As retail and hospitality get back to business, something seems to be missing – staff. Dubbed ‘The Great Resignation’ in the US, the UK is also being hit by workers who have had time to take stock over the pandemic and, in many cases, decided to change path. 

It’s always a worry when something gets a name. Interviewed by Bloomberg Businessweek, Prof Anthony Klotz of Texas A&M University was the first to coin the term ‘The Great Resignation’, after 4 million people quit their jobs in the US in April, according to the US Labor Department.

It was the biggest spike in resignations on record, with 650,000 of those who resigned working in retail.

Klotz noted that people who had hung on to jobs during uncertain times were now ready to make a move in the hope of something better. Many workers are, it seems, rethinking what work means to them, how they are valued, and how they spend their time, with Korn Ferry revealing that 94% of US retailers are struggling to fill vacant roles.

It’s not just a US issue. A survey by HR software platform Personio found that 38% of employees are looking to change roles in the next 6-12 months across the UK and Ireland, while the Report on Jobs, published by KPMG and REC, pointed to a marked upswing in the number of UK retail sector vacancies during July. 

The Temporary Retail Vacancies Index – which measures demand for temporary workers in the retail sector – posted 65.7 in July, well above the 50 neutral mark and up from 64.5 in June to its highest reading since the series began in March 2017.

The index pointed to a sharp and accelerated increase in the number of open positions for temporary retail staff.

Retail firms also rapidly searched for permanent workers in July, adding to a record expansion in vacancies at the end of the second quarter. The Permanent Retail Vacancies Index registered 61.1 in the latest survey, one of the highest readings in the series’ history.

KPMG partner Don Williams says the reasons are multiple and, despite retail and hospitality’s previous reliance on EU workers, he believes that while Brexit is a component other factors have been more important.

“Had we had Brexit alone then I don’t think this would have been anywhere near such an issue,” he says.

“But because of Covid many workers returned home during furlough and now they are questioning whether they want to come back. Equally, while Covid has hit many very hard, there are also those who have been able to save significantly and now have more ability to make decisions about their lifestyles than they did pre-pandemic.”

shutterstock_1985721395

“While Covid has hit many very hard, there are those who have been able to save significantly and now have more ability to make decisions about their lifestyles”
Don Williams, KPMG

Can retail avoid the churn?

So what can retail do to avoid or mitigate the impact of ‘The Great Resignation’? Are solutions like flexible working or improved pay and benefits the answer, and how can retailers attract and retain top talent in the post-Covid world?

Many retailers and hospitality companies are raising wages and bringing in hiring bonuses, only to still struggle to fill positions.

Reports of reduced opening hours, poorer service, harried employees and closures are common, with some businesses pleading for patience from customers given the circumstances. 

“There are multiple reasons why people may want to leave their job, and our research highlighted a lack of appreciation for the work they do (29%), a lack of career progression (29%) and poor management (25%),” says Personio’s chief people officer Ross Seychell.

“We may well see more churn now the economy is strengthening – especially in the retail sector.”

“There are multiple reasons why people may want to leave their job, and our research highlighted a lack of appreciation for the work they do (29%), a lack of career progression (29%) and poor management (25%)”

Ross Seychell, Personio

Founder of employee engagement business WorkL and former Waitrose boss Lord Mark Price explains there are four key factors driving employee satisfaction and which determine whether a worker is likely to leave a job in the coming year – I am fairly paid; I have a good relationship with my manager; I enjoy my job; I am being developed.

“The concern is that while for industries generally 12% of the staff are in this situation of actively looking to leave, for retail that figure is 17%,” says Lord Price. 

“Different groups tend to have different priorities. For younger workers it’s often about career development, for those mid-career it may be about retraining opportunities and for many, and especially female workers, flexibility is key.

“Ethnicity, disability and LGBTQ+ can also all make a difference to priorities, and yet we are ruled by the tyranny of averages. In fact, your employees have a very diverse set of needs.”

KPMG’s Williams agrees and says that while flexibility in terms of work location is more difficult for retail than many other sectors – stores and logistics typically require in-person functions – employers will need to think about how they can adjust roles and rotas to work with people’s lives.

“Extended hours and rapid delivery have provided more flexibility for customers but have placed more onus on staff,” says Williams.

“So flexibility in retail is very individual, it might be about more flexible hours, location, the opportunity to do different things. At the same time, remote working does open up geographical opportunities for retailers – it’s now viable for, say, a new data analyst to live several hundred miles away, or even in a different country.”

shutterstock_1937176351

“Remote working does open up geographical opportunities for retailers – it’s now viable for a new data analyst to live several hundred miles away, or even in a different country”
Don Williams, KPMG

Flexibility and support

Many retailers have launched new employee initiatives to bolster their employment numbers, while also improving staff retention.

At the start of the pandemic health and beauty retailer Superdrug introduced a £40m employee support package to relieve financial stress for employees, as well as introducing a dedicated People Advice team to answer questions and concerns for its 16,000 staff.

Superdrug customer and people director Jo Mackie says communication around mental health “has been key” with “managers encouraged to check in with their teams weekly to personally hear how things are going”.

More recently Superdrug has launched its first CSR report, which highlights people as a key pillar, and it will focus on supporting colleagues’ financial, mental, physical and social wellbeing.

Ocado has told staff who are able to work from home that they are now allowed to work abroad for one month of the year – something chief people officer Claire Ainscough says was a frequent “top question” from staff during the etailer’s virtual town halls over the past year.

Superdrug Leicester

At the start of the pandemic, Superdrug introduced a £40m support package for employees and set up a People’s Advice team to address any concerns staff might have

Pets at Home has also boosted activity around wellbeing and mental health since the pandemic. Creative development and innovation director Claire Gavin previously told Retail Week this has included introducing weekly wellbeing newsletters, creating and issuing guidance documents on mental health and launching a wellbeing pulse survey to measure staff concerns. 

Gavin says the business has focused on increasing awareness of its colleague hardship fund, adding: “Materially the fund has been Pets at Home’s single most successful mental health initiative.”

Initiatives have also been directed towards bringing in new talent. In July, online electricals firm AO sponsored the seventh cohort of Manchester-based Tech Returners’ Return to Tech scheme, which offers a free route back into businesses for those who have taken a break from the industry. Four people were successful in applying for a mid-level role at AO following the eight-week programme.

Carl Phillips, director of group IT at AO.com, says: “We were really impressed with everyone on the programme and we’re really pleased to partner with Tech Returners to remove the barriers returners often face in the industry – and get some fantastic talent on board.”

John Lewis Partnership also recently announced the introduction of six months of equal parenthood paid leave for any staff member, in what is a UK retail first, also offering any staff member two weeks’ paid leave if they experience the loss of a pregnancy.

John Lewis Kingston reopening June 2020

John Lewis recently introduced six months of equal parenthood paid leave for any staff member, in a UK retail first

Retail employment outlook

“This is unlikely to be a one-off moment. This ‘Great Resignation’ will most probably be a drawn-out process of labour market change,” says Seychell.

“While we can’t predict exactly where the job market is heading, our research found that 42% of employees in the wholesale, retail and franchising sectors are looking to change roles within the next year. Churn is a very costly process.”

Seychell believes that if employers fail to fully understand what is pushing people to leave, then they will ultimately be ill-equipped to retain staff.

He adds: “Employers can gather feedback through engagement surveys, reviewing data sources like Glassdoor to understand employee experiences. And when it comes to taking action to develop and support employees, businesses should be offering core ‘people products’ like leadership training, learning and development and wellbeing services.”

“Our research found that 42% of employees in the wholesale, retail and franchising sectors are looking to change roles within the next year”

Ross Seychell, Personio

Williams points out that remote working has made such initiatives more difficult, but says that retailers can now bring employees together, although he feels head office gatherings will need more purpose.

“It’s likely that the new mix will involve some remote and some office work, so when teams do come in – whether vertical or horizontal – there needs to be a reason. Work will need to be more thoughtful, so that when teams come together there is a point to them being there,” he says.

Lord Price adds that the current retail story should not be doom and gloom, but rather that the industry needs to promote what it does provide workers, especially the opportunity to progress.

“What retail can offer is a career that enables progression regardless of academic achievement and teaches people to be traders, sellers, and provides them with people skills,” he says.

“In retail, you are as good as your numbers and that means that everyone has the opportunity to get on and to be promoted.”