Retail, like other industries, is facing challenging times. As we mentioned in our recent ‘HR Now’ blog, employers are facing a world characterised by:

  • continuous change – including rapid digitisation and globalisation of service offerings,
  • doing more with less – this is especially so in retail, where customers continue to demand more value for lower expenditure, while wage costs continue to rise, and
  • the emergence of ‘retailtainment’ – not just engaging with customers in-store, but using tools like brand ambassadors to get customers interested and in the mood to buy. The name of the game is to create a ‘customer experience’, which goes beyond merely the hard sell.

What does this mean for employers in the industry? There are three key issues facing retail employers in the next 12 months:

  1. Building employee engagement

Despite the online revolution, retail is an industry characterised by personal interactions between customers and staff. Debate continues about whether human interface will eventually be overtaken – but at heart, retail is a relationship focussed business, even for “pure-play” online retailers (who still need to engage customer service representatives to interact with customers online or by phone). In the age of social media, customer perceptions about the service they receive from staff has real and often immediate impacts. This means that ensuring that your workforce is engaged and attentive is vital to retention, productivity and long-term success. This drives the need to think about, and plan for, how the business will engender the organisation’s chosen culture – particularly with a geographically dispersed workforce.

  1. Transforming the workplace

Given the pressures identified above, in traditional workplaces like retail, there is a pressing need to rethink the way work is performed; the way relationships exist in the workplace; and the regulation which impacts it. A prime example of this is the rationalisation of supply & delivery chains – as the old ways of distribution and selling continue to be refined and redefined. Retailers now need carefully to manage the relationship with those who ‘deliver’ purchases to consumers (whether employees or contractors) – customer experience with deliveries will have a direct and profound impact on the way the retailer is perceived.

Achieving this transformation within a collective bargaining environment is a significant challenge in many workplaces – that model is built around a traditional adversarial engagement between employer and employees. Successful organisations are now adopting a more sophisticated approach, which involves ensuring that employees (and others) are not just another ‘input’ to the business, but are aligned with the business’s strategic direction. This involves a number of elements, one of the most important is to move beyond the narrow focus of traditional ‘enterprise bargaining’ and thinking more broadly about the ‘whole relationship’ with employees. This means considering how to build relationships with employees outside the frame of enterprise bargaining.

  1. Driving flexibility and productivity

Ensuring you have flexibility, particularly in relation to labour, is critical to being able to harness the benefits of rapid technical change and meet the effects of globalisation. Flexible and adaptable businesses require commensurate HR support to drive and implement change effectively. As we’ve mentioned previously, this means working to avoid or minimise impediments such as restrictive terms in enterprise agreements.

Like many employers, the retail industry has a history of agreements which fix terms and conditions that may be out of line with current market conditions and the needs of a modern business. There are ways through the maze – but it is all the more important for businesses to strategise and plan carefully for the future to maximise the prospects for positive change.