Human capital management (HCM) is a principle that transforms traditional human resources functions like recruiting, training, compensation and performance management into opportunities to drive engagement, productivity and business value. The foundational concept of HCM is considering the workforce as a core business asset rather than a cost of doing business.
In the past few years, especially, the world of retail has evolved at a rapid pace. Buzzwords like ecommerce, omnichannel, the war for talent, the death of bricks-and-mortar stores, and more have circulated, but the retail employee experience has been somewhat neglected. This issue has been compounded by the COVID-19 pandemic. To remain competitive in the current “war for talent” — which refers to the increasingly competitive landscape for recruiting and retaining top talent — retail companies must invest in the financial and overall wellbeing of their employees.
Most employees cite inadequate career development as the main reason for leaving their jobs.
According to recent research, the average annual turnover rate in the retail and wholesale sector in the United States is more than 60 percent, which is incredibly costly for employers. Most employees cite inadequate career development as the main reason for leaving their jobs, and many in the retail sector report stress about the pay experience, especially due to the lack of transparency.
Employees are also increasingly taking charge and advocating for their safety, especially during the COVID-19 pandemic, and employers are being pressured to respond appropriately.
HCM solutions and strategies
The challenges facing human resources departments in the retail industry are formidable, but there are HCM strategies that can be implemented to alleviate stresses on the business, help attract and retain top talent, improve employee engagement, build a culture of transparency and create long-term value:
- Adopt policies related to labor relations, diversity, equity and inclusion, human rights, workforce health and safety, and more
- Conduct regular employee engagement surveys, and use the results to inform decisions
- Develop and offer meaningful professional development programs
- Provide regular training programs for health and safety, diversity and inclusion, and more
- Establish business/employee resource groups (B/ERGs) to amplify employees’ voices
- Invest in technology solutions for analytics, reporting, communication and more
- Increase transparency and accessibility, especially throughout the pay experience
- Bolster technical capabilities and staff appropriately to prepare for the digital transition
As part of its rulemaking plans from 2021, the U.S. Securities and Exchange Commission (SEC) is expected to introduce regulations in 2022 for mandatory human capital management disclosure for public companies. The disclosure requirements will likely include metrics like employee turnover, compensation, benefits, skills and development training, workforce demographics (like diversity) and more. Retailers would benefit from proactively implementing these measures and gathering this data to prepare for impending regulations.
What retailers are doing
Many of the largest and most well-known retail brands in the United States have the resources, technological capabilities and workforce to develop robust human capital management practices. Smaller retailers can face challenges in terms of staffing and resources, but some of these brands have worked to create employee-focused cultures.
Brooklinen has a hiring, onboarding and employee engagement process that ensures its employees’ values align with the company’s purpose and inclusive culture, and it offers a real-time loop for employee feedback.
At Altar’d State, 95 percent of employees say the company is a great place to work and feel proud of how it contributes to the community. Altar’d State offers unique benefits like 24-hour mental health benefits and student debt repayment programs.
- National Retail Federation: NRF | Diversity
- Forbes: Human Capital Is Every Retailers Most Valuable Asset
- Sustainable Brands: Where Is the New Roadmap for Business and Human Rights Taking Us?
- Business News Daily: 4 Ways to Improve Human Capital Management
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Last Updated: 4/15/2022