Oracle HCM Cloud

Arming HR for
the Future of Retail

Using the Cloud to Thrive
in a Changing Industry

3. Making Retail a Career-Oriented Option

With 60 percent employee turnover each year, it’s natural that retail is hesitant to shift from a mindset of burn-and-turn to long-term career development.²⁸ Despite the high cost of employee replacement, well-established retailers are still 24 percent less likely to invest in employee learning.²⁹

Yet the ability to learn and progress is now the primary reason early-career workers choose one prospective employer over another.³⁰ In fact, training and development are three to four times more important than pay.³¹ Retailers should change course to avoid losing more workers to customer service, banking, or pharmacies.

A new spotlight on balance.

While work/life balance and wellness are still in early adoption, Tesco has successfully employed an occupational health team for years. And Wal-Mart’s engagement and training program (that included higher wages) grew revenue, cut turnover, and boosted customer satisfaction.^{32, 33}

"The benefits of an engaged, contented workforce are becoming obvious. The message is simple: Happier employees make happier customers, and that makes good business. Employers no longer regard well-being programs as a luxury. It doesn’t take a genius to realize that an employee’s performance will suffer if they’re unhappy or unhealthy."³⁴—HR Zone

In her book The Good Jobs Strategy, MIT professor Zeynep Ton dives deep into this trend by exploring four retailers—Spanish supermarket Mercadona, Costco, Trader Joe’s, and QuikTrip.³⁵ She illustrates how “bad jobs” are a choice, not a necessity, for companies of all sizes and the measurable benefits of “investment in people—much more investment than normal.”³⁶

Costco continues to exemplify this model by offering full benefits even to part-time employees and doing the unheard-of in retail: shutting down on major holidays so employees can enjoy them too. While labor expenses are 70 percent of its budget, the third-largest retailer enjoys a 5 percent turnover rate and 13 percent revenue growth—which exceeded analyst estimates.^{37, 38}

Perhaps most impressive is that Costco can actually compete with Amazon, namely in the organic grocery realm. Recent JPMorgan data found Costco a “whopping” 58 percent cheaper than Whole Foods on a per-unit basis.³⁹

The backbone of a true talent pipeline.

By implementing a robust cloud HR solution, retailers can support a stronger retention strategy and build an effective talent pipeline for store managers, who can make a six-figure difference in a given location each month, depending on their effectiveness to manage a rapidly changing workforce. Advanced systems should have modules for:

On-demand onboarding for faster orientation of new hires and expedited store openings
Learning and development courses aligned to individuals’ respective advancement goals
Integration with health and wellness programs that reflect the employee's goals outside of work
Ongoing performance management to increase engagement and preempt poor performance
Social tools to foster collaboration, and even crowdsourcing for corporate initiatives
Career pathing and succession management, so future managers will be ready when the company needs them
Programs to systemize employee referrals, which remain the top source of hires for employers⁴⁰