Of course, the cost of turnover also varies from position to position:
- for associate-level positions, employers can predict to pay 16% of an annual salary to replace an employee
- for executive-level positions, organizations will pay around 213% of an annual salary
2. Training and recruiting new employees
Training and recruiting new hires is not a new HR practice.
- the constant influx of new employees
- the shift to more remote learning
- and the logistics of the retail sector
all entail significant new HR challenges.
For example, companies have to train retail employees across time zones and countries and prepare them for different departments ranging from department store workers to sales departments.
3. Employee Engagement and Experience
Employee engagement is a crucial concept for retailers. Since the retail industry relies on excellent customer service in a face-to-face environment, disengaged employees directly impact the impression left on customers.
So, a successful business is driven by an engaged workforce, which hinges on creating a meaningful employee experience.
This is essential because one single poor experience can be highly harmful to maintaining brand loyalty and growth, particularly when there’s never a lack of competitors willing to fill your spot in the marketplace.
4. Employee Theft and Misconduct
Retail stores often employ part-time and temporary workers, and this transient nature of the retail business makes it very susceptible to theft.
In fact, it's the largest source of inventory shrinkage in the American retail industry and the third-largest in the UK.
Not only do companies lose billions of dollars each year, but they also often face potential lawsuits in cases of employee misconduct such as sexual harassment, discrimination, and safety issues.
5. Regulatory compliance
HRM in retail faces heavy demands for regulatory compliance. Laws such as child labor or wage and hour rules vary across countries. Labor costs already represent a significant amount of a retailer's operating expenses, nearly 60 percent, and it does not look like they will decrease.
To counterbalance higher wages, retailers may be forced to increase their use of part-time workers, whose benefits packages generally cost less, and cut out hours for full-timers.
So, businesses with higher concentrations of minimum-wage employees, such as supermarkets, will be hit the hardest. This may lead to layoffs, staff reductions, and price increases.
5 Tips to an effective HR management in the Retail Industry
Now that we have taken a closer look at the HR challenges, in the following I will discuss several tips on how to cleverly use software and other tools, in order to solve issues that typically arise within the organized retail sector.
1. Embrace technology systems.
Getting held up with employee paperwork can make it difficult for HR teams to positively impact their businesses, which is why welcoming software that automates essential processes is the key to freeing up human resources professionals to focus on the projects that matter the most.