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    The Ultimate Guide to HR Tech in the Retail Industry

    December 30, 2022

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    HR Technology in the Retail Industry

    The retail industry is one of the largest private industries around the world and has witnessed significant changes during and after the pandemic. This article discusses the retail industry landscape and how HR technology can accelerate the efficiency and growth of retail companies.

    Table of Contents


    An Overview of the Retail Industry

    HR professionals in the retail industry are gearing up for ‘The Great Retail Reset’.

    Employing over 142 million people, retail is one of the largest employment generators in the world. According to a report published by Fortune Business Insights, the global retail industry is set to grow from $5.84 billion in 2021 to $18.33 billion in 2028 at a CAGR of 17.7% in the forecast period, 2021-2028.

    However, the retail industry has been in the eye of the storm for the past two years. It began with COVID-19, which disrupted global supply-chains and lifestyles in a way no one could have imagined. Over two years of living in the shadow of the pandemic brought about permanent changes in customer behavior. Customers now demand multi-channel service, free home delivery, competitive discounts, and so on.

    Hot on the heels of the virus, arrived the ‘Great Resignation’ aka the ‘Big Quit’, which saw 4.5 million workers quit their jobs globally. In fact, it is estimated that as many as 40% of frontline retail workers are actively considering quitting their job.

    A slew of challenges forced retailers to focus on profitability. Retail companies had to reevaluate and reinvent everything from customer expectations, distribution models, retail store operations, supply chain processes, safety procedures, recruitment, and staffing, etc. Which is what Deloitte is calling The Great Retail Reset.

    Learn More: Catch Up on the 4 HR Trends Changing the Retail Industry in 2022

    Digital Transformation in Retail Companies

    Way before the pandemic, the retail industry was already leveraging e-commerce, m-commerce, social media, IoT (Internet of Things), etc. to gain a competitive edge. In fact, it was one of the first industries to recognize the importance of leveraging data and analytics to deliver engaging customer experience.

    Technology is poised to play a central role in the post-pandemic world as the retail industry gears up to tackle labor shortages, global supply chain crises, changed customer behavior, and growing competition. In the last two years, the industry has significantly accelerated tech adoption and digitalization across functions, especially the HR function in retail.

    The HR Landscape in Retail

    The retail industry thrives on its workforce. Employees, especially storefront workers, are the face of the business. Every interaction between a customer and an employee plays a role in shaping the perception of a business. However, the last couple of years have been turbulent for the retail workforce globally. Some of the common HR challenges facing the retail industry include:

    1. High Attrition and Low Retention

    The retail industry has always had a higher employee turnover than most other industries. The post-pandemic landscape has seen the attrition rate increase from 15% during pre-COVID times to 25% in the current market.

    2. Seasonality in Employment

    A challenge unique to the retail industry is the seasonality of employment. Due to factors such as multiple shift timings, varied commission structure, overtime policies, large, distributed workforce and so on, running payroll becomes a complex process.

    3. Dynamic Shift Management and Compliance

    During the pandemic, regulations demanded that companies have only a limited number of workers on the floor at any given point in time. The splitting of the workforce into multiple groups, assigning shifts and ensuring that all of them comply with regulations has resulted in increased operational complexity for retail companies.

    4. Bulk Hiring

    Despite being part the largest employers in the world, HR professionals in the retail industry have had significant trouble with labor shortage in the past two years. The industry urgently needs to streamline its talent strategy to enable quick, efficient, smooth recruitment and ensure processes that will retain and nurture talent.

    5. Lack of Digitalization

    One of the legacies of the pandemic is that documentation has become a part of daily life. Vaccination cards and health reports, etc. have to be easily accessible. Managing this paperwork for thousands of employees and maintaining the privacy and security of the data is a challenge that all retail companies are battling.

    6. Need for Upskilling and Career Development

    There is a dire need for the industry to upskill workers so that they can handle the demands of the post-pandemic retail industry. At the same time, the higher attrition rates have also made it necessary to invest in career development initiatives so employees remain motivated to stay on with a company.

    7. Lack of Diversity

    Movements such as Black Lives Matter and #MeToo have played a major role in reigniting the topic of diversity, equality and inclusion at the workplace. HR leaders in retail are under greater pressure to remedy the status quo and improve diversity, equity, and inclusion (DEI).

    8. Increased Need for Workplace Safety

    The pandemic renewed the focus on workplace safety. In the light of a spate of unfortunate attacks on retail stores across the United States, the physical safety of the workers has also been under the scanner.

    Learn More: 9 Characteristics of HRM that Makes all the Difference

    The State of HR Technology in the Retail Industry

    One of the key outcomes from the rather tumultuous two years between 2020-2022 was that business leaders in the retail industry became more cognizant of the need to digitize the HR function across the retail industry.

    While they have invested in HR technology, a variety of factors including complicated UI, poor user adoption, lack of a mobile application, incomplete implementation, etc. have impeded successful outcomes.

    The exception has been the latest state-of-the-art cloud-based mobile-first HR solutions which promise better employee engagement and a more personalized employee experience while improving efficiency and productivity.

    We realized that for the highly ambitious scale-up that the business had planned, we as HR needed to liberate ourselves and enable the workforce with a self-service model. This could happen only if we had a mobile-friendly app-based construct.” - Ganesh Subramanian, CHRO at More Retail.

    5 Ways Cloud-based HR Technology Can Change the Game in Retail

    Unlike legacy platforms, cloud-based next-gen HR platforms are both agile and flexible, making them perfect for the ever-evolving markets of today. Here are 5 ways in which cloud-based HRMS platforms can help the retail industry:

    1. Upskilling and Reskilling Employees

    In a hypercompetitive space such as retail, every advantage counts. A well-trained workforce translates into better customer experience, increased sales, and better brand loyalty; as well as improved morale and enhanced employee experience.

    Cloud-based HRMS platforms support training, along with learning and development (L&D) by enabling companies to:

    • Design and execute training programs efficiently
    • Map employee skill sets and career aspirations to overarching organizational goals
    • Host relevant training programs
    • Support peer-to-peer collaboration and learning

    Technology can be used to analyze engagement patterns and collect feedback so they can be used to improve career advancement and employee engagement programs across the company.

    HR leaders must set clear, tangible, data-oriented goals, align program goals to broader organizational goals, and track and record metrics. It is critical to spell out the details, and chart out how exactly investment in employee engagement programs will benefit the company.

    2. Streamlining the Hiring Process

    Recruitment in retail continues to require manual intervention across functions. However, adopting an efficient, cloud-based HRMS platform can streamline and bring hiring and recruitment processes up to date. Here’s how you can use HR tech to hire good talent quickly while providing a good candidate experience:

    • Hire quickly and efficiently in bulk using AI-enabled features like resume parsing and resume stack ranking.
    • Deliver a great candidate experience through a seamless and transparent hiring process.
    • Improve diversity and inclusion with the help of AI-enabled technology that calls out discriminatory words or phrases in job descriptions.
    • Post across multiple job boards through a single platform.
    • Commission a chatbot to easily handle candidate queries, improving the candidate experience while saving HR bandwidth.

    3. Improve Employee Retention and Reduce Attrition

    Attrition remains a significant focus for HR professionals in retail. However, cloud-based HR tech is helping bridge the gap by enabling personalized employee experiences. Here’s how you can use HR tech to tackle high employee turnover:

    • Deliver a personalized experience during onboarding so an employee develops a positive perception of the company and its culture.
    • Consistent check-ins between managers and employees, enabling them to discuss performance and progress on goals throughout the year.
    • Recognize the top performers in the team through a structured appraisal process, reward programs, etc.
    • Empower employees to tackle all the administrative activities including attendance marking, leave requests, L&D, HR queries, grievance redressal, etc. on their mobile devices.
    • Some HR platforms also come equipped with their own internal social networking platform like Darwinbox’s Vibe, etc. These platforms are great places to promote peer engagement, recognize employees, make official announcements, etc.
    • Conduct pulse surveys, polls, etc. to gather employee feedback and check the workforce's morale.

    4. Reduce Paperwork

    Cloud technology can be a savior for managing documentation and paperwork. SaaS and cloud-based HR software can help companies keep track of vaccination statuses, along with relevant documentation. The tools ensure that the data is easy to access or retrieve at any time through keyword search. HR tools such as Darwinbox are also equipped with the latest security features to protect employee data.

    Considering that vaccination and health statuses are now part of daily monitoring, HR departments will realize value in investing in technology to manage this. Technology can help with recording and constantly updating the vaccination and health statuses of all employees, and map this with an employee’s master file in the company’s core HR record.

    COVID-19-related certifications aside, there are multiple documents that retailers typically deal with. Retail firms with large workforces at stores are governed by multiple labor laws, and this comes with a spate of documentation and paperwork.

    Next gen HR software can also be used to manage and update documents in real-time. This will help companies comply with government regulations and take care of employee safety.

    5. Encourage Diversity, Inclusion and Representation

    A 2019 McKinsey report showed that companies in the top quartile of gender diversity on executive teams were 25% more likely to experience above-average profitability than peers. HR leaders in retail are designing policies that support diversity and create an inclusive workplace. However, HR tech will play a vital role in effective implementation of these policies.

    For example, software can be used to inform employees of these policies and help HR leaders enforce them. For instance, HR tech can be configured to parse resumes in accordance with DEI policies. Internal HR platforms can be used to set up sensitivity training programs, monitor employee activity to track deviations, and offer unbiased third-party grievance redressal in case of issues. Companies can introduce mentorship programs and dotted line accountabilities to create an inclusive, employee-friendly workplace.

    Technology can also help make sure all communication supports diverse languages. This is something that often slips through the cracks, but initiatives such as multi-language communication, conversational channels for grievance redressal and support, and mobile access for support can make a huge difference in how inclusive a company is.

    Join the HR (R) evolution

    The retail industry is all about exceptional customer service. Surveys conducted by Gallup have shown that highly engaged employees are 14% more productive and deliver 23% more profitability. Even as HR professionals in the retail industry strive to create a highly engaged and motivated workforce, there is a growing realization that HR technology will play a vital role in shaping the retail industry’s future. Modern HCM platforms like Darwinbox, designed with employee happiness and HR efficiency in mind, can easily help companies streamline tasks across the HR lifecycle with tools and features ideal for the retail companies of tomorrow.

    To kickstart the HR digital transformation process in your company, schedule a Darwinbox demo today!

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