HR Functions in Retail: Hiring, Retention, and Engagement

The Changing Role of HR in Retail

The human resource manager's function has changed considerably over the years. Once, HR was called the "personnel department," and its primary role was issuing paychecks and managing employee issues such as pensions, bonuses, and vacation time from a purely administrative perspective. Today, HR has many additional, important tasks, including deciding which employees to hire based on alignment with the company's values, nurturing top talent, and resolving interpersonal conflicts between employees. "The role of the HR manager, director, or executive must parallel the needs of his or her changing organization. Successful organizations are becoming more adaptive, resilient, quick to change direction, and customer-centered. Within this environment, the HR professional, who is considered necessary by managers and executives, is a strategic partner, an employee sponsor or advocate, and a change mentor" (Heathfield, 2012).

HR has an active role in setting the priorities of the organization, and the people the organization chooses to employ are seen as directly linked to the quality of output. This is particularly true of retail-based industries. America is no longer primarily a manufacturing nation: providing service has become the core function of many industries, given that customer service cannot be outsourced or transferred online.

Challenges of Hiring and Retaining Lower-Level Staff

One of the greatest challenges of a retail store is the hiring and retention of lower-level staff — the employees who actually meet and greet customers, inform them about products, and try to understand their needs. These workers are the customer's first point of contact with the business, yet the hiring process is often very perfunctory. These jobs frequently pay minimum wage, and after a quick background check and a submitted paper résumé, someone may be hired. This approach, which takes little consideration of employee interests, personal attributes, or how well they align with the company's culture, can be disastrous.

Worse yet, after an expensive training period, floor workers often leave quickly, given the perceived similarity between one low-wage job and another. Even in a difficult job market, no company can simply assume that workers should be grateful for a job. High turnover imposes significant costs on retailers and undermines the consistency of the customer experience.

Participatory Management and Employee Engagement

To cope with the problem of high turnover rates, the innovative electronics company Best Buy created a social networking site called "Blue Shirt Nation," which enabled retail workers to openly share concerns with management and offer suggestions for improvement on an in-house social networking page (Grayson, 2008). HR staff was instrumental in using technology to help employees connect with one another on a personal level, while also providing the company with useful suggestions about altering aspects of Best Buy policy that might be ineffective. Best Buy competes with many exclusively online-based stores, and offering additional value through its service component is one way to justify shopping in person.

Using a general Web 2.0 application on which all employees can post creates a sense of personal connection between the business and the individual worker. "When the company started an initiative to boost enrollment in its 401(k) plan, it sponsored a video contest, encouraging people to create clips on what retirement plans meant to them. The effort garnered so much interest and so many entries from employees that Best Buy credits it with helping increase program enrollment by 30%. The winners in the contest received a small budget to redecorate their store and a chance to present their video at Best Buy's headquarters" (Grayson, 2008). As a result of fostering this type of interactive environment, employee turnover is only 8% among those who use "Blue Shirt Nation."

A participatory management strategy is thus a critical component of creating a united firm at every level of the organizational hierarchy. By getting everyone on board, expenses related to retraining are reduced and managers can be more confident that customers will receive a cohesive experience from the moment they walk through the door. A participatory strategy is a positive approach, in contrast to a coercive strategy that requires employees to say scripted phrases and perform in a prescribed manner. When employees feel they have had a hand in setting policy, they are more inclined to be enthusiastic and persuasive in fulfilling their tasks.

The key to retail is service, and participatory strategies — such as recruiting input from workers through social networking sites on the corporate intranet — are important tools that facilitate this process. Social networking can also be used to educate employees about important issues such as diversity training in a non-didactic and engaging manner. Communicating the company's commitment to historically marginalized groups and demonstrating a willingness to promote a diverse range of employees reinforces the image that the company is fostering unity and growth among its staff.

Works Cited

Grayson, Kathryn. (2008). Best Buy employee site a model for big firms. Minnesota-St. Paul Business Journal.

Heathfield, Susan. (2012). The new roles of the human resources professional. Retrieved from