Margaret Lindquist | Content Strategist | July 11, 2023
Amid steep competition and narrow profit margins, grocery stores and supermarkets are constantly looking for ways to improve staff productivity and control costs—particularly challenging in an industry with high turnover rates that relies on mostly hourly workers. A recent study by food industry advocacy group FMI, The Food Industry Association found that 80% of grocery retailers say it’s difficult to hire and retain people, 77% have had to increase wages for part-time workers, and 85% have had to increase them for full-time employees.
Grocery staffers on the store floor are the face of the brand, more so than in most other industries. As shoppers walk in the door, choose products, and check out, those staffers need to be primed to seize opportunities to introduce customers to new products and strengthen the grocer’s relationship with them. That makes it all the more important for grocery retailers to attract and retain the right talent—easier said than done in today’s tight job market.
As grocery retailers scramble to find and keep workers, they must move beyond just paying them more if they want to win the talent war.
The main role of the grocery industry HR pro is to hire people and ensure that employees both experienced and new are trained and engaged so that they stay. In the past, once employees were past the onboarding stage, they typically had little to do with HR.
Now, industry HR managers help create better experiences for employees. That includes providing apps they can use to manage their shifts and check their benefits, establishing storewide employee recognition programs, promoting employee safety guidelines (and making sure managers are regularly trained on those guidelines), and conducting regional studies to ensure that workers’ salaries are competitive. HR managers also act as a pipeline to upper management on compensation, scheduling, wellness, and more. They not only communicate employee wants and needs to company executives; they also make sure that senior leaders aren’t blindsided by union activities and higher-than-usual turnover. HR managers also work with company executives to develop the next generation of leaders.
Grocery industry HR managers typically have all the responsibilities of their peers in other industries, plus ones that are specific to an industry that often provides first jobs for young people. Especially when unemployment rates are low, grocery retailer HR teams need to make sure that they’re making it easy for people to apply for jobs and that the physical environment and the staff at each store or warehouse come together to present the place as an appealing place to work.
For midlevel and upper-level job candidates, industry HR managers work with senior management to create competitive compensation and incentive packages, and they work with IT to ensure that employees have the tech tools they need to be productive. Perhaps most important, they’re responsible for fostering a positive work culture, one in which employees collaborate, feel comfortable sharing their concerns with management, and feel appreciated for their work—an environment conducive to reducing employee turnover and providing first-rate customer service.
In an industry in which hiring and retaining employees can be extremely difficult, grocery store and supermarket HR teams play a crucial role. They must deal with steadily rising labor costs, turnover rates that can exceed 75% a year for hourly positions, and a workforce that ranges from high school students at their first job to senior executives responsible for hundreds of stores.
In every industry, HR plays an important role in recruiting, training, and developing employees, but that’s especially important in the grocery business, given the number of young, inexperienced employees and the fierce competition for people, both within the industry and from other industries. Grocery store HR teams also face unique challenges related to worker safety. Store workers face dangers that include slip-and-fall injuries and kitchen burns and cuts, while warehouse workers have the highest levels of nonfatal injuries and illnesses of any industry, according to the U.S. Bureau of Labor Statistics.
Grocery industry HR teams are also responsible for balancing staffing needs to accommodate peak and off-peak times. As the responsibilities of grocery workers have expanded with the growth of online shopping and curbside fulfillment, they’ve taken on the role of brand ambassador in many cases. HR helps set the tone for each store’s customer experience by cultivating a workforce of service-oriented, well-trained, and engaged people.
With so many job openings in the retail, hospitality, and food and beverage sectors, and with each sector competing against one another for workers, it’s crucial that grocery stores and supermarkets stand out when appealing to entry-level and midlevel employees. In the grocery sector, the turnover rate for hourly in-store positions is 76%, according to a 2022 survey by organizational consulting firm Korn Ferry. For starters, HR managers need to make sure it’s easy for candidates to apply for a job, online or in person. Job postings on third-party sites must “sell” the store brand to break through the clutter of dozens of other retail postings. HR needs to provide precise job descriptions so candidates understand what’s required and interviewers can answer applicants’ specific questions. Store hiring managers must be flexible about job requirements and the types of workers they consider, as well as evaluate the demeanor of each candidate. As an old saying in the retail industry goes, it’s easier to hire nice people and teach them to sell than it is to hire salespeople and teach them to be nice.
Friendly, helpful, knowledgeable employees can make a world of difference in customer service. In fact, a study by Bain & Co. found that companies excelling in this area grew their revenues 4% to 8% above their market peers. Creating a welcoming atmosphere to compete with rival stores and gain the loyalty of local customers starts with thoughtful hiring and training of the following types of employees:
In a highly competitive job market, the benefits that grocery retailers provide to their employees can make the difference between a fully staffed store and one that’s struggling to stay open. An important role for grocery store HR teams is determining which kinds of benefits they can offer to differentiate themselves as employers and land the best available workers. In addition to providing benefits, such as health insurance and store discounts, many retailers offer their employees perks, such as free meals and community college subsidies.
Giving workers the ability to schedule their hours around their outside commitments can help grocers attract employees and build loyalty. Digital scheduling systems that make it easy for employees to sign up for shifts and trade them make workers feel valued and engaged, according to a survey by job site Indeed. In fact, 77% of onsite workers who were given the option of flex scheduling took advantage of it, the survey found. HR managers need to help determine which times during the day/week/year their grocery stores are the most and least busy so they can make sure that the right number of employees are available. To do this, HR needs to track customer traffic data over time, determine patterns, and hire and create schedules around those patterns.
Grocery store HR teams need to monitor and ensure compliance with a vast array of federal, state, and local laws. Some of the more common regulations include the Fair Labor Standards Act, which establishes minimum wages and overtime pay; the Equal Pay Act, which makes it illegal to pay men and women different wages for the same job; and the Americans with Disabilities Act, which prohibits discrimination based on disability. The Occupational Safety and Health Act, which sets standards for safe workplace conditions, has guidelines specific to grocery stores and supermarkets that focus on ergonomics and machine safety. The Fair Labor Standards Act limits the types of jobs people under age 18 can do and how many hours they can work.
Grocery store HR teams are responsible for training employees at all levels, including warehouse workers, store employees, and senior executives. Because of the high turnover for many grocery store roles, training for new employees may seem like the highest priority, but HR shouldn’t neglect training current employees, who may need refreshers on crucial issues or want training to advance their careers. Continual, role-appropriate training can help employees fulfill their job responsibilities more effectively and position them for advancement.
In general, training for grocery store managers and executives should include soft skills, such as communicating, team building, and building interpersonal relationships. For lower-level employees, HR should create training plans that outline what employees should know at different stages of their work life—at one week, a month, six months, and so on. Providing new employees with a peer mentor can help get them on track and keep them there. HR managers should identify staff members who are particularly good at their job and give those people staff-training and -oversight responsibilities. It’s a great way to assess an employee’s management potential. Training in the following practices is particularly key:
In a 2021 survey by training company Axonify and Arlington Research, nearly half of the frontline-worker respondents said they were planning to quit their jobs soon, with 56% of grocery workers citing burnout as their top reason, followed by insufficient compensation, at 50%. There’s no question that retaining employees, especially entry-level cashiers and stockers, can be challenging.
Savvy grocery store HR teams are taking a variety of steps to retain key people, including providing free meals, childcare stipends, and help with transportation costs. HR teams might also work with a store manager experiencing high turnover rates to uncover the warning signs before employees leave. Or an HR team member might shadow a store manager with a good retention track record to understand what that manager is doing right. Equally important, HR managers need to continue to support employees past the onboarding stage to ensure they’re keeping up to date on their training. Once employees put in their resignation notice, HR needs to conduct an exit interview to understand why they’re leaving and where they’re going.
Here are eight other strategies that HR managers can use to improve retention at their stores.
Grocery workers need ongoing feedback on their job performance, both during their workday and as part of a structured review cycle. Meantime, managers need to take time to listen to their employees’ feedback and support their career development goals. HCM systems can help management keep track of employees’ performance reviews, goals, and the progress they’re making. HR needs to partner with store managers, who may not have the leadership skills required to develop strong relationships with team members. Even good managers need feedback and some level of mentorship and training to improve, as well as their own charted career path. To engage and retain employees, managers must create a problem-solving atmosphere, get to know their employees as people, and promote open communication and trust.
Rapid turnover and a never-ending hiring cycle can make it difficult for grocery HR managers to step back and focus on the big picture—actions that improve the customer experience and store culture. Here are 10 best practices that HR managers need to prioritize.
Make sure new employees have everything they need to start on the right foot, such as a name tag, uniform shirts, a tour of the premises, and introductions to the team. If possible, provide lunch for the first-day employee and a seasoned coworker. If selecting benefits is part of a new hire’s first day, make sure someone is present who can answer questions. Most important, keep your door open and stay particularly accessible for the first few days in case any issues or questions arise. According to Harvard Business Review, companies that implement a formal onboarding program can expect to see 50% greater retention of new employees
Creating comprehensive, clear job descriptions is crucial to the recruitment phase, when candidates, who are likely looking at several different job opportunities, need to determine whether they’re interested in the positions you have available. At the same time, don’t make the description so detailed that you scare off candidates who might imagine themselves having to do all those tasks all the time. The job description is also an opportunity for grocers to showcase their store’s culture and values. If you prioritize customer service, make sure you list that first—for example, by writing “Give every customer immediate attention.” Larger stores have different departments, and the job description for a meat cutter will be different from the one for a bagger. Floor managers know best what each job entails, so tapping their expertise will help keep job descriptions realistic. HR should make a point of reviewing and updating descriptions periodically.
Well-designed performance management plans help motivate employees, cultivate talent, and establish goals and accountability. Grocery workers need ongoing feedback on their job performance, both during their workday and as part of a structured review cycle, and managers need to take time to listen to feedback and support career development goals. Performance management programs need to be transparent and consistent so that workers feel they’re being evaluated based on the same criteria as their peers. Cornell University’s School of Industrial and Labor Relations recommends that HR teams set up group “calibration” meetings for managers of hourly employees so they can come to a consensus on low-, medium-, and high-performance characteristics. Include 360-degree feedback loops that involve managers, peers, direct reports, and even customers. Make sure employees can visualize a career path within the store or larger organization.
Knowledge is power when developing a compensation structure—knowledge about how competitors compensate their employees and which people within your organization would be most difficult to replace. There are two main salary structure types. With traditional structures, pay levels are divided into different grades based on specific criteria, such as length of tenure or performance levels. With market-based structures, salaries are based on current market rates for comparable positions in the area. The type of compensation structure that grocery retailers set up can make a huge impact on their ability to hire and retain workers. In the 2021 survey by Axonify and Arlington Research, 56% of grocery workers said they planned to leave their jobs soon, and half of those people cited poor compensation as the main reason.
Grocers are responding by raising salaries, in some cases significantly. One German grocery chain announced it was increasing staff salaries by 7.5% starting in early 2023. Another grocer in the UK recently announced a 10% increase for more than 100,000 employees. You can bolster your retention rates by adding in the benefits of a good employee culture, such as growth opportunities and flexible schedules, but ultimately for most hourly employees the pay level will be the deciding factor in taking a job or staying in it.
It’s important that grocery retailers provide all employees with training that not only improves their performance and complies with industry regulations, but also helps them advance in their careers. That training runs the gamut, from soft skills such as how to respond to customer queries and how to communicate with managers, to technical skills such as how to operate a cash register and enter items into an inventory control system. One US grocery chain has developed an educational program that teaches associates skills such as product merchandising and how to read a profit-and-loss statement. Another grocery chain has developed a management training program that includes classroom sessions and hands-on experience shadowing store managers. HR teams are also developing training programs for senior managers to improve communication, organization, and feedback skills. Across industries more than half of US workers who quit their jobs in 2021 cited lack of advancement opportunities as a top reason, according to the Pew Research Center. Grocery HR teams need to pay special attention to making training opportunities available to their deskless workers, who may not have ready access to such information on the company intranet.
According to data compiled by Glassdoor, 67% of job seekers consider workplace diversity an important factor during their search, and more than 50% of those currently employed want their workplaces to do more to increase diversity. Given that context, it’s important for grocery retail HR teams to cultivate a diverse workforce, one that reflects the demographic makeup of the local community, and not just in entry-level positions such as cashiers, stockers, and food service personnel. HR teams need to mine data in their applicant tracking software to identify job candidates from underrepresented ethnic and other groups. Some ways to accomplish this goal include reaching out to historically Black colleges and universities, using recruiting agencies that specialize in diverse candidates, and making sure there is diversity among the recruiting staff within the organization’s HR team. For entry-level positions, internal programs that reward employees for recommending qualified candidates can improve diversity rates. Grocery retailers also need to create advancement opportunities to promote diversity at the senior management level, especially considering a 2021 finding by Deloitte that 58% of food industry retailers have leadership configurations that don’t represent the local population.
Employee recognition can be recurring or ad hoc and include bonuses and other perks or not, but the important thing is that it be part of a conscious effort with specific goals and budgets. By recognizing and rewarding employees’ dedication to the business and customers, grocery retailers motivate those employees to perform at a high level and give them a sense of fulfillment that encourages them to stay long term. Such programs can include public, formal recognition as well as more regular informal recognition from managers. HR teams need to make sure that employee recognition is perceived as fair and equitable by all employees.
Grocery store managers have the biggest impact on team building, but HR managers can help foster it across the organization. First, make sure managers have the soft skills—mainly interpersonal communications, prioritization, and problem solving—to oversee their group of people. Not every manager has these skills at the start, but they can be taught. Store managers have responsibilities that keep them off the floor, including scheduling, hiring, and planning, but it’s crucial that they take the time to “walk the floor” and connect with workers. HR managers can support a team-oriented culture by creating programs that get employees to work together to find a solution to a specific scenario they’re likely to encounter or to build displays that highlight a product’s features.
Grocery store HR leaders can work with store managers to use online pulse surveys, town hall meetings, and one-on-one conversations to communicate company initiatives and job opportunities, as well as get feedback on employee challenges and concerns. Such two-way communication helps employees gain a clearer sense of how they fit into the store’s and organization’s big picture. Share customer stories. Explain to employees that they’re not just stocking and selling products; they’re helping parents feed their children or creating a meaningful moment when a teenager buys flowers for Mother’s Day. How your business helps people is the story that grocery retailers need to tell their employees.
Every grocery store has point-of-sale systems and most have inventory management software, but more grocery retailers are embracing HCM systems that provide employees with online portals to manage their shifts, learn about training opportunities and open positions, check their benefits and pay slips, reinforce workplace safety guidelines, and even learn new skills. Such applications also help managers recruit, onboard, and evaluate the performance of their people, giving executives the data they need to make strategic decisions. For example, HR might have data showing an increase in employee turnover and an associated increase in hiring costs, spurring management to reallocate money to higher wages and salaries to stem turnover.
Grocery stores face all the HR challenges of other industries, including reducing high employee turnover, finding qualified replacements for those who leave, offering competitive salaries and wages, and cultivating a positive work culture—all in service of creating great customer experiences and building a profitable business. Here are seven of the biggest challenges that grocery store HR teams face now.
The employee turnover rate is one metric that organizations use to measure their overall health. Generally included in that metric are involuntary departures (layoffs and firings) and voluntary turnover (resignations), factoring in the overall cost to replace a given type of employee. In 2021 grocery stores had a turnover rate of 48% for full-time employees and 67% for part-time employees, according to trade group FMI, with cumulative turnover rates that exceed 100%, partly due to the prevalence of part-time and seasonal workers. (This happens when grocery stores need to fill the same jobs over and over. Each employee who leaves is part of the organization’s overall turnover rate.) In a survey of frontline workers, including grocery employees, conducted in 2021 by training company Axonify and Arlington Research, nearly half of the respondents said they were planning to quit soon.
In an industry where profit margins are very slim—they averaged 2.9% over the past three years—the ability to pay people what they want or think they deserve is a big pain point. Although HR doesn’t control the compensation budget, it can demonstrate to the organization the connection between salaries, success in recruiting, and retention—using both industry research and examples specific to the store. HR teams can also point out the value of ensuring pay equity, both to show a commitment to diversity initiatives and to avoid fines for unfair labor practices. In addition, HR can take the lead in benchmarking the company’s compensation levels against those of competitors, using third-party data.
Grocery stores face many risks related to food safety and quality, customer and worker safety, shoplifting and robbery, and other factors. HR focuses on the employee-related ones. Stockers, store managers, and other grocery workers need to be able to lift heavy boxes, sometimes to high shelves, and they tend to move around more than employees in other lines of work, increasing their risk of injury. Stores can lose key employees for extended periods due to injury, while having to foot the considerable cost of workers’ compensation. Workers need training on proper lifting techniques, how to handle cleaning chemicals, and how to climb ladders safely.
Grocery stores don’t have the same peaks and valleys during the year as other types of retailers, but they still need extra help around the holidays and during the summer months to cover for full-time staffers on vacation. For grocery store HR teams, it’s a challenge to recruit, engage, and get the best performance from employees who will be around for only two to three months.
Grocery store jobs, especially cashiers, baggers, and stockers, are frequently an employee’s first job, with few or no requirements up front. As a result, grocery store HR teams need to expand conventional onboarding training to include basic work behaviors, such as showing up on time, what to wear, and how to greet a customer. HR managers shouldn’t just tell employees what to do—they need to provide clear, real-life examples, including in formats such as video and infographics, so that new employees understand what it takes to do the job well.
Employee theft accounts for at least 30% of the $50 billion in cash and goods stolen from US retailers each year, according to the National Retail Federation. The most common type of employee theft is “sweethearting,” whereby employees give away or discount merchandise to family or friends. Techniques include avoiding scans of certain merchandise, overriding the actual price of an item, processing fake refunds to gift cards that the employee can keep or sell, and processing bogus voids or discounts to conceal missing cash. Time theft—when employees goof off at work or enter false information on their timecard—is also costly for grocers.
Related to the risk management issues covered above are grocery store safety concerns, ranging from minor repetitive strain injuries to serious slip-and-fall injuries. With the increase in organized retail crime, grocery stores are also beginning to plan and develop training around violent crime. In a 2022 survey of 18 food retailers representing more than 12,000 stores, grocery trade group FMI found that 72% of those organizations have programs or plans to prevent workplace violence, while 88% say they’re ready to deal with robberies.
Grocery store HR teams have their work cut out for them, having to hire, train, and help retain employees who in many cases are early in their work life. Oracle Fusion Cloud Human Capital Management (HCM) is a comprehensive, integrated suite of applications to help HR managers automate the recruiting process, reduce the complexity and cost of payroll tasks, provide new employees with personalized onboarding and to-do lists, create an “opportunity marketplace” that employees can use to try other jobs within the store, and handle complex union and legislative regulations. The cloud application suite also lets employees schedule shifts, check their benefits, pursue training opportunities, give managers feedback, and perform other tasks. And because it’s in the cloud, Oracle Cloud HCM connects every employee and every HR process across multiple stores, all using the same interface.
For even better results, grocery stores and supermarkets that implement Oracle Fusion Cloud ERP along with Oracle Cloud HCM can combine HR and finance into a single, unified system. By connecting HR and finance, store leaders gain insights into how workforce fluctuations affect budgets, forecasts, and resource allocation. And when those core HR and finance systems connect to a store’s merchandising, inventory management, planning, and customer engagement products, leaders can gain a holistic view of store operations and shopper behaviors.
What is the goal of HR in the retail industry?
Grocery store HR teams are responsible mainly for hiring, training, and working to retain employees, with the goal of providing the best customer experience possible while maximizing sales and profits.
What is the salary of an HR position in the retail industry?
The average salary for an HR manager in retail is $96,830, according to 2021 data from the U.S. Bureau of Labor Statistics.
What is HR in the food industry?
Beyond the hiring, benefits management, and termination processes that all HR teams oversee, those in the food industry must deal with evolving government regulations and certification requirements, workforce safety concerns, and especially strong competition for workers with other service companies, such as other kinds of retailers, hotels, and restaurants.