Six Common HR Challenges In The Retail Industry And How To Overcome Them

The retail sector is unpredictable to say the least. It's vulnerable to risk on multiple levels, from economic shifts to changing consumer tastes.

Hanging over it all is the challenge of managing staff - they play a pivotal role in keeping operations running, yet require due time and investment in order to deliver organizational value. HR departments have long tussled with issues such as employee retention, staff motivation, and absence management. It's up to them to navigate the complexities of it all and ensure a healthy working environment.

This article will delve into six of the most common challenges faced by retail HR departments, and outline strategies to help manage them.

Six Common HR Challenges In the Retail Sector

The job of an HR manager is never easy. But in retail, it comes with a unique set of challenges. Here are six of the most common:

1. Employee Theft

Employee theft can happen in any business, but it's particularly common in the retail sector. Stores are in the business of selling things, after all - with so many to keep track of, criminal minds would be remiss to ignore the opportunity. Some people further assume that entry-level jobs are easier to acquire and therefore easier to abuse.

A study from the National Retail Federation^[1] shows that employee theft is on the rise in the United States. In 2022, roughly 28.85% of total product shrink was attributable to internal actors. That's up from 28.5% the year before.

HR departments are tasked with the difficult responsibility of addressing these incidents when they happen. While policies can differ from store to store, most terminate an individual's employment upon discovering theft. The only problem is that detecting it can be hard. It can be even more challenging to navigate claims of theft between staff members when other evidence is lacking.

2. High Turnover

Turnover is defined as the rate at which employees come and go in an organization. The retail sector has one of the highest turnover rates in America, ranking among other high-pressure industries such as construction, arts and entertainment, and hospitality.

The reason for this is multifaceted. Many retailers, like clothing stores and department stores, experience seasonal fluctuations in demand, which can cause employees to hop from job to job. The retail sector does not offer particularly high wages or attractive benefits packages, either, so it’s not uncommon for employees to jump ship at the first opportunity that provides better pay and benefits.

3. Team Member Engagement

We hear about engagement statistics a lot with respect to HR - but what does it really mean?

Employee engagement is the level of enthusiasm, passion, and commitment a person has for their job. It's the degree to which they feel connected to their organization's goals and values. When staff members are engaged in what they do, it can lead to higher performance, morale, and productivity.

As a relatively by-the-book and repetitive job, store associates may not always be as motivated to do their work on a given day. It's up to HR departments to bridge the gap between how employees feel and the level of effort they put into their jobs.

4. Managing Shifts

Most retail establishments operate for more than eight hours a day, five days a week. That means staff must work in shifts in order to keep the store open for customers. Scheduling employees for shifts can be a real challenge, especially in an environment with plenty of variables and dynamic personnel changes.

Ideally, HR managers want to make sure that staffing levels are sufficient during peak hours, without overstaffing during low periods. This requires keeping track of employee availability and requests for time off or changes in shift patterns.

5. Employee Training

Employees need to be trained on a variety of topics in order to do their jobs effectively. But proper training takes time. Amidst high turnover rates, many employers in the retail sector opt to rush - or in worse cases, completely forego - formal staff training. It's thought that learning on the job is sufficient, but in reality this often leaves employees feeling overwhelmed and unprepared.

6. Competitive Wages and Benefits

Few people pursue a job in the retail sector for the money. Low wages and few benefits are an unfortunate commonality among employers, which in all fairness, can only offer team members

what the market will bear. It comes at the cost of employee experience, loyalty and morale, both of which are essential for creating an environment in which people can thrive.

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What Can Be Done to Tackle HR Challenges In the Retail Industry

Problems abound, HR departments aren't solutionless in their fight against unfavorable trends in the retail sector. Here are a few best practices that can help remediate common employee concerns:

Invest in Employee Development

Retail companies must make employee development a priority. Investing in employees is beneficial for both sides, as the company can directly benefit from better-trained and more efficient staff while offering employees the opportunity to improve their skills and gain valuable knowledge.

Provide Opportunities for Growth

Demonstrating a commitment to employees' development and growth is a great way to boost morale and retention. Common initiatives include offering training courses, access to educational resources, and opportunities for career advancement.

Implement Flexible Schedules

Flexible scheduling is essential for employees in the retail industry, who often work long or irregular hours. Offering flexible schedules can help increase job satisfaction by allowing staff to better manage their personal and professional commitments.

Create a Positive Working Environment

Creating a positive work environment is key to keeping retail employees engaged and motivated. Companies can do this by encouraging collaboration, promoting an atmosphere of open communication and feedback, providing support to staff members when needed, and recognizing employees for their hard work and dedication.

With the right HR strategy, retail businesses have the power to not only reduce costs but also increase efficiency and productivity while driving positive culture change in their stores.

The key to success lies in creating an environment where staff feel valued, respected, and appreciated - that's all anyone wants, after all.

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[1] https://nrf.com/research/national-retail-security-survey-2022