Survey reveals hourly workers need more pay, less stress
With the retail sector so heavily represented by hourly workers, four-fifths of its total workforce, any assessment of the overall state of retail employees needs to account for that disparity.
We received responses to the survey from 227 hourly retail workers. The results uncovered job motivators and assessments pointing to issues that the most successful employers will want to address if they are to retain a robust, productive and stable workforce. Those results include:
- Fifty-five percent of the retail employees surveyed across the industry reported that they have suffered burnout on the job in the past year. Mental health and worker shortages were cited by two-thirds of those employees as the top causes of burnout.
- "Unrealistic expectations" was an unusually high stressor (41%) for hourly workers.
- Overall, more retail employees reported their well-being became worse rather than better in the past year. These measures included financial, mental, and physical well-being.
- Forty-four percent of retail workers say that poor performers are not being managed appropriately at their organization.
Stress relief
Burned out by the hour
While stress and burnout are related, they are not the same phenomenon. Burnout is defined as unrelieved chronic stress, and not all stress, such as deadline pressure stress, necessarily leads to burnout, and can be a necessary motivator over short periods of time. But the high importance attached to “unrealistic expectations” as a work stressor in retail should be cause for some concern, as it is cited 12 percentage points more frequently than the overall survey’s respondents.
“Unrealistic expectations are probably tied to worker shortages,” said Greg Kowalewski, Grant Thornton Growth Advisory Services Senior Manager, in that shortages cause workers to take on more duties than the job is designed to allow. While flexible scheduling options are a plus for retail workers, shortages of personnel make that difficult to achieve.
“A retailer must make sure employees have a clear understanding of their roles and responsibilities in order to promote a healthy work-life balance. Otherwise, there is a danger of a business going into a ‘doom loop’ where unmotivated employees quit or are absent often, which places more burdens on employees who are there.”
Relieving the pressure of worker shortages and unrealistic expectations also means “a retailer must make sure employees have a clear understanding of their roles and responsibilities in order to promote a healthy work-life balance,” said Lawrence Griff, Grant Thornton’s National Managing Principal, Retail Industry. “Otherwise, there is a danger of a business going into a ‘doom loop’ where unmotivated employees quit or are absent often, which places more burdens on employees who are there.”
One way to help relieve burnout from worker shortages is with automation, and retailers have already committed to investing in automated systems such as self-checkout stations for that reason. Jared Petravicius, Grant Thornton Growth Advisory Services Senior Manager, said automating processes can increase productivity per worker, and by doing so can even be an avenue to compensate them proportionally, a key factor in retail worker retention, as our survey found. When a worker becomes more productive, theoretically a retailer should be able to pay them more, which could help remedy financial stressors in an inflationary environment.
It’s important to realize that breaking it down into whether burnout is caused by “people shortages” or “mental stress” or “long hours” is not the whole story. More likely these causes are interrelated, so working to solve any of them is likely to have a positive effect on most or all of them.
Ensuring well-being is a priority
“The pandemic tended to break down standards of conduct in service. When customers returned to stores, the varied ways of purchasing items such as curbside service, taking back items bought originally online or online purchases of in-store items — basically the increase in omnichannelling — created additional responsibilities and pressure on retail workers.”
In addition to the financial stressors inherent in an inflationary environment, the decline of well-being among hourly retail workers could also be tied to a recent phenomenon of customers becoming more accustomed to instant gratification, and consequentially having higher expectations of service. “The pandemic tended to break down standards of conduct in service,” Petravicius said, “and when customers returned to stores, the varied ways of purchasing items such as curbside service, taking back items bought originally online or online purchases of in-store items — basically the increase in omnichannelling — created additional responsibilities and pressure on retail workers.”
One underappreciated cause of mental anguish for retail employees is dealing with unruly or demanding customers. “These stresses are often compounded by policies such as on-camera recordings of transactions,” Kowalewski said, as workers could have an understandable loss of mental well-being under those conditions.
“These days, people in retail stores are feeling pressure from the behavior of some customers, and then add to that the perception of not having the support of management or others to push back or disagree without the fear of losing your job, or being filmed and posted on social media, is difficult,” Kowalewski said.
These are sometimes hard issues to solve because they involve, at some level, a degree of the re-setting of post-pandemic customer expectations. Companies who want to support better well-being among their employees could address these issues through retraining, improving the monitoring of interactions and more frequent (and effective) communication with employees. Conducting a workforce study can be a way to discover whether there is a need for particular resources that would help hourly workers’ well-being. There is not a one-size-fits-all solution for companies or situations. The particulars of any company, its desired customer experiences and specific financial limitations, will drive what may be possible.
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“These days, people in retail stores are feeling pressure from the behavior of some customers, and then add to that the perception of not having the support of management or others to push back or disagree without the fear of losing your job, or being filmed and posted on social media, is difficult,”
The importance retail hourly workers place on compensation as a motivator is common to all industries. Compounding that pressure, the Bureau of Labor Statistics found that for the two previous years, inflation rose much faster than wages. So, to attract and retain the workers they want, retailers may need to turn to other strategies.
One way is to make clear the paths to promotions, something only 54% of hourly workers said their organization clarified for them. Griff said a promotional path from a clerk to assistant store manager and beyond should be made clear and include actionable steps on how to achieve it. There are examples in retail — former Costco CEO James Sinegal started as a bagger at Costco’s predecessor, FedMart, and Nike’s new CEO, Elliot Hill, started as a sales representative intern — of retail hourly workers who worked their way from entry level to the top of the corporate ladder in their companies.
“If a company can show that there is a clear path, a progression, an opportunity, it can really motivate the people who want to grow and increase their sense of responsibility with the organization,” Griff said. “It's amazing when you see people at Costco who have tags saying when they started their careers there, and they have tenures of 20 or 30 years. It creates a pretty powerful culture.”
In retail, it also may make sense to de-emphasize the importance of college, emphasizing more of a skills-based assessment of employee skills. Creating leadership programs within stores is another way to promote a culture of achievement that can send a strong message that hard work is valued and that individuals can make positive differences.
“There needs to be opportunity to grow, learn, and take on increasing responsibility. That's how you're going to retain the most ambitious, hard-working employees,” Griff said.
Moving on: Breaking down the ‘whys’
Our survey uncovered that 51% of hourly retail workers have worked at their jobs three or less years. This is in line with retail’s typically high turnover rate. And since “wages not keeping up with inflation” was cited by more than half of respondents as a reason to leave a job, recent inflationary pressures would seem to lead to the conclusion most workers would be looking for a job. But nearly three-quarters aren’t and that would seem to merit an explanation.
Kowalewski said it’s likely that both can be true, that while hourly retail workers may not be actively seeking new positions, if an opportunity arises that pays better, employees are more than willing to take it. Our survey bears this out, as 66% said they agreed that they were not actively looking for a job but would consider moving for a new opportunity.
Retailers who want to retain talent should seek ways to offer benefits other than pay. It can come in the form of team-building opportunities, socializing events, recognition programs and other policies that can promote both flexibility and autonomy.
Managing better
Poor performance management of hourly retail workers seems to be widespread, which is likely another contributor to stress and burnout. Given the relative transience of workers and managers in retail, incentivizing poor performers to do their jobs more effectively should involve more than being strict with employees. Kowalewski said better training techniques can reduce some poor performance errors. But quality training also has to be coupled with more effective communication. Often, that comes down to more frequent and meaningful performance evaluations.
The survey indicated that 52% of hourly workers received performance feedback between one and four times per year, frequency rates that lagged behind those of other surveyed industries. If addressing poor performance is a concern, retailers should consider creating a more robust performance feedback structure if they fall into that one-to-four-times per year range.
Griff said retailers also should consider tying pay more closely with performance evaluations and should not be afraid to monetarily reward good work.
“It's so important that the strong performers see that they’re being dealt with differently than people who are not working as hard or are causing undue burdens upon others,” Griff said. Career progression, additional responsibilities and particular benefits can be used to differentiate between strong and weak performers. Standardizing evaluations and making them more comprehensive is better than just pointing out when someone doesn’t do well in a particular situation.
One can see that the need for better evaluation processes is reflected in some of the written answers to a question asking about how respondents received performance feedback. One respondent said, “Positive feedback daily, but employees who need negative feedback don’t really get it.” Another said, “Usually only negative, when you’re doing something wrong.” While these responses seem to be diametrically opposed, a robust and frequent evaluation process ensures that there is an appropriate place for constructive feedback to occur while doing so at a time other than “when you’re doing something wrong,” which can be humiliating for a worker.
Managing what you control
Ultimately, these potential problems — burnout, degradation of well-being, retaining talent, and managing poor performance — are all components of the entire work ecosystem. A solution to one or two of these issues can have a ripple effect on the others.
While retail management can’t have all the solutions for economic downturns, supply chain disruptions or competitive dynamics, leaders can take steps to help manage what they can control as they strive to create a workforce that is increasingly competent and dedicated to the company. Managers must start by identifying prominent areas of burnout and stress at their workplace, with an eye toward retaining and incenting talented employees with meaningful benefits and actions. A system of frequent, comprehensive evaluations can alleviate many issues.
Contacts:
Lawrence Griff
National Managing Principal, Retail Industry
Grant Thornton Advisors LLC
Partner, Audit Services, Grant Thornton LLP
Lawrence Griff is an Audit Services partner and partner-in-charge of the Stamford, Conn., office. Lawrence has served a diverse client base that included organizations in media and entertainment, retail, food and beverage, and manufacturing industries.
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