Winning the War for Retail Talent in $15/hr. Era

The starting hourly wage rates for many retailers are no longer at or slightly above the government mandated minimum wage. In the current economic climate, starting rates cover very wide ranges including many at or above $15 per hour. However, the requirements for these jobs are all essentially unchanged; they are entry level positions.

Historically, hourly employees would not change jobs for money alone. It would take a significant increase, normally an increase of $1 per hour or more, to induce an employee to leave a job. Many reasons, such as job comfort, enjoyment, relationships with their manager/team, recognition, etc., were enough to keep them in their role.  The reality is that $15+ per hour is giving employees a $3 to $5+ per hour increase in hourly rates – more than enough incentive to leave the comfort of their current job.

This poses a big problem for employers…

For those employers already at $15 per hour or employers who are unable to pay $15 per hour, how else can they compete for and retain talent?

“Competing for and retaining retail talent is often mistakenly seen exclusively as a HR issue,” says Jeff Peretin, President of Connors Group. He adds “balancing pay and benefits into a ‘total comp package’ is where HR Directors tend to focus. And, while that formula might show 2 or even 3 times the hourly rate, employees typically won’t focus there…where retailers can really make themselves more competitive and encourage more employees to stay is by making their retail stores a great place to work.”

Based on recent Connors Group client case studies, some of most common reasons why retail employees leave their employer (excluding pay) is due to the conditions of the workplace and the lack of proper training. Employees find it difficult to do their job or feel they are not setup for success if they don’t have the rights tools. As a result, they become unmotivated, performance suffers, and they ultimately leave. Retailers often overlook this important consideration for employee retention.

The formal mechanisms that have traditionally been the domain of HR in retail (pay, benefits, rewards, etc.) remain essential, but are no longer enough to win the war for talent. Company culture will trump formal mechanisms when companies can no longer afford to increase their “hard” financial investments. This culture manifests itself in stores through a great work environment; clear expectations, consistent two-way feedback, effective and ongoing training, a neat, clean and orderly workplace, and a clear understanding of how the role of an associate contributes to the company mission. In today’s challenging economy, the company that masters these at the store level will win the war for talent!

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Chris Kelly, industry thought-leader and Director at Connors Group, leverages his deep experience both in retailing and consulting to craft innovative workforce management and store execution solutions for clients. He can be reached at [email protected]
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