trajectory.

For example: the manager of lululemon’s experiential Mall of America store isn’t just managing a P+L and tracking sales. They’re also expected to curate a shop-in-shop strategy, coordinate a holistic customer engagement plan with their in-store coffee shop, drive community partnerships that result in local press, and create a staff of brand evangelists who help that "halo effect" that all retailers need to reach their omnichannel goals.

A successful retail recruitment strategy in the new normal should highlight store leadership and store associate roles as opportunities to build covetable, corporate-ready skills. And a key part of any retailer’s Employee Value Proposition should focus on opportunities to improve current skills and gain new ones. It’s no secret that companies who provide ample training for their employees see a return on their investment through a more engaged workforce, higher recruitment rates, and lower turnover. By giving individuals who have traditionally faced barriers to college better learning opportunities, these companies have more successful diversity, equity, and inclusion programs too.

What this upskilling looks like in practice can vary, but gone are the days of hours-long training in a store’s back room, where associates sit in front of a computer and try to then retain vast amounts of product knowledge. For the most efficient and engaging training possible, HR professionals should seek out applications and platforms that support a “just-in-time” learning environment, where training content can be served up to associates right on the sales floor in the palm of their hand.

Turning around the turnover problem.

How much is retail turnover costing you?

See the example below to learn how much your organization can save with Zipline.

According to the National Retail Federation, the average turnover rate in the retail industry is slightly above 60% (compared to 19% across all industries.) That high turnover rate translates into more than 230 million days of lost productivity and $19 billion in costs associated with recruiting, hiring and training.

Put flexibility first.

Historically, organizations - especially retail teams - have been designed with efficiency in mind. But the days of regular schedules, clearly-defined job roles, and predictable traffic patterns are over. In their 2021 HR Priority Report, Gartner says: “Work design, focused for years on efficiency, has left many organizations with rigid structures, workflows, role design and networks that don’t meet today’s needs or flex with fast-changing conditions.” As a result, only 19% of HR leaders report that their workforce can effectively change direction based on changing needs or priorities.

It’s obvious retailers need to implement flexible teams in order to meet their customers’ needs. But what may be less obvious is the fact that building flexibility into organizational design strategy is key to meeting employee needs, too, and reducing turnover overall.

Here’s why: When your company’s structures and workflows are too rigid, your store employees suffer from the various effects of work “friction.” In plenty of stores, for instance, teams complain that they get overloaded with messages from different groups at HQ, each of them claiming that their ask is the most important. Why? Because traditional workflows have kept HQ teams operating in silos. Stores can do little but throw up their hands in frustration.

One key way to reduce this work friction is to move resourcing decisions closer to the end user. In essence, this means empowering your store teams to decide who tackles which tasks, and when. This approach ultimately unlocks greater resource mobility while simultaneously boosting employee engagement.

In order to move resourcing decisions down the chain to your store teams, you’ll need to give them two things:

1. Access to more information: Store teams carry out tasks more effectively when they understand the context behind it. Understanding the “commander’s intent” allows them to react quickly and correctly when they’re faced with uncertainty and need to make a decision in real-time.
2. Permission to make the decision: Unclear lines of authority cause confusion, and overly brutal ones cause the folks at the bottom of the pyramid to check out or leave entirely. Your employees in stores need at least some degree of authority to feel bought in – like they’re part of the solution.

Combat burnout before it starts by democratizing task load.

As an HR leader you know that from a financial standpoint, keeping PTO on the books is never a good idea. But from a wellness standpoint, unused PTO can be a sign of something even worse: a company’s burnout culture and high-stress environment. Unfortunately this type of culture is rampant in retail. Talk to any store manager or district leader and you’ll likely hear them lament about their lack of vacation time, even though these employees are usually in full-time, salaried roles with ample time off benefits.

So why don’t store leaders take time off? The current labor shortage means there’s a dearth of resources to step in and handle a leader’s responsibilities while they’re out. Eschewing those responsibilities not only puts the business at risk, but also makes for a pretty sizable headache to return to. Many leaders in retail would rather work instead of dealing with the consequences of being out of the business for days at a time.

Instead of relying on store managers to constantly direct employees and delegate tasks, consider implementing a task management system that empowers employees with relevant information to make timely decisions about their own work. This type of technology not only helps store teams operate efficiently without the need for multiple in-person meetings, but also tracks the work that was done so managers can catch up on what was completed (and what was missed) after returning from some well-deserved, restful time off.