Disruption. It’s been one of the most frequently bantered buzzwords within the retail industry for close to a decade, often used by experts and analysts to describe the impacts of newly introduced technologies, store concepts or modes of service. The results of such disruptions are, in most cases, positive and lead to the development of even greater advances, innovations and enhancements to the retail experience. And, although the very negative effects of the COVID-19 global pandemic may yet yield a similarly favourable outcome for the industry, the destruction and havoc that the virus is currently wreaking on operations are creating comprehensive challenges for many, posing potentially grave consequences if these challenges are not overcome. One of the hardest hits taken by retailers, a repercussion of the pandemic that bears significantly on the future health of the industry, is the collective strain that’s been placed on staffing efforts across the country. If you ask the opinion of Suzanne Sears, President of Luxury Careers Canada and retail staffing expert, this fact on its own equates to what is perhaps the most disruptive time in the history of retail, requiring merchants and brands to leverage creativity and shift their organizational mindset in order to find and retain the right retail talent.
“Retailers are approaching the pinnacle of crisis with respect to the staffing of their stores and operations,” she asserts. “The biggest challenge they currently face is a lack of potential staff to recruit from. That might seem contradictory given the numbers of people who have been laid off in the past year, leading some people to think that there must be thousands of applicants responding to each job posting. But the reverse is actually happening. And there are a multitude of reasons that help explain why. One of the biggest influences effecting this trend is the mass exodus of people from urban centres who have left to live elsewhere, outside of the city. And as we all know most major retail is concentrated in these urban centres across the country. It’s taken away from the population-base that retailers draw from in each of these cities, depleting the pool of talent in those areas.”
Draining Urban Population
According to recently released data from Statistics Canada, a record number of Canadians moved away from Toronto, Montreal, and Vancouver — the country’s three largest cities. In fact, between July 2019 and July 2020, an estimated 87,444 city-dwellers gave up their urban digs for the slower and, presumably safer, settings of the suburbs, smaller towns, and rural areas. This compares to an average annual exodus of 72,686 people for the previous three years. These numbers alone are startling. But what’s more significant is the fact that much of the urban departure currently taking place is represented by youth and young families. Nearly a third of those who left Canada’s major urban centres were between the ages of 15 to 29, while a whopping 82 percent were under the age of 45. Considering the fact that individuals within these younger cohorts are those who retailers would like to attract, either for frontline positions or senior management, and the current drought in retail talent starts to make sense.
Sears describes it is a trend that’s influenced by a feeling of fear among prospective talent and underscored by a prevailing uncertainty within society concerning safety, health, and wellbeing. For those who haven’t left the city behind, she says, that fear and uncertainty are showing up in a reluctance to work frontline positions, whether in environments like shopping centres or street-side locations, due to their unwillingness to engage directly with the public during this time. Thinning the availability of talent even further is the fact that for those working entry level or intermediate jobs, this is a time in their lives when, generally speaking, they are starting to have children and raise families. And because of the resulting ambiguity and unpredictability around the availability of schooling and daycare, many are postponing their return to employment, preferring to wait until there’s some reassurance that their children will be looked after in a safe environment while they work.
A Thinning Pool of Talent
In addition, its widely estimated that there is a disproportionate number of women currently remaining outside of the workforce to that of men, resulting in an awkward demographic imbalance within the industry. It’s awkward in that it seems well-understood by most that there are certain jobs that don’t attract men, like those in beauty and cosmetics, lingerie and women’s apparel stores. And if this commonly accepted perception holds true, it could place even further strain on the restaffing efforts of retailers operating within these verticals and others of the like. And, as though these influencers and forcing functions weren’t causing enough turmoil and chaos, Sears adds that members of the workforce who are close to or nearing retirement have decided to end their careers early as a result of the pandemic and the difficult situation surrounding it. With their leave from the industry, they take with them their years of experience, understanding and know-how. Cumulatively, she explains that these challenges are presenting retailers with a real staffing conundrum that they must answer in order to conquer their current dilemma.
“As a result of these primary pain-points currently burdening staffing efforts within the industry, retailers are left with few people on the bottom end of their organizations while the people with the expertise are leaving,” she laments. “What this has resulted in is a very thin supply of talent between the ages of 45 and 55 who are all at intermediate level stages of their careers. It’s presenting retailers everywhere with a massive challenge when it comes to staffing. And it’s a challenge that is going to require them to become creative and reimagine talent acquisition with respect to the ways they’re currently finding people to fill positions within their organizations.”
Rethinking the Role of Human Resources
The traditional approach to filling positions, Sears explains, in which retailers post job opportunities and receive 100 or more applications to find the right person isn’t as effective as it once was. More often today, retailers are being made to work for their hires, to go out and find prospective employees rather than wait for the talent to come to them. It’s a trend that’s been taking shape in recent years, but is yet another example of a shift that’s been accelerated by the impacts of the pandemic. And, Sears believes that to properly address this shift, to enable their organizations to find the right talent rather than simply receive it, retailers need to rethink the role that human resources play in this pursuit.
“Human resources departments have, for the most part, served a functional role within retail organizations,” she says. “They’re responsible for paper processes related to people coming in and people going out of the organization. And they’ve also been very administrative in their approach toward their management of the people for the company. In light of all of the challenges effecting retail staffing efforts, they now have to start serving more of a marketing function, developing ways to attract talent to the organization. Further, their approach needs to be one-on-one, personalized and relationship-based. They need to reassess their role and purpose within their organizations, perhaps even reinventing themselves to a degree in order to attract and retain employees.”
Internal Growth and Development
Another critical shift that retailers are going to be required to make, says Sears, involves placing a greater emphasis on the internal development of talent within their own organizations. Though there are some within the industry that have already instituted internal programs and initiatives to nurture and foster their young and emerging skilled employees, it’s not a strategy that’s gained widespread adoption to date. However, Sears suggests that it’s something that could change very soon if retailers have any ambition to boost the reputation of the industry and increase the attractiveness of retail as a viable career option.
“Most of the skills that retailers are currently looking for are not abundant in Canada,” she explains. “And in light of the scarce number of retail post-secondary programs available within the country, retail organizations are going to need to offer educational opportunities to prospective employees in order to train and grow the talent that they need from within. These are initiatives that were once common throughout the country forty-plus years ago. In order for the industry in Canada to succeed and thrive going forward, and to address their need for talent that just isn’t available currently, they’ll need to consider revisiting their approach from decades ago and reintroduce the same kind of management training and development courses and programs that they once did.”
Offering Adequate Compensation
Beyond the pitfalls of the traditional retail approach to staffing and the improvements that need to be made in order to achieve greater effectiveness and success, the significant matter of compensation, and its power to entice or deter prospective talent, adds another layer of complexity to the already complicated mix of challenges influencing retailers’ efforts to fill positions. And although there is some disparity across the country with respect to provincial minimum wages, Sears suggests that it’s not enough and does nothing to enhance the appeal of a job in retail, and that organizations will need to offer a little more in order to achieve their staffing objectives.
“If retailers want great talent rather than okay talent, they have to provide an income for their employees that is enough to live on,” she states. “The figure that’s generally considered ‘enough’ to live on is somewhere between $36-46,000 a year. Minimum wage falls short of that no matter where you’re working in the country. The fact of the matter is that people will leave your organization for any company that’s willing to pay them a dollar or two more than you’re paying them. Compensation is that critical to them, and rightly so. As a result, retailers will need to adjust to the fact that the talent they seek is going to cost them three to five dollars more an hour than they’ve ever been accustomed to paying before. It’s going to hurt. But they’ll need to find ways to offset for this increase in payroll. It’ll force them to find greater efficiencies in inventory, shipping, and other areas of the business. It’s also going to require a new mentality on their part if they are to find the calibre of employee that they need to succeed.”
Challenges and Opportunities
All told, the challenges faced by retailers in their bid to staff their stores and organizations amid the pandemic are not in short supply. There are a number of different levers being pulled at once today that are impacting the industry and their quest to find the right talent. It’s requiring retailers to view the current situation through an equally vast number of lenses as they attempt to increase their appeal among a thinning pool of prospective employees. But, as Sears points out, along with the challenges, there are also opportunities available for organizations to capitalize on as we collectively move closer toward an end to the pandemic and social restrictions.
“The pandemic will at some point be behind us, when everyone is vaccinated and people become comfortable going out again and visiting their favourite retail locations. It may not be until sometime in 2022. But there will be an end to our current situation soon enough. And when retailers are able to open their doors to the public, they’re going to want to be properly staffed with the right talent that will offer the exceptional service and expertise that their customers have come to enjoy and expect from them. Those who make the necessary adjustments to their internal hiring and recruiting processes, their mindset with respect to the development of talent, and the compensation and benefits that they are willing to offer prospective employees, will place themselves a step ahead of their competitors, positioning their organizations for future growth and success.”