Solving Retail’s Labour Shortage

Retailers struggling to keep their stores fully staffed often cite the “Great Resignation,” a mass psychological phenomenon where workers across many industries left their jobs during the pandemic. But fashion brands need to consider whether there’s a good reason people are steering clear of sales associate positions.

For the better part of four years, Samantha Richardson-Roberts had been holding down three jobs, including a part-time gig at a lingerie retailer, before the company fired her in August.

The mother of three said she had expected to lose her job when she missed a shift to attend her sister’s bridal shower. She has since landed full-time work as a communications consultant, allowing her to also leave her other two jobs, as a high school wrestling coach and a bartender as well. But while she could see herself returning to those positions should her circumstances change, she has no plans to work in retail again.

“I just feel like these [stores] run you into the ground,” said Richardson-Roberts, who made $11.30 an hour selling lingerie at a shopping centre in Kansas City, Missouri. “I was just tired of it. I absolutely could never go back to that.”

As retailers emerge from the pandemic, they are finding plenty of potential hires are, like Richardson-Roberts, fed up with low-paying, often gruelling jobs stocking shelves and ringing up sales. Between January and July, job applications per opening declined 44 percent for retail positions, compared with 19 percent nationwide, according to study by recruiting platform iCIMS.

It’s a problem that is about to get orders of magnitude worse, as stores look to hire hundreds of thousands of workers to handle the holiday rush. As of Sept. 30, more than 10 percent of seasonal job postings on Indeed noted that hiring was urgent in the job description, up from 1 percent the year before. Meanwhile, the share of searches for seasonal work was down 39 percent from 2019.

Retailers are raising pay and offering increasingly lucrative benefits to lure applicants. Kohl’s is paying sign-on bonuses of up to $400 and Target is indicating some seasonal positions will become permanent. Walmart is promising to pay college tuition for store associates.

But it’s not just about the money. During the pandemic, millions of people have reassessed what they want out of their jobs. Whether they’re prioritising professional development, pay, flexibility, family life or, more than likely, a combination of all four, many have come to believe retail jobs come up short.

“We’ve had major disruption... in people’s lives and the way they look at things and their values,” said Paula Reid, president of executive search firm Reid & Co. “The reality is organisations and policies and the way they think about their workforce has to shift as a reflection of that.”

Dollars and Cents

The average annual salary for a salesperson working in a clothing store was $28,680, or $13.79 per hour in 2020, according to the US Bureau of Labour Statistics. That’s below the living wage in the US, which MIT estimates to be $16.54 per hour.

While some large retailers, including Target, have raised starting wages to $15 this year, many nationwide fashion chains pay sales associates on average about $12 an hour, according to Glassdoor.

In fashion, where margins are notoriously thin, low pay for sales associates is nothing new. However, if the labour shortage persists, companies will need to rethink how they approach compensation, Reid said.

“I don’t think retailers have a choice any more [when it comes to] deciding whether they need to raise pay,” she said.

One option is to hire a smaller number of better paid and better trained staff. Some retailers task their sales associates with hosting livestream product demonstrations, or walking shoppers through virtual try-on apps. If retailers are crafty about how they position and compensate for these responsibilities, they can lure in a larger pool of candidates who are interested in more than stocking shelves.

These new tasks can come across as simply piling more work onto already overburdened staff. But when paired with internal training programmes and a clear roadmap for advancement, or simply including low-level workers in decisions about how a store is run, a sales associate role can have more appeal.

Retail executives are waking up to this reality: in a survey released by the consulting firm Accenture on Friday, 49 percent of retail executives said they feel increased pressure to provide career growth opportunities for their employees, and 51 percent said they feel pressure to offer permanent roles to holiday-season temporary workers.

“You can have lots of really low paid, miserable retail workers or you can have fewer better paid ones and hopefully upskill, as many of them as possible,” said Miya Knights, a UK-based retail analyst.

Building an Attractive Culture

For Richardson-Roberts, the lack of paid leave when she was pregnant with her second son in 2018 contributed to her disillusionment with her job at the lingerie store.

“They put me on the schedule to work on Black Friday… I told them it was [impossible] for me to come in but they still expected me to,” she said. “I went into labour the next day.”

Paid leave in the final weeks of pregnancy, and the months after birth, is not required in many US states, and while companies often provide these benefits to corporate employees, they are less-frequently offered to store associates.

That needs to change if retailers are serious about filling the growing number of open positions on the sales floor, Knights said. Retailers need to show they value their lowest-paid workers just as much as the ones in the top offices of their headquarters.

“They have to start thinking a bit outside the box and create a culture that shows retail is not just a fly by night seasonal thing,” she said.

Nowadays, it’s not difficult for employees to take to social media to air out their grievances against their employers. During the height of the Covid outbreak last year, retailers who fumbled on store safety protocols or did not provide adequate personal protective equipment to store staff and fulfilment centre employees were called out on Instagram and Twitter.

Those missteps could still be hurting some retailers looking to hire now.

“It’s a massive recruiting tool to be able to tell a positive story around how a company treated employees during Covid,” said Reid. “What companies have to focus on is [whether] the experience of working for their organisation enhances somebody’s life. Right now, there’s this whole chunk of the workforce that’s basically saying, ‘yeah, it’s not giving me enough.’”