With a notoriously high turnover rate hovering above 60%, retail organizations often grapple with how to quickly and cost-effectively hire and train staff to ensure a consistent brand experience for customers.
Managing a young, highly distributed, and often-seasonal workforce brings with it a number of unique challenges when it comes to employee engagement and development.
But the connection between employee engagement and business performance is unmistakable: Retail employees who are engaged and motivated bring in 69% more revenue than those who are not. As your brand ambassadors, the quality of your frontline staff and the services they provide directly impact your bottom line.
To succeed — especially when also contending with shrinking margins, increasing competition for customer loyalty, and ever-changing consumer preferences — you need to attract, develop and retain competent, enthusiastic and accountable employees. But in today's retail environment, that's easier said than done.
Unless, of course, you have an effective talent development strategy to keep employees engaged and motivated to deliver a great customer experience.
Solving retail's employee engagement crisis
Improving employee engagement — especially in the retail space — is no easy task. Companies have tried offering free food, company parties, merchandise discounts, and everything else under the sun to keep their employees happy. But all these efforts have a tendency to miss the point.
The employee experience is the real key to employee engagement. And employers need to do a better job of distinguishing perks from experiences. Perks are nice, but they do not keep employees engaged with their work.
Here are four ways to deliver an exceptional employee experience that moves the needle on engagement and, in turn, the bottom line:
1. Let associates in on the bigger picture
In retail chains and larger hospitality organizations, sometimes it's hard to give all employees the "bigger picture" so they understand why they're being asked to do certain things. But everybody wants to know their work has value and impact.
As Sam Stern, principal analyst at Forrester notes, "Employees up and down the organization want meaning and purpose; they want dignity in their work. This is important not only for office workers at headquarters but is also hugely important for retailers to think about with store associates, including seasonal workers. No matter their position, retail workers want to know that what they do at work connects to the larger organization."
Linking individual goals to higher-level organizational objectives gives employees a context for their work and helps to drive employee engagement. As one example, the San Diego Zoo directs managers to choose five individual goals, three of which are to be tied directly to overall organizational goals and two that can be tied to the manager's specific department. Even with this option, most managers elect to choose all five of their goals from the list of organizational goals. This guarantees that the goals are cascaded down from the top levels of the organization and that employees are not left feeling they are working towards five arbitrary goals.
2. Facilitate social and collaborative learning
A recent survey on the state of employee engagement by Saba found that the majority of HR leaders and employees agree that in order to more effectively communicate with the younger workforce, companies need to increase social media capabilities. Nearly three quarters of both HR leaders and employees believe that social tools that help employees on teams collaborate from different locations is more important or much more important than it was even two or three years ago.
The informal, collaborative learning that happens every day amongst colleagues is just as valuable as your formal learning program. Retailers can help facilitate this type of learning by creating social learning communities where employees can collaborate and ask questions, as well as by enabling instant feedback and recognition from peers and managers.
Leading specialty apparel retailer Express found tremendous success delivering personalized, social learning experiences targeted at the needs and preferences of the millennials that staff most of its stores. They were able to cut learning and development costs, increase associate engagement by 23%, and drastically reduce turnover by connecting its team with one another using content from outside the business and with user-generated content and ideas.
3. Shift to ongoing performance management
Many performance management programs fall short of expectations for both the organization and the employee. The reason for this is that performance management has seemingly become a periodic ritual to be endured, rather than an ongoing conversation that uses feedback and coaching to align, engage and inspire. Real-time feedback and continuous coaching helps employees perform to their full potential, improving engagement, retention and productivity.
By moving to an ongoing approach to performance management — where coaching for growth is prioritized over "managing" performance — retailers can better meet the modern workforce's growing demand for real-time feedback. And with the help of performance management technology, organizations can put continuous coaching and feedback at the heart of their talent management processes, helping managers and employees have impactful discussions that actually improve performance — without it becoming a burdensome task.
Northern Tool + Equipment — a specialty retailer with 2,500 employees in 20 states — is one example of a retailer that has found success by shifting to an ongoing performance management model. The company has created a culture of continuous coaching and feedback by swapping out the antiquated annual performance review for an ongoing process that includes regular check-ins, multi-directional feedback, and integrated development — all which can be viewed, measured and acted upon by leaders.
4. Embrace a culture of continuous learning
By cultivating a culture of continuous learning, organizations can move beyond simply “checking the box” when it comes to training, delivering learning experiences that engage employees and translate into a better customer experience. Retailers can help develop an organizational mindset that prioritizes ongoing employee development by incorporating aspects of learning and development into the company mission statement and goal-setting process, as well as empowering staff to drive their own development by embracing and facilitating informal, self-driven learning.
West Marine's leadership team, for example, worked together to create a culture that supports continuous learning, growth and development. This journey eventually evolved into a companywide personal development program that is employee-driven and designed to put people in the best position for success. As Helen Rossiter, senior talent development specialist at West Marine reveals, "Faced with a new and challenging retail environment and changing perceptions of retail pay, including housing and workplace demands, our senior leaders knew we had to change so the company could thrive."
The intersection of employee experience and customer experience
Retail is a people business, and by focusing on the growth and development of your people, you can harness their full potential, keeping them engaged and motivated to deliver exceptional customer service and meet sales and productivity goals. After all, just a 5% increase in employee engagement has been shown to lead to a 3% jump in sales growth.
By implementing strategies, processes, and technology that open up communication, facilitate real-time feedback, encourage continuous learning, and foster a true team atmosphere, you can engage employees and help them feel like they are part of something meaningful — and that their future is with you.