INDUSTRY SNAPSHOTS. Retail

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1 INDUSTRY SNAPSHOTS Retail 1

2 Overcoming HR Challenges in the Retail Industry Many retailers are coping with regulatory changes and retention challenges by cutting hours and reducing the time and cost of new hire training. But they still need employees with strong sales and customer service skills who see retail as a viable long-term career. Recruiting, retaining and engaging those employees require lowor no-cost benefits that can support both their personal and professional goals. 2

3 Industry Challenges Internet sales are booming at the cost of direct store purchases, and customers are favoring off-price stores that offer fashion at an attractive price. Many retailers are finding that they must restructure if they want to survive. Some of the other top challenges 1 include: 1. New technology Consumers must have the newest Apple product or other new innovative mobile, wearable and portable products each time they are released, and they are not likely to spend on technology and apparel at the same time. Retailers must be able to attract customers even during a new technology product launch. 2. Millennial customers Millennials are real-time consumers, shopping for today s needs and waiting until the last minute to shop for tomorrow s events. Because they are afraid of a recession or lack of employment, they want to own less and lease more. 3. Content curation Providing a personalized and relevant experience for each customer through one-to-one marketing requires more content and curation. Most retailers are investing in content management systems and mining consumer insights to help understand the story consumers want to hear. 2 3

4 HR Challenges Among the challenges HR professionals in the retail industry face are: 1. Employee retention With average voluntary turnover at 29 percent, 3 retailers are constantly challenged with finding innovative ways to recruit and retain qualified employees. 2. The cost of turnover Replacing one employee costs, on average, over $5, Per 1,000 employees, the average retailer loses more than $1.6 million per year due to turnover. 5 $5,700 average cost to replace one employee 4 $1.6 million (per 1,000 employees 5 ) 3. Employee productivity With 37 percent of all employees saying they are distracted by financial stress while at work, 6 the average retail company is losing more than $724,000 every year per 1,000 employees % of employees are distracted by $724,000 (per 1,000 employees 7 ) financial stress while at work 6 4

5 Trends An ongoing focus for retailers is to omnichannel. Bringing online and offline together is important in every facet of a retail business. 8 Other trends include: 9 1. Cyber security Cyber security will continue to cut across all aspects of the business: disruption, convergence of digital online, social, new ecosystems, and mining customer insights. 2. Retailers will continue to upgrade technology Cloud computing is central to modernization and a key issue since retailers often lag behind other industries in embracing cloud technology. There is also now much more rapid consumer adoption of mobile payment technologies driven in part by competing payment platform introductions. 3. Enhanced benefits packages In the current marketplace, employees have more flexibility to seek out employment opportunities that better fit their needs and wants rather than remain in a position for its job security. However, 41 percent of employees say improving their benefits package is one thing their employer could do to keep them in their jobs. 10 Employers may look at enhancing benefits packages with flexible work hours, expanded benefits, more vacation or medical leave options. As voluntary benefits have become more mainstream, they play an important role in enhancing benefits packages to satisfy employees needs. Employers are increasingly embracing non-traditional voluntary benefits as a method of providing enhanced benefits packages. Purchasing Power s employee purchase program is one of the non-traditional voluntary benefits that supports key HR objectives by providing a no-cost, no-liability benefit that gives employees a manageable, convenient way to access products and services that are often out of reach. 5

6 Citations 1 Forbes.com, Every Sign is Saying Retailers Must Restructure, Walter Loeb, Jan Deloitte.com, 2016 Retail Industry Outlook. 3 US Bureau of Labor Services Job Openings and Labor Turnover Survey. 4 CBSNews.com, How Much Does It Cost Companies to Lose Employees, Suzanne Lucas, Nov US Bureau of Labor Statistics Employer Costs for Employee Compensation. 6 Harris Poll conducted on behalf of Purchasing Power, US Bureau of Labor Statistics Employer Costs for Employee Compensation. 8 VendHQ.com, Retail Trends and Predictions, Deloitte. com, 2016 Retail Industry Outlook Aflac WorkForces Report. About Purchasing Power We help employees who are underserved by traditional financing options access life-enhancing products and services. Employees can purchase the items they need and affordably spread payments across 12 months to give them peace of mind and control over their finances. Our pricing is transparent with no hidden fees, no interest, no credit checks. Why We Do It To improve employee financial well-being To empower people to take control of their lives To help organizations recruit and retain employees Visit us at PurchasingPower.com/Employers. Purchasing Power is a registered trademark of Purchasing Power, LLC. Other trademarks or registered trademarks used are the property of their respective owners. Pub. Date Purchasing Power, LLC. All rights reserved * Definitive 2016 customer survey responses 6