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The State of the Retail Industry and Overcoming Its Labor Shortage

The Great Resignation has rocked the service industries, and many organizations struggle to control turnover. For managers on the ground level of these industries, especially retail, scheduling has never felt harder. Many stores have had to deal with the downsides for over a year, but to quickly recap, employee shortages limit operating hours, contribute to employee and manager burnout, and reduce available revenues.

We give an industry deep dive to paint a picture of how bad the problem is and possible ways you can overcome the labor shortage.

Workers across the country have taken advantage of pandemic disruptions to reconsider employment itself. Over the course of 2021, Pew Research found the greatest contributors to quit rates across all industries were low pay, poor advancement opportunities, and disrespect at work.

Labor Shortage Insights
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Workers Are Dissatisfied

While the worker shortage affects just about every industry, many have the luxury of quickly replacing departed talent from a labor pool of interested candidates from lower-paying industries. Retail doesn’t really have that luxury.

A recent LinkedIn Workforce Confidence report found retail had the highest percentage of workers planning to leave their current positions — roughly a quarter! — and the lowest percentage of workers who wanted to stay in their current roles.

These ominous reports stem from many causes, primarily frontline COVID concerns, the industry’s traditional low pay, controversial retail scheduling practices, and extra unruly customers. The first cause will fade as COVID infections decline, but store-level managers have limited options when dealing with the other three factors.

It’s no irony many of these retail-specific causes line up with Pew’s research of general quit rates. Finding ways to minimize toxic customer interactions is a good starting point to limit the disrespect everyone on staff hates, helping to build mutual trust between employer and employee.

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Higher Pay Really Makes a Difference

It makes sense why workers are emphasizing pay more than in previous years. Inflation has sent prices soaring for everything, especially necessities such as rent, groceries, and gasoline. Much of the Great Resignation stems from a need to find employment that can cover these fast-rising costs.

Some national retailers have looked to address this shortcoming through boosting pay and adding more benefits. Those who do reliably create motivated employees empowered not only to stay long-term, but also to create the best possible customer experiences.

There’s tangible data that employers who invest in their employees over the long term create a positive workplace culture, one that job candidates want to work for. As managers receive more, higher-quality applicants, they are able to fill shifts and fully tend to customers’ needs without having to cut services. Companies with bought-in employees see minimal turnover and a convenient way to source managerial talent from within.

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Can’t Raise Wages? Better Engage Your Workers

For businesses truly unable to raise wages, improving the employee experience goes a long way toward increasing retention. Often that means improving communication between managers and employees. Setting clear expectations of schedules and policy changes through an accessible messaging platform ensures employees are not left confused or frustrated.

Speaking of retail scheduling, how managers treat workers’ time on and off the clock contributes greatly to their perception of the business. Most stores prefer demand-based schedules, which allow managers to curtail labor expenses during off-peak shifts – at the expense of workers who cannot find enough hours.

This is where smart scheduling practices make the difference. Minimizing labor costs doesn’t have to cut into employee paychecks, meaning workers won’t feel a need to look for employment elsewhere out of necessity.

HotSchedules provides workforce management and scheduling solutions for retailers of all sizes, giving managers the tools to make staff feel empowered and bought-in to the organization. Schedule a demo today.

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