Human Resource Function a Retail Store Traditional stores experiencing a significant shift retail shopping. Customers specialization convenience making purchases.
The human resource function of a retail store
The human resource manager’s function has changed considerably over the years. Once, HR was called the ‘personnel department,’ and its primary role was issuing paychecks and managing employee issues such as pensions, bonuses, and vacation time from a purely administrative perspective. Today, HR has many additional, important tasks, including deciding what employees to hire that embody the company’s values; the nurturing of top talent, and dealing with interpersonal conflicts between employees. “The role of the HR manager, director, or executive must parallel the needs of his or her changing organization. Successful organizations are becoming more adaptive, resilient, quick to change direction and customer-centered. Within this environment, the HR professional, who is considered necessary by managers and executives, is a strategic partner, an employee sponsor or advocate and a change mentor” (Heathfield 2012).
HR has an active role in setting the priorities of the organization, and the people the organization chooses to employee are seen as directly linked to the quality of output. This is particularly true of retail-based industries. America is no longer a manufacturing nation: providing service has become the core function of many industries, given that customer service cannot be outsourced or transferred online.
One of the greatest challenges of a retail store is the hiring and retention of lower-level staff — the employees who actually ‘meet and greet’ customers and inform customers about the product and try to understand customer needs. These workers the customer’s first ‘point of contact’ with the business, yet the hiring process can be very perfunctory. These jobs often pay minimum wage, and after a quick background check and a submitted paper resume, someone may be hired. This approach, which does not take into consideration employee interests or personal attributes and how they gel with the company, can be disastrous. Worse yet, after an expensive training period, workers on the floor are often quick to leave, given the perceived similarity between one low-wage job and another low wage job. Even in a difficult job market, no company can simply assume that workers should be grateful for a job.
To cope with the problem of high turnover rates, the innovative electronics company Best Buy created a social networking site called ‘Blue Shirt Nation’ which enabled retail workers to openly share concerns with management and suggestions for improvement on an in-house social networking page (Grayson 2008:1). HR staff was instrumental in using technology to enable employees to connect with one another on a personal level, but also to provide the company with useful suggestions about altering aspects of Best Buy policy that might be ineffective. Best Buy is currently competing with many stores that are exclusively online-based, and offering additional solicitude through its service component is one way to create a sense of additional value generated for the customer when he or she shops at Best Buy.
Using a general Web 2.0 application on which all employees can post creates a sense of personal connection between the business and the individual worker. “When the company started an initiative to boost enrollment in its 401(k) plan, it sponsored a video contest, encouraging people to create clips on what retirement plans meant to them. The effort garnered so much interest and entries from employees, that Best Buy credits it with helping increase program enrollment by 30%. The winners in the contest got a small budget to redecorate their store, and a chance to present their video at Best Buy’s headquarters” (Grayson 2008:2). As a result of fostering this type of interactive environment, employee turnover is only 8% amongst those who use ‘Blue Shirt Nation.’
A participatory management strategy is thus a critical component of creating a united firm on every level of the organizational hierarchy. By getting everyone ‘on board,’ expenses related to retraining are reduced and managers can be more assured of customers receiving a cohesive customer experience from the moment they walk through the door. A participatory strategy is a positive strategy, versus a coercive strategy that requires company employees to say certain things and to smile in a certain manner. When employees feel they have had a hand in setting policy, they are more inclined to be enthusiastic and persuasive in fulfilling their tasks. They key to retail is service, and participatory strategies like recruiting input from workers through social networking sites through the corporate Intranet are important tools that facilitate this process. Social networking can also be used to educate employees about important issues such as diversity training in a non-didactic and fun manner. Stressing to employees the company’s welcoming of historically-discriminated against groups and showing how Best Buy is willing to promote a diverse range of employees reinforces the image the company is trying to foster unity and growth amongst its staff.
Of course, it is not simply important to retain employees, but also to recruit high-quality employees to begin with. Employees must have the necessary personal connection to the product and a sense of investment in the life of the typical customer. All too often, retail employees simply choose to apply to a company because of a ‘now hiring’ sign, versus a sense of personal investment in the company’s output. Offering even slightly higher salaries than the minimum wage or industry average is one way to do this, which will enable the company to be more selective in terms of the individuals it selects to apply. Another way to encourage more employees of a higher commitment level to apply is to offer more comprehensive benefits to all employees. Starbucks has been able to draw more qualified candidates by offering full health benefits. Individuals who might not even consider applying to a minimum wage job may select Starbucks, simply out a desire to have health insurance.
While ‘nickel and diming’ employees and keeping wages low has been a strategy deployed effectively by some retailers, such as McDonald’s (where the standard operating procedures of customer interaction are so regulated that training is extremely perfunctory), overall, employers that wish to ‘get the best’ and ‘retain the best’ may find that a slightly higher price point for labor costs is justified. Today, particularly for small up-and-coming firms, service generates customer loyalty. Firms that cannot compete on price can still compete upon service. Employees that are able to give such higher-quality service can be very valuable to the organization. HR can play a crucial role in designing benefits packages for the company that are competitive and suit the needs of the typical worker seeing employment.
HR should ensure that the hiring process can also more perfectly replicate the day-to-day life of an employee in the store. Rather than filling out a paper application alone, job candidates can be asked to participate in group interviews and role plays. This is often a superior way of understanding how the employee operates in a social context. Retail is fundamentally a social job, and employees must have good interpersonal skills as well as a strong resume.
In addition to adopting a more participatory management style and a recruitment process that emphasizes selecting quality employees rather than low-cost employees, a third and final potential solution is to create a mentorship program between more experienced employees and new workers. Tensions between workers based on age or number of years at the company can create friction on the staff, which spills over into ineffective customer interactions. Creating a bond between two employees (and compensating the mentor for the additional labor) bridges generational divides and also uses the strengths of both workers to educate new staff members. Older staff may be more people savvy and knowledgeable about the product; younger staff members may be more aware of how to use technology.
Grayson, Kathryn. (2008). Best Buy employee site a model for big firms. Minnesota-St. Paul
Business Journal. Retrieved:http://www.bizjournals.com/twincities/stories/2008/05/05/story1.html?page=4
Heathfield, Susan. (2012). The new roles of the human resources professional. Retrieved:
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