While so much recent debate has focused on raising minimum wages, some retailers are exploring alternative compensation models with their employees.
For example, Apple announced this week that it would open up its stock awards program to all employees – including retail associates. Starbucks also recently announced that it was footing the bill for more than 4,000 employees to attend college. Are these offerings enough to attract and keep the best employees?
The RTP editorial team shares their thoughts below:
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Debbie Hauss, Editor-In-Chief: Smart retailers know that their store associates leave a lasting first impression on shoppers.When they are motivated, enthusiastic and knowledgeable, they become powerful brand advocates who help boost the bottom line and increase customer loyalty. While retailers continue to struggle with minimum wage challenges, they need to find ways to ensure their employees are appropriately appreciated. Stock programs and educational opportunities are two great ways to give back to your best employees. Other retailers, such as Bluemercury, have committed from Day 1 to offer all employees full-time hours and benefits. We can all name the retail stores that we avoid because of bad customer service. Retail organizations need to come to terms with that reality in order to succeed in the long term.
Alicia Fiorletta, Content Strategist: I personally think these “alternative options” are highly effective; perhaps even more effective than simply raising wages. Allowing associates to invest in stock, or developing new programs to pay for employees’ college education, shows that businesses are investing in their workforce’s long-term quality of life. I think a key reason why employee turnover in the retail industry is so high is because associates simply see it as “just a job.” But brands could definitely boost employee morale and loyalty if they invest in the proper initiatives, training programs and technologies that impact the day-to-day lives of their workers. It also would be highly impactful if more brands showed how employees could move up the ranks and have profitable careers with the business. For example, I met someone a while back who started as a Nordstrom associate, and she grew to love the brand so much, she now is a key player in its PR department. I’m hoping we will see more examples like this in the future.
Rob Fee, Managing Editor: Money isn’t everything, but it is a powerful motivator. Employers willing to pay top dollar will always attract highly qualified applicants. Keeping them, however, requires ensuring their happiness, which wages alone can’t measure. To me, alternative compensation initiatives, such as Apple opening up its stock rewards program to all employees, are less about recruitment and more about retention. Even better, these compensation strategies also can help create new leaders for the brand. Starbucks’ offer to foot the college tuition bill for its staff also includes a path to a customized retail business degree for the employees interested in staying with the company. Seems like all parties come out a winner in that situation.
Adam Blair, Executive Editor: It’s highly commendable – and not incidentally good business – that Apple, Starbucks and a few other well-known retailers (REI, Nordstrom, Trader Joe’s) have policies in place to reward their hourly workers. With all the discussion about revitalizing the store experience, retailers will quickly realize that this won’t be accomplished unless their front-line personnel are both competent and motivated. What’s also needed is better training, both initial and ongoing, so that employees have the tools to provide great service. Retailers like The Container Store that invest heavily in training get payback in superior customer service and industry-leading employee retention rates.
Glenn Taylor, Associate Editor: The industry as a whole isn’t widely perceived as one that brings benefits to the employee, so any efforts like those Starbucks and Apple are putting together will certainly be a shot in the arm. While employees certainly look to salary as a primary gauge to decide whether they should stay at a job, they also consider added perks that other companies don’t, or can’t, offer. I think this is a huge opportunity for retailers to flex their creative muscles and build their own differentiators, truly showing what their brand represents. While I’m not sure every retailer has the revenue to send employees to college, benefits such as L.L.Bean’s complementary outdoor recreation trips can really serve to motivate and retain these high-performing employees.
