When times are tough, retailers need to invest in their workforce rather than cost cutting, say Nicola Broadhurst, partner, and Hollie Ryan, associate, at law firm Stevens & Bolton
The outlook is bleak for the high street, and there is no easy fix. Cutting back on staff might feel like the logical next step. However, it is at times like these that investing in – rather than scaling back – your workforce is crucial.
Retention of talent and recruitment will be two of the most critical challenges facing the retail sector in 2019 – particularly as the pool of available talent looks set to dwindle if European Union nationals are not granted preferential access to the UK labour market post-Brexit.
As business operators compete for a smaller pool of skilled staff, employment costs are likely to rise. So retailers would be wise to review their recruitment strategies now, to remain competitive.
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Profit-sharing incentives or employee-share schemes, such as those in place at Starbucks, can serve as a valuable tool to reward contribution and increase productivity. By establishing joint ownership, these schemes can help foster engagement and loyalty among employees.
However, recruitment strategies need to distinguish retailers from their competitors and also recognise that employees are motivated by more than just money. Competitive salaries are, of course, important, but a brand that provides an enjoyable retail experience for shoppers and employees alike will have a competitive edge when seeking to attract the best talent.
The value of a strong culture is easily disregarded, but is highly valued by prospective and existing employees. Retailers should consider introducing a core set of values set out in a clear policy document, and implement this through training.
In a volatile market, staff may feel insecure and demoralised. Open discussion as well as practical assistance, for instance by offering mental health training, will help boost morale, resulting in positive engagement with customers and reduced absenteeism.
People should lie at the heart of any retail business strategy for the year ahead
To retain talent, retailers should look to nurture and promote talent internally, and offer a clear roadmap for career progression. Regularly reviewing training to address skills gaps will help to upskill staff and develop professional talent, creating clear succession paths in the event of the departure of a key employee.
Apprenticeships can also help stimulate organic growth from the ground up, and this in turn can instil brand loyalty and embed cultural values.
People should lie at the heart of any retail business strategy for the year ahead. Despite the undeniable challenges posed by the current economic climate, there is still room to get ahead of the competition, by investing in employees to ensure a distinctive retail experience for customers.