Like many industries, retail is currently experiencing a talent shortage. How severe is that shortage? While vacancies for the U.S. job market overall are down 5.6% in the last 12 months, retail vacancies are up 11.6% through April 2024. And, interestingly, job seeker activity is starting to trend up, too. These trends offer cause for hope and concern ahead of the holiday period.
Retail jobs tend to stay open longer, too: In the last 12 months, the median duration of a retail vacancy listing was 27 days — 68% longer than the median listing length for the U.S. overall (16.1 days).
But several retail positions stay open much longer: The median vacancy length for a delivery driver was 89 days; for a shift supervisor, 77 days; and store associate roles languished a median of 43 days. And even when retailers do find people for these roles, they’re more likely to leave. The attrition rate for retail is 30% higher than it is for U.S. jobs overall.
That’s the bad news. The good news is that the extent of this problem means that many people have been researching ways to solve it. Here, I round up the most relevant findings along with the latest data on retail vacancies to offer five actionable strategies retailers can use to attract and retain talent better.
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1. Understand Your ‘Talent Competition’
When retailers are hiring for open positions, they’re not just competing with other retailers for talent. In fact, the businesses that are trying to attract the same workers as you — aka your “talent competition” — may be in industries you don’t pay much attention to.
People qualified to work a shift supervisor position, for example, have management skills they might be able to translate to other industries. An office admin role might require similar skills but offer a calmer environment — and a more promising career path.
An entry-level role at a nonprofit might offer similar pay but provide work more aligned with an employee’s personal values. In fact, organizations with employees who find their work meaningful have a 27-percentage-point lead in retention over those where workers do not.
Both are examples of how retailers often face talent competition from organizations that are not commercial competition. Broadly, talent competition can come from companies:
- In your industry (i.e. direct competitors);
- In your geographic region (i.e. local competitors);
- Offering jobs with comparable pay;
- Offering jobs with comparable experience requirements; and
- Offering jobs with similar titles (shift leader, team leader, shift supervisor, etc.).
Retailers should consider all these open positions when crafting their talent attraction strategy.
2. Set Competitive Wages and Benefits
Most retailers understand that wage-and-benefits packages are a huge cause of attrition. If an employee can make a dollar per hour more in a similar role elsewhere, they’re likely to leave.
The first step here is to make sure you’re offering wages that are competitive with what your talent competition is offering. How can you do this? Once you’ve identified your talent competition, a wage benchmarking tool can give you this information.
From there, it’s important to understand the valuable recruiting edge many retailers — particularly large retailers — have. While you may not be able to offer the highest wages available, you can offer a compelling career path. In fact, many people join large corporations specifically for career opportunities. But many large organizations don’t have well-structured career coaching for entry-level workers.
Add this benefit to your compensation package, and you’ll likely notice an increase in qualified applicants. Of course, offering formal career guidance will require some organizational planning, but done right, it could have a significant impact on retention.
3. Offer Flexible Benefits
While career opportunity is a big reason people join large retailers, it’s not something that every employee wants. So how can you craft a benefits package that keeps all your top-performing workers around longer? Research from Mercer suggests that creating a flexible benefits package is key. By offering options and letting employees choose the benefits they want most, you’ll be more likely to deliver what matters most to every employee.
Even the process of figuring out which benefits to offer can help: Gathering employee feedback on important benefits communicates that you value their input, which can create a bond with your company. That has material benefits for your bottom line: According to Mercer, companies with more experienced employees who feel a connection to their employers perform better than those that don’t.
What’s more, happy employees typically deliver better customer service, which has its own financial benefits. Nearly half (47%) of consumers are willing to pay more for great customer service, and 88% say they’re more likely to be repeat customers when service is great.
4. Get Creative About Hiring
A recent Deloitte report noted that thanks to high demand for talent and slowed growth in the labor force, retailers must now pay higher wages for entry-level talent and are being pushed to get “imaginative” about hiring.
What might that look like in practice? Walmart’s 2023 strategy for holiday hiring might offer some inspiration. While Amazon took a traditional approach to the holiday season, bringing on additional workers in the lead-up to the winter holidays, Walmart instead added more permanent workers earlier in the year and paid them overtime for the holidays.
Taking a Walmart-like approach might help retailers retain more employees, especially those looking for stable, ongoing employment.
5. Take the Candidate Experience Seriously
With retail employees spread thinner than ever, it may be tempting to outsource hiring tasks to new-on-the-scene AI assistants. But some experts advise proceeding with caution, because AI can create awkward and unsatisfying experiences for job candidates.
At larger retailers, those candidates may take to sites like Glassdoor to express their frustration with the process. Those negative reviews can hurt a retailer’s ability to attract new talent, thus worsening an already bad situation.
The antidote? Don’t over-rely on AI tools in recruitment. At the very least, avoid “ghosting” anyone who makes it to the interview round — that is, once you’ve interacted with candidates, be sure to explicitly let them know when you’re not moving forward. Make sure that your AI tools don’t create gaps leading to unsatisfied candidates (and perhaps customers for your brand).
Addressing the Retail Talent Crunch will Require a Multi-Pronged Approach
There’s no easy way out of a labor shortage like the one facing retail. But embracing a variety of strategies — including digging into wage data, offering workers choices in their benefits, rethinking hiring strategies, treating all applicants with respect and taking a broad view of who you’re competing with — can, collectively, make an important difference ahead of the holiday period.
And while these efforts will be somewhat labor-intensive, they’ll also likely have lasting impact on retailers’ ability to attract and retain talent.
Michael Woodrow is the President of Aspen Technology Labs, a recruitment technology and data-services company headquartered in Aspen, Colo. The company’s flagship product line, WebSpiderMount, is a suite of jobs data management products. It includes job scraping, business intelligence, wage benchmarking and access to over 9 million real-time job listings from over 150,000 companies globally. With more than 25 years of experience in recruiting and recruitment technology, Woodrow brings a wealth of knowledge that helps customers better understand the labor market. He also serves on several industry and nonprofit boards, including TATech.
