How retail business leaders can overcome HR challenges in today’s economy

Economic uncertainty continues to loom over the Canadian retail sector, based on RBC’s recent survey with Maru Group, a leading client experience research and advisory services company, that identifies a shared worry among business leaders.

In the online report, completed by 600 retail business owners and decision makers across Canada, leaders said their most pressing challenges are human resource-related, specifically talent retention and recruitment. They want to hire and work with top talent and struggle with how to maintain flexible staffing levels in an inflationary market.

“The constant churn of retail employees really affects your customer experience and your efficiency,” Laura Hammond, a seasoned HR consultant with a wealth of experience gained from stints at H&M and Aritzia, says. “When your customer has fewer dollars to spend, you want to fight for every dollar, and you can do that by giving them a delightful shopping experience with an engaged and knowledgeable employee. If you lose those employees, you’re always in a cycle of rehiring.”

And with turnover happening so frequently in retail jobs, that cycle can be costly, with companies needing to spend money on recruiting and training new employees. There are also costs that are harder to measure, like reduced efficiency and lost sales.

Retaining staff during an economic downturn is no easy feat, especially in a tight job market. Fortunately, there are non-financial incentives that retail employers can offer to keep their staff from jumping ship for a new opportunity. Hammond says it’s important to think about how you can make the day-to-day more agreeable. One way to do that is by providing autonomy over scheduling.

“Imagine not knowing your schedule in advance and having to plan childcare, meals, and familial arrangements around that uncertainty,” she says. “Giving employees control over their schedules, and allowing them to pick up or trade shifts seamlessly, can reduce that stress and give them some agency.”

Hammond also highlights the often-overlooked benefit of employee development during slow business periods.

“Doubling down on your employee development programs when traffic is less steady can provide employees with usable skills and keep them engaged,” she says. “This will also positively impact the customer experience and help drive business.”

Retail businesses should also make sure they’re offering employees a broader spectrum of employee benefits, beyond monetary compensation. Mental health benefits can be one such perk, especially in retail jobs, where employees tend to skew younger and have higher mental health needs. Providing educational support and pathways to development can also add value for employees in financial need.

“All these people are entering the workforce with many different stressors,” Hammond says. “Even if a company doesn’t have the highest compensation, they can still win with their total package for employees.”

Another key component of retaining talent, according to Hammond, is devoting resources to employee communication and management training. She says managers need to know how to listen to their staff’s concerns and be able to respond quickly and effectively.

“For most of your frontline workers, their experience mostly depends on the store’s leadership. Investing in that store manager or middle manager and giving them the tools to become strong leaders will help them create a more inclusive and welcoming environment for their staff, while also empowering them,” she says.

Employees today want to feel that they’re making a difference, so it’s important that retailers clearly explain their company values, whether it’s sustainability, community giving, or another ethos. Hammond adds that including employees in decision-making around corporate responsibility initiatives is another way to engage employees.

“Find those employees that are very dedicated and make them store ambassadors,” she suggests. “Everyone likes to feel like they’re recognized and giving them these extra duties can really improve the employee experience.”

In today’s competitive market, retail business leaders also need to adapt their strategies for recruiting new talent. Hammond emphasizes the importance of a clear value proposition and streamlined hiring process, noting that a lot of retailers aren’t quick enough with their hiring. To speed up the hiring process, she recommends recruiters conduct on-the-spot hiring events.

“You’ve got to make it easy for prospective employees,” she says. “Equip your recruiting team with a marketing budget to get eyes and ears on your hiring message. Make sure they can assess skills and competencies quickly, provide immediate offers, and get new hires into training as fast as possible.”

Hammond says companies can speed up onboarding by having pre-employment forms filled out digitally and letting new employees do pre-employment training on their own time. She also stresses the importance of ensuring there aren’t barriers to integrating new employees with scheduling and payroll platforms so new hires can get started without delay.

Of course, anyone searching for a new job is likely motivated by money, so a fair wage is essential if you want to attract high-performing individuals. But even if your competitor next door offers a slightly higher wage, Hammond believes you can still win them over by offering superior benefits and an exceptional employee experience.

“An employee won’t go for the job that pays fifty cents more per hour if it means they’re going to be treated poorly and have less agency,” she notes.

As economic uncertainties persist, retail businesses must regularly monitor and adapt their talent retention and recruitment strategies to stay relevant. According to Hammond, “Your recruiters are your best source of market data since they hear from candidates about what other retailers are doing to attract employees. Keep that line of communication open, look at your HR data to identify patterns, and be proactive in testing new methods to stay agile and competitive in the ever-changing market.”

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