5 HR retail challenges and solutions for 2023

For small business retail owners, the tug-of-war struggle between creating a great customer experience and building a sustainable, unified team isn’t easy, and one often comes at the expense of the other. You know you need to put more time into retail HR, but you’re not sure how.

Unlike in other industries, the high turnover in retail means you don’t get as much return on investment (ROI) from recruiting, onboarding, and training new employees, and a limited and inexperienced workforce makes bringing new hires on board an even bigger challenge. And in the aftermath of the pandemic, your retail store needs to offer impeccable customer service to compete with the convenience of e-commerce.

Arming yourself with effective retail HR strategies that’ll help you build a solid team and make your business more resilient is the best way to face 2023’s biggest retail industry challenges. So let’s explore how to do just that.

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What is retail HR? 

Retail HR is the set of tasks and responsibilities associated with managing employees in a retail business.

While every retail business is different and has its own unique issues and goals, retail HR generally deals with optimizing ‌ hiring, onboarding, training, and development processes so your workforce can deliver the best customer experience possible and help you meet your sales objectives.

Why is HR in retail important?

HR in retail is important because, unlike in other industries, the need for retail owners and managers to hit sales quotas means they’re continuously monitoring sales data and giving feedback to their customer-facing workers throughout the day. So, without HR resources in place to support retail employees, it’s easy for them to burn out quickly, especially if they don’t share your passion for your business.

If you take the time to do retail HR right, it can help you:

• Find high-quality retail talent who can handle working at a fast pace and aren’t intimidated by complex customer service issues.
• Train your team to offer an optimal customer experience.
• Create a healthy work culture built on continuous feedback, praise, and recognition.
• Develop your employees professionally so they develop excellent retail skills they could use to move forward in their careers.

5 common HR challenges and solutions

Creating a positive employee experience in a retail environment can be a challenge, but it’s very rewarding when you get it right and it has a gratifying effect on your bottom line. Let’s take a deeper look at some of the biggest HR retail challenges business owners and managers are facing in 2023. 

1. Employee retention

With retail turnover rates hovering at nearly 60% and the latest mass resignations shrinking down an already-tight labor market, employee retention is currently a big concern for retail owners, even for those who have never had high turnover in the past.

Turnover in retail isn’t new — it’s been a major issue for many years and has a lot to do with:

• Low hourly pay and fewer benefits compared to other industries
• Long hours, high stress, and high burnout
• Few opportunities for advancement
• Employees who can only work part-time hours
• A traditionally young and inexperienced talent pool

But recruitment and employee retention aren’t lost causes for retail managers and owners who want to build a talented, reliable team that’ll stick around in the long term. Here’s what you can do to make your business more attractive to both job seekers and existing employees:

• Offer more competitive employee packages when sourcing candidates. If you can’t afford a higher hourly rate, think of bonuses and incentives — like early access to wages or tuition reimbursement — you can offer to motivate them.
• Train employees thoroughly, but then trust their abilities and be open to their feedback and ideas.
• See how you can offer more flexibility in scheduling for a better work-life balance.
• Use Homebase’s tools for easy onboarding and training — as well as our tools for boosting employee happiness — to make the hiring process smoother and more motivating for new hires.

2. Company culture

It takes everyone working together at your retail company to maintain a healthy work culture, but leadership sets the tone. If you’ve ever experienced a dysfunctional workplace, it probably comes as no surprise to you that 76% of workers have or have experienced a toxic boss.

In a dysfunctional workplace, managers and employees might fall into toxic behaviors like:

• Micromanaging employees
• Using intimidation or fear to get results
• Microaggressions like harassment, offensive jokes, or tone policing
• Gaslighting employees with statements like, “I think you’re overreacting” or “I never said that.”

Combating these kinds of situations can have a very negative effect on your company culture, but having HR processes and policies in place can play a big role in minimizing them. Here are some actions you can take if you feel your company culture needs a boost:

• Get a pulse check on your employee culture by asking your staff to fill out a team survey. In this survey, you can ask questions like, “How supported do you feel by your managers or team leads?” and “Is your professional development path clear to you?”
• Introduce healthy workplace culture fundamentals like a system for employee rewards and recognition and training on how to be a more empathetic manager.
• Use Homebase communication tools to track employee performance, easily provide feedback, and boost employee engagement.

3. Employee scheduling 

Predictable schedules are more important to employees than most managers realize. It can be a challenge to always make consistent schedules in advance, especially in retail when peak sales periods of the week don’t always coincide with employee availability.

That’s why some managers feel it’s easier to schedule with little or no advance notice, so employees don’t have time to push back or ask for different hours.

The best way to solve this common HR retail problem is by using a scheduling tool that lets you:

• Create schedules in line with sales forecasts and labor targets so you’ll have sufficient staff for every shift and be able to explain certain scheduling decisions to employees.
• Check your employees’ availability, time off, and scheduling conflicts before you make your schedule.
• Share your schedule quickly and easily with automatic text notifications that let your team know as soon as your schedule’s published and with lots of advanced notice.
• Communicate with team members about schedule conflicts and shift swaps

4. Seasonal demand 

Higher consumer demand and store traffic around holidays often create a need to hire seasonal help. But this also presents an ongoing challenge for retail managers who have a brief window of time to hire, onboard, and train new employees and prepare them for one of the busiest, most challenging times of the year to work in retail. It’s also more difficult to make temporary workers feel like they’re part of the team and motivate them to meet their sales goals.

We suggest devoting more time and attention to the seasonal retail workers you bring onto your team by:

• Vetting seasonal applicants properly and making sure they understand the unique challenges of seasonal work before they take it on.
• Offering incentives to new seasonal employees like discounts or higher hourly wages.
• Showing your appreciation by giving seasonal workers lots of praise and celebrating their wins.
• Staying in touch with reliable seasonal workers and asking them to return in the future. You could even offer them a specific incentive if they work for you again the following year.

5. Team communication 

It takes a lot of communication to coordinate daily retail tasks and keep your team motivated to hit daily or even monthly sales targets.

But you also have to communicate about team communication — tell your employees when they should touch base with you, your preferred channels of communication, and — in urgent or emergency situations like illness, a sudden need for a shift change, or last-minute time off — what process they should follow.

Consider using a team communication tool that enables you to:

• Send unlimited messages to give your team real-time updates about scheduling, payroll, wages, and other need-to-know information.
• Avoid anything falling through the cracks and keep all of your communication consolidated in one place.
• Get automatic updates when team members are running late or don’t show up for a shift.

How Homebase helps retail businesses with HR

We know you didn’t start a small retail business because you love HR processes or enjoy doing repetitive administrative tasks. And we understand that many local businesses don’t have the resources to hire an HR manager for help.

But we know you want to create a positive experience for your customers and employees and build a brand you’re proud of. Homebase is the only all-in-one, cost-effective people management tool that was built to help small businesses easily automate their HR processes for hourly workers — like hiring and onboarding, scheduling, payroll, team communication, and compliance. With a tool like Homebase, you’ll be able to save your creative, problem-solving energy for the work that really matters to your retail business.

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