Five myths about human capital management in the retail sector
When retailers think about improving their sales numbers and generating more profits, they may not always consider one of the most important elements that contributes to retail success – an engaged workforce. Here, our SVP of retail John Orr discusses how retailers can benefit from focusing on better employee engagement.
When most retail companies think about improving their sales numbers and generating more profits, they tend to focus on marketing promotions, sales coverage, conversion, and making the consumer experience pleasurable. They rarely consider one of the most important elements contributing to retail success – an engaged workforce. By improving their approach to human capital management, retailers can leverage strategies to better engage their people throughout the employee lifecycle, which is proven to positively impact productivity and profitability.
Retail is a high turnover industry, however, if retailers focused on better engagement, they can extend the stay of each associate and both the brand and bottom line will reap the benefits. Furthermore, Gallup’s State of the American Workplace reports that employees who are engaged are more likely to improve customer relationships, resulting in a 20% increase in sales. To develop high performers, employers must empower them.
High performance retailers know how to effectively manage their talent, while low performance organizations talk about talent management and fall victim to one or more of the following talent management myths:
1. Employees leave for the money
Some management assumes that if a worker is leaving, it's because he or she is pursuing another job that pays more. While salary is important, as Ceridian’s 2018-19 Pulse of Talent revealed, employees consider leaving for other reasons, even if they’re happy. So, what makes them stay? Our Pulse of Talent found that the top factors that keep employees engaged are benefits (most commonly cited by 30% of respondents), good compensation, relationships with colleagues, and job security.
LinkedIn’s 2019 Workforce Learning Report found that 94% of employees would stay at a company longer if it offered investment in learning opportunities. When budgets are tight, and you can’t always reward your associates financially, consider other factors in the employee experience as part of your compensation strategy.
Related: What fuels talent churn? Download Ceridian’s 2018-19 Pulse of Talent
2. Employee engagement isn’t dependent on a manager’s participation
Most people underestimate the importance of a good manager. HR execs rarely anticipate that an employee will leave a job simply because he or she can't get along with a supervisor, but it’s a huge reason why people leave. People don't leave companies – they leave managers. In fact, Gallup’s State of the American Workplace found that 50% of employees leave their jobs to get away from their managers, and Gallup’s State of the American Manager report found that managers account for as much as 70% of variance in employee engagement scores.
Yet companies often fail to hold managers accountable for turnover problems. The best organizations equip managers with technology and training, so they can focus less on transactional aspects of management, and more on inspiring and motivating their employees.
Related: Do these two things to help managers improve employee engagement
3. Too much training can be a bad thing
Some companies are afraid of training their employees too much. They fear that if they give their workers too many professional skills, they will quit their jobs and use those skills elsewhere for more money. This isn't usually the case – often employees gain peace of mind when they acquire new skills. According to Deloitte, “research shows that retailers that place high value on talent by investing in improved training and development will likely attract and retain the type of talent needed to remain competitive.”
4. Retention is pointless
Some companies have a philosophy that in retail, there's no point in focusing on retention because workers are going to quit, and they can't fight it. But it’s this mindset, and thinking of retail associates as expendable or simply a cost center, that negatively impacts employee engagement and drives business costs up. Every departing worker costs a lot of time and money to replace, and companies should focus on reducing these expenses. There are also soft costs associated with turnover, including cultural impact and lower productivity.
By investing in hiring and keeping top-performing retail associates, you’re also investing in delivering superior customer service and face-to-face relationship building with customers. As Tom Stockham, CEO of omnichannel advocacy management platform ExpertVoice, said in this CNBC article, retailers that treat their employees as more than just an expense on a balance sheet tend to have higher retention rates, higher sales per square foot, and lower store return rates.
5. Branding equals advertising
What is employer branding? According to some, it's nothing more than an advertising message or a catchphrase to promote working for a company. In reality, it's much more. The company brand comes from the experience the employees have working for the company. Behaviors are a function of the environment and systems that support it.
As a result, a well-engaged employee will extend that same mindset to the customer for a better experience, and will spend his or her discretionary efforts promoting their employer in their own community and social networks.
Related: How retail and hospitality companies can leverage data insights for better workforce management
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