The intensity of the pandemic’s impact on the retail sector has motivated HR professionals to take actions that are both drastic and innovative. Each sub-sector in the retail industry experienced various challenges brought about by changes in product or service demand, whether they are called out as ‘essential’ by governments, the agility of their business model, whether they have developed an online channel to sell through or not.
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Retail industry sectors
Across the sector, the majority of retailers focused primarily on safety, but employee compensation also rapidly became a focus for HR professionals. In organizations that were less negatively impacted by the pandemic, premium pay policies were introduced to keep employees motivated and to show gratitude for adapting to more intense, changed schedules and tasks. In organizations that experienced greater impact, a number of cost containing measures were applied to reduce and delay merit increases, freeze salaries, and reduce salary/variable pay (Figure 1). Overall, the outlook is uncertain for the retail industry.
Pay-related actions taken by retail organizations globally
According to our Actions to Restore Stability Survey, which was fielded in June/July 2020, 53% of respondents believe that salary increase budgets will be smaller in 2021 compared with 2020. We will continually track this trend through our regularly launched Salary Budget Planning Surveys. The trend may remain volatile through early 2021 for the retail sector specifically, with many geographies still struggling with the pandemic and a very different holiday season.
Under normal circumstances, the holiday period is a very hectic period for HR professionals with overtime work being typical for many and the recruitment of seasonal workers to augment staffing. Moreover, retailers recruit in scale taking into account the relatively high turnover in the store operation functions and the need for staff changes throughout the calendar year.
Recruitment focus in the retail sector
Throughout the crisis, the recruitment focus has varied for many organizations in the sector . Retailers have been forced to accelerate the development of digital solutions for secure online transactions and enable purchases to be delivered to customers’ homes, pick-up stations or by the curbside of the store or restaurant. Our Retail Compensation Surveys have found that recruitment to digital functions was relatively high before the pandemic (Figure 2)., and it is expected to increase exponentially as organizations need more talent to fill new digital roles.
In particular, roles supporting e-commerce related activities are in high demand. 84% of retailers confirm that they struggle to attract and retain talent with digital skills according to our Digital Transformation Practices Report. 67% of organizations globally believe that a major obstacle to digital talent attraction is not being recognized as a digital brand. This trend may change positively post-pandemic with the retail sector now heavily investing in digital transformation.
The digital and data analytical mindset has also become increasingly important in other functions, as it is crucial for supporting the new business models. For instance, our Retail Compensation Surveys have found that digital content/visual design, digital marketing, market research intelligence, online community management and website traffic analysis are listed among the highest paid roles in the marketing function (Figure 3).
Hottest marketing jobs in the retail sector across selected markets
Amidst the massive changes happening across the retail sector, having access to relevant market pay data has become even more critical for making informed decisions. Also, to take into account that the playing field will vary and very well go beyond the current one is even more important during these volatile times. The organizations with whom you used to compete for talent in the past may not be the same going forward.
