Why Retailers Still Can’t Solve Their Hiring Problem

In 2018, Ella Ramirez, then a high school student and aspiring fashion designer, was thrilled to have landed a “stylist” gig at a clothing store near her home in Princeton, New Jersey.

Based on the job description, Ramirez imagined she’d be conceptualising the looks for mannequins in the shop window and giving style advice to shoppers perusing the women’s clothing chain, which has nearly 500 US stores and touts a unique assortment at each location.

“It didn’t take me very long to realise this was a typical sales associate job,” Ramirez said, adding that her duties mostly involved organising clothing displays, ringing up sales and attempting to convince shoppers to buy things.

She ultimately stayed in the role for two years, but said if the job had actually included more styling responsibilities, she might have stayed on longer, and even returned to the company after graduating from college. (Ramirez is now a student at New York University).

For decades, retail sales jobs like Ramirez’s have had the reputation (especially in the US) of being low-paying, mundane work with limited upward mobility. Many retailers could staff their stores with teenagers, college students and retirees by offering minimum wage, meagre hours and few, if any perks.

That changed during the pandemic. A tight labour market, inflation, retail crime and even new money-making opportunities on social media have made keeping stores staffed up one of the biggest challenges retailers face today. The quit rate for retail and hospitality jobs in 2022 was more than 70 percent higher than the US average, according to McKinsey. US retail quit rates — or the number of resignations as a percentage of employment — peaked at 5 percent in December 2021, according to the Bureau of Labour Statistics. That figure has since cooled to 3.1 percent as of August, but remains higher than the norm five years ago, when quit rates rarely topped 3 percent.

In response, many retailers vowed to revamp their sales associate roles. Some are reframing the gig, giving it a more attractive label like brand ambassador, client advisor or stylist, while others are offering opportunities to learn new skills and education subsidies. Wages are rising.

But in many cases, the jobs failed to evolve enough, and the pay hasn’t increased enough relative to other lines of work to bring in new applicants. Despite their rhetoric, many retailers haven’t put the adequate investment into truly making the job more desirable; others are taking a one-size-fits-all approach that isn’t meeting the needs of their diverse workforce. And all retailers must contend with the poor reputation of in-store sales work, which isn’t likely to change overnight.

“The best brands have done the research and know who their employees are and what they want — and their hiring managers can articulate transparently what the company is offering,” said Adam Lukoskie, executive director at the National Retail Federation’s NRF Foundation.

Refining the Approach

In a post-pandemic world, retailers must study their workforce as much as they do their customer base to determine which benefits actually make sense for the long term, experts say.

“Really great companies do research on ‘what do their typical five customers look like and they market to them that way,” Lukoskie siad. “These brands are now looking at ‘what are our typical five or six types of employees?’... and [addressing] them that way.”

For instance, if a retailer’s workforce is made up of mostly retired workers, education assistance is less appealing. At the same time, tuition assistance and flexible scheduling are huge drivers for Gen-Z and younger professionals — especially as remote work is now commonplace in corporate settings, Lukoskie said.

While most retailers can’t make roles in their stores and fulfilment centres virtual, they can invest in technology that can make scheduling and swapping shifts easier so workers have more flexibility in their daily lives, said Louise Clements, chief marketing officer at WorkJam, a software application for retail workers.

Gen-Z workers like Ramirez can be excited about making an impact in the organisation and want to engage in more fulfilling tasks, like assisting in visual merchandising or spending more time with customers, she said. They also expect to have a direct line of communication with their managers and corporate leaders so that they can “share their ideas and feel connected to the brand,” Clements said.

Ramirez, for instance, was promised there would be regular “corporate check-ins” at her store — when she could share feedback and learn about her career trajectory within the company.

“It never happened,” she said. “The lost opportunity for stores is that associates don’t have a direct communication channel with corporate so that we could actually influence strategy.” (Today, Ramirez is a member of the Z-suite, a network of diverse students from universities and colleges curated by boutique PR firm Berns Communications Group to advise retail leaders on consumer strategy among other things.)

During her time on the sales floor, Ramirez felt she “knew everything about our customer,” but she lacked a means to share that feedback or the incentive to do so.

Incentives don’t always have to be monetary. Recognition in the form of “badges” or call-outs during company meetings can also motivate some employees, said Clements.

Follow the Money

Overall, wages have consistently been the “number one driver” for retail employees of all demographics, said Mark Mathews, the NRF’s executive director of research.

Retail workers, on average, continue to earn less than peers in other industries. But earnings growth in the sector has outpaced other industries over the past couple of years with the average hourly pay for a retail salesperson jumping from around $11 in 2018 to nearly $17 in 2022, per BLS data. Many stores — including mass retailers like Walmart and some high-end brands offer rates as high as $30 an hour.

“Wages are incredibly important, but that’s only up until you hit a certain threshold,” Mathews said. “We’ve hit that threshold. Then it becomes about some of these softer things that matter to people in their jobs.”

Retailers should be transparent about “what’s really on offer” at their companies — from job perks to the fine details of the job title and description, Lukoskie said.

“The ‘store associate’ title is probably too generic and retailers have the right idea in trying to add some specificity to it,” he said. “But retailers need to be clear on how much of their job involves one set of tasks versus the other — in the same way store workers also need to be flexible about their work responsibilities.”

It’s up to individual retailers to communicate with their store teams regularly to get a sense of what’s working, experts say, bearing in mind that it could take some time for employees themselves to figure out what they want.

“The bottom line is that most companies that invest in making the retail employee experience better — and then actually articulate how it is in fact better now than six years ago — are growing faster than everybody else,” she said.