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3 key people challenges in the retail industry – and how to fix them

The retail industry is undergoing a massive shift, with rapid technological advancements and changing consumer behaviour asking serious questions of those operating in this space. Leaders and HR professionals are facing a multitude of people challenges that must be addressed to remain competitive in this ever-changing landscape.

This article will explore some of the key people challenges retailers are dealing with today, and how to solve them. By understanding and mastering these issues, retail businesses can better prepare themselves for success in the future:

  • Recruiting and retaining a diverse workforce
  • Leveraging digital capabilities for greater customer engagement
  • Understanding what employees really think about your organisation

Recruiting and retaining a diverse workforce

One of the most pressing challenges faced by the retail industry is finding and retaining top talent. The issue has been exacerbated by ‘the great resignation’ triggered by the pandemic – as discussed in our eBook on how to keep employee engagement high in challenging times. Scores of people who lost their jobs or were furloughed have since moved on to other roles in different industries, or have decided to leave the working world for good, leaving a gaping hole in the talent pool.

According to the Bureau of Labor Statistics in the US, 94% of retailers have since struggled to fill vacant positions. Moreover, with the rise of e-commerce, traditional brick-and-mortar stores are competing with new players in the market, further exacerbating this challenge.

Consumers today are more conscious of brands’ social responsibility and are looking for brands that embrace diversity and promote inclusivity, and retail organisations must also have a diverse workforce that represents the communities they serve.

In today’s retail landscape, having a diverse workforce is not only important for social responsibility, but it also brings many benefits to the organisation. Diversity drives innovation, enhances customer service, and fosters an inclusive work environment.

This means recruiting and training employees from different backgrounds, ethnicities, and cultures. This strategy can help organisations operating in the retail industry tap into new markets and connect with customers who may have specific cultural needs or preferences.

To ensure they have a diverse workforce, retailers must implement an effective recruitment strategy that reaches out to individuals from different backgrounds, cultures, and genders. That might mean collaborating with educational institutions, community-based organisations, and social networks, tapping into new talent pools to reach a broader range of potential candidates.

Retailers should also think about using inclusive language in job descriptions, structuring the interview process to help eliminate unconscious bias, and introducing training and mentorship programmes that promote diversity within the workplace.

Leveraging digital capabilities for greater customer engagement

The rise of e-commerce and digital technology has added a new layer of complexity to retail. Retail organisations must embrace digital technology to stay connected with customers and maintain a competitive edge. This includes developing e-commerce platforms, mobile apps, and social media channels to connect with customers and promote products.

Retailers can also use data analytics to track customer behaviour and preferences, which can inform product development and marketing strategies, while customer loyalty programs can incentivise customers to engage with their brand and keep coming back.

However, the adoption of such technologies requires a skilled workforce that is trained in the latest digital tools and techniques. It’s crucial for organisations operating in the retail industry to invest in the training and development of their employees to ensure they have the necessary skills to compete in today’s digital landscape.

Understanding what employees really think about your organisation

Understanding what your employees think about your company is crucial – especially in retail, where employees often face long hours, low pay, and demanding customers, which can lead to a high turnover rate if their needs are not met.

That’s where employee surveys come in. They can provide valuable insights into how your people perceive their work environment, job satisfaction, and opportunities for growth, and help retailers to identify problem areas and address them in a timely manner.

High levels of employee engagement translate to increased productivity, higher customer satisfaction, and lower turnover rates. Through employee surveys, employers can identify areas that may be causing low engagement levels and take corrective measures to address them.

Employee surveys also provide a platform for employees to voice their concerns and provide feedback on their work environment – including things like the effectiveness of training and development programmes, which we’ve already highlighted as a focus area.

By listening to their employees’ feedback – and acting on it – retail organisations can identify workplace issues and implement changes or interventions that lead to a better work environment. Addressing workplace issues can enhance employee satisfaction and boost morale.

High employee turnover can significantly impact a retail company’s performance and customer satisfaction. Employee surveys can identify factors contributing to high turnover rates, such as inadequate compensation, lack of opportunities for growth, or a poor work environment. By addressing these factors, retail companies can reduce turnover rates and retain top talent.

Finally, as long as your organisation makes a clear effort to address the feedback received, employee surveys can strengthen communication and trust between employees and their employers. By seeking their employees’ feedback and responding to their concerns, retail companies can enhance their employees’ sense of value and investment in the company – which, in turn, can improve loyalty and retention.

Why should you focus on employee engagement?

Employee engagement is a deep rational and emotional connection to your organisation and the work you do. It’s the outcome of a great employee experience, and starts during the recruitment process – before you even turn up for your first day.

Engagement is important because it unlocks the potential of each individual, their motivation, and maximises their discretionary effort. If they’re engaged enough to become advocates for your organisation, engagement can live on long after employees leave – which has a tangible impact on commercial outcomes for your business.

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