Retail is an incredibly varied and rewarding industry to work in, particularly as there are a growing number of opportunities for training and rapid promotion. No wonder then that it’s a popular career choice in the UK, with around three million people choosing to work in the sector.
But despite this, recent research from Albion Ventures 2013 Growth Report found that a third of retail businesses say a lack of skilled workers is hindering growth – the biggest gaps in the retail skillset being sales, IT and financial expertise. This is clearly a problem in a sector that relies so much on its people, and at a time when retailers across the board have been hard hit by the recession. Put simply, to succeed in the current economic climate retailers need talented employees to help them stand out from the crowd.
So how do retailers overcome this skills gap? Training and education clearly plays a part, and the sector is already making great headway in this area. But in the fight to snap up the best new recruits from a smaller pool of skilled workers, retailers must also focus on how they’re incentivising both new and existing staff – with valuable skills, training and experience under their belts – beyond basic salary.
We know that the interest in ‘total reward’ has grown, which isn’t too surprising as many businesses have been reluctant or simply unable to commit to wage rises and bonuses in recent years. Research from the British Retail Consortium (BRC) shows many retailers are good at offering ‘soft perks’ – the most common being flexible working, paid breaks and staff discounts. However, whilst these incentives are good in the short-term, economic uncertainty means savvy staff increasingly value benefits that provide long-term financial security. These include products like medical insurance or Income Protection, which pays a regular monthly income to staff if they are off sick for more than 6 months. This might sound an unlikely scenario, but 300,000 people in the UK go on long-term sick leave during their working lives and only 1 in 10 people have a back-up plan to prepare for this eventuality. Income Protection is also one of the few benefits to provide a payback for the businesses if they need to claim – through not having to pay Occupational Sick Pay and through indirect cost savings like replacement staff, recruitment and reduced absence management.
Retailers also need to keep pace with the changing demographics of their workforce. As the UK’s largest private sector employer, the retail industry is particularly diverse. According to the BRC, 62% of people working in retail are women and 13% are disabled workers. With numerous options for flexible and part-time working, retail appeals to diverse groups – from parents looking to work around childcare, to older or disabled workers looking for flexible hours – and so benefits packages must be designed to support all employees and make them and their families feel financially secure. This approach also makes business sense, as a recent report from Cass Business School, commissioned by Unum, concluded that providing truly flexible and tailored benefits packages pays back the investment of both time and money in spades.
The key point is that it’s not about spending more, but about spending more smartly. But even when retailers offer the right mix of benefits that work hard for both the business and employees, HR departments have a job to do if they are to communicate the overall package effectively. In the retail industry in particular, front line staff on the shop floor are far removed from HR managers based in head office. Further research from Cass Business School has shown that offering benefits but failing to tell staff about them is no better than not offering them in the first place. If a business fails to communicate what is available and what this means in real terms to employees they are essentially throwing money down the drain.
For retailers, the need to address the growing skills gap is clear, and it’s not enough just to upskill existing staff. It’s also vital to recruit top people who already have the necessary skills to address the immediate shortfall, and to retain employees so that investment in training is not wasted by them going to work for a competitor. Employee benefits, when they offer long-term financial security and match the needs of the changing workforce, are becoming ever more important in determining whether skilled employees stay or go.