Retail is in a challenging place right now. The stresses of the pandemic have taken a toll on frontline workers, causing many employees to switch industries. This in turn has led to retail becoming the second most badly affected industry in ‘The Great Resignation’ – with quit rates in the US alone climbing as high as 4.4% by last October.
Faced with an uber-competitive hiring market, the sector went into the busy 2021 holiday season with a labor force 176,000 people smaller than in February 2020. This was despite the average weekly retail wage increasing by 13% during the same period.
So how can the sector rebound? How can retailers attract people to jobs again? How can they retain staff and encourage people to build long-term careers?
And most importantly, how can they show their employees the appreciation and validation they deserve after 2 extremely tough years providing an incredibly valuable service to the public in difficult conditions?
To turn retail back into an industry that people want to join, we have to turn retail cultures into environments where people feel valued, nurtured, and – you guessed it – recognized.
Here’s why employee recognition could be the secret ingredient to a better future for retailers.
How recognition can help build culture in retail
Implementing employee recognition could be a game-changer for retailers in the current climate. When done effectively, recognition can help improve culture in retail in a number of areas, impacting everything from turnover to long-term development to the overall employee experience. Here’s a breakdown of some of the key areas where recognition can make a big impact.
Morale and retail employee experience
The pandemic was tough for retail employees, especially those on the frontlines. These workers stepped up during a crisis and provided a valuable service, but it came at a cost. Frontline employees often needed to put their health at risk to work, dealt with numerous lockdowns and temporary layoffs, and had to deal with more rigorous safety protocols to help slow the spread of COVID.
Understandably, this has left a lot of retail staff feeling disillusioned, burnt out, and overwhelmed. Making them feel recognized for their contributions is a small way to make them feel more valued and create a more rewarding retail employee experience.
Better retail company cultures could also help reduce turnover. If retail employees feel valued and rewarded for their hard work, they will be less likely to jump ship. Companies with recognition-rich cultures have been shown to have a turnover rate of up to 31% lower than average.
Of course, retail turnover has always been higher than most other industries, largely because it’s often seen as a short-term career option with little prospects. This is another myth that’s important to dispel if retailers want to build a sustainable talent pool in the next decade.
“Retailers need to explore ways to make jobs more satisfying and fulfilling and to provide employees a path to a sustainable career,” said Boston Consulting Group’s Head of Retail Nate Schenck recently. “Pay and benefits are one thing, and many studies show the challenge of making a living wage in retail. But there are a bunch of other non-pay factors that retailers need to consider. It all comes down to changing the employee value proposition.”
Recognition can play a role in this by making retail work environments more rewarding, and can also be used strategically by managers to incentivize learning and development and encourage long-term career growth.
Aligning retail cultures
Large retail companies often have multiple locations, different departments, and staff working in junior and senior roles both on the frontlines and in desk jobs.
Left alone, this kind of business ecosystem can be a breeding ground for microcultures, with different stores and arms of the business developing their own ways of doing things based on short-term goals or localized needs.
Employee recognition programs can help unify culture in retail. As opposed to other rewards like sales incentive programs which are available only to those in certain positions, employee recognition can be implemented across your entire organization, meaning everyone will see the benefit of it.
What’s more, by aligning your program to your company’s core values, your managers can reinforce them in their day-to-day work by rewarding behaviors that reflect the culture you want to create. This kind of values-based approach can also help keep your culture and approach consistent, even when dealing with high turnover or large numbers of seasonal or part-time staff.
The challenges of implementing employee recognition in retail
Of course, it’s worth acknowledging that despite these benefits, retail employee recognition programs have historically been quite difficult to implement successfully.
The problem is that most recognition software is not designed with retail in mind. The features and restrictions of most platforms don’t account for the unique structure of a typical organization in the industry or the needs of its workforce. This can lead to problems with…
Administration and management
Most recognition programs are either all-inclusive peer-to-peer systems where everyone gets a budget, or top-down platforms where managers have budgets and employees just receive rewards.
Retailers tend to need more flexibility than this. For instance, you might want rewards budgets to be restricted to managers only, or just to full-time employees but not part-time or temporary staff. At the same time, you might not want all employees to have a budget, but still want to give them an outlet to celebrate their teammates with non-monetary recognition.
Some companies remedy this problem by creating their own in-house programs, but these solutions often just create more administration problems. You’ll often find that rewards aren’t easy to track, and can create issues when trying to account for taxable benefits or manager expenses. It’s also nearly impossible to scale a program like this across an entire retail organization, meaning some stores have different kinds of systems, while others have none.
Even if a recognition program allows you to control who gets a budget and who doesn’t, you will probably still need to pay subscription fees for all of your employees to use the system. For large retailers with thousands of employees, this can amount to a huge cost, and all just for employees who will only use the system to claim rewards. It also takes money away from your potential rewards budget.
Deliverability and inclusivity
Did you know that roughly 70% of all retail employees don’t have company emails? A lot of employee recognition programs are ‘closed loop’ systems that require a company email account for employees to be included. This can mean that frontline workers can’t participate by default. Seasonal employees could also find themselves ‘locked out’ of the system before they have the chance to claim their rewards.
Further to that point, it’s worth remembering that the retail workforce is incredibly diverse and varied. A typical large retailer can employ everyone from students to seniors across a range of positions, including frontline staff in stores, office workers at a corporate level (both in-office and remotely), and others in dedicated functions like marketing, logistics, and business development.
With so many different groups to cater to, how do you create a recognition program that offers something everyone will value? A lot of recognition programs offer rewards from limited catalogs that simply don’t provide enough choice to appeal to a typical retail workforce.
6 steps to build retail employee recognition programs that work
So, how can HR leaders create retail employee recognition programs that work? Here's a 6-step gameplan you can use to build a program that will fit the needs of the retail environment.
1. Define your goals
What do you want from recognition? Are you looking to improve retention? Encourage growth and development? Align culture across your organization?
Defining your goals will help you figure out how to build a program that works for your organization, and give you some KPIs to judge its success.
2. Consider your employees
Who are you looking to recognize? Is it frontline workers, office staff, remote workers, or all of the above? Are your employees full-time, part-time, temporary, or (most likely) a combination of all three? Are they mostly younger, or older? Do they have company email addresses? How technologically literate are they?
You might feel like you know the answers to these questions already, but clearly laying out who the people that will be using the program are will help you make better decisions about your needs.
3. Choose the right recognition system
Once you have a clear understanding of your employees’ needs, you can figure out what kind of system works best for everyone.
An important part of this is figuring out what kind of rewards you need to offer. Does the system you’re considering offer reward options that will suit all of your staff, or is it too limited? Does it offer both physical and digital gift options?
You should also consider how you want your system to work. Do you want everyone to have a budget, or just managers and senior staff? Do you want non-monetary recognition options to get junior employees more involved? For retailers, flexibility in this area is usually key. You will want a system that gives you plenty of options to customize how you use it.
4. Educate your people about the value of recognition
No matter how well you structure your retail employee recognition program, it won’t be a success if your people aren’t on board.
This is especially important in retail because staff in different stores and locations often won’t have a lot of contact with each other. You can’t rely on usage to spread naturally from one arm of the company to another, so it’s crucial that you make every effort to encourage adoption across every level of the organization.
This starts with your leadership. At the very top level, you’ll need buy-in from your executive team to roll out your program. You should anticipate objections from your leadership team, especially given some of the challenges of running recognition programs in this industry, and be ready with solutions.
Once you have approval, the next step is making sure your managers use the program. Even if you’re including peer-to-peer recognition options, manager adoption is still crucial to making your program work.
It’s important that managers set an example for others to follow by making full use of their budgets and recognizing team members frequently and consistently. To make sure this is the case, you need to ensure that they understand the value of recognition, and how it will benefit their day-to-day work.
Finally, you should make every effort to get your whole team excited about your program. In the weeks leading up to its launch, communicate what employees can expect and how recognition will benefit them. Post-launch, continue to encourage adoption, and highlight instances where employees have recognized others publicly to show the value of the program in action.
5. Start small and scale up
This is an optional step. While it is possible to implement a program across your entire organization straight away, it can be a big undertaking, and you won't have the chance to test the specifics of your program and see what works before you launch.
A good alternative, if your platform allows it, is to create a pilot program with a smaller number of employees first. For example, you could run it in a couple of your stores in specific locations, or in one particular department of your company.
By doing this, you can be sure that you’ve chosen the right system, given the right permissions and controls to employees at different levels, and designed a program your people will use and value.
Once you’re sure the program is delivering what you want, you can roll it out to your entire organization.
6. Monitor and improve
After your retail employee recognition program has been running for a while, you should have some measurable KPIs to determine its success.
Within the program itself, you can track your participation rates to see whether it has captured the enthusiasm of your employees. It might be helpful to compare your results at different locations and staff levels to see if there’s any difference in adoption across your workforce.
You should also monitor employee feedback surveys, turnover, and other more macro organizational KPIs to see if there’s a correlation between the program’s introduction and any improvements.
This data isn’t just about monitoring success and failure. You can also use it to coach managers to improve, identifying where they might be falling short and highlighting some of the benefits of the program that you’ve seen across the company as a whole to inspire them to take action.
Your results might also highlight some areas where the overall program can be tweaked and improved. By continuously tracking your performance, identifying problems and working to fix them, you can set your company up for long-term success.
Want to learn more? Get our eBook
If you want to delve deeper into how recognition can help retail culture, check out our new eBook, Employee Recognition for Retail: The Complete Guide.
In this resource, we explore:
- The challenges facing retailers in the current landscape
- A model for creating great retail culture
- Barriers to building culture in retail
- Why employee recognition could be key
- Why most recognition programs don’t work for retail
- 5 steps for building effective retail recognition programs
- How Guusto’s features are designed to fit retailers’ needs
Click here to download your copy: