Employee engagement in the retail industry needs a boost.
The engagement index score for retail employees in 2011 was 51 percent, relegating the retail industry to the bottom of the employee engagement list when compared with manufacturing, healthcare, financial services, and government. This low rate reflects the economic realities of the past several years, including industry reports of poor compensation and benefits and a perception that organizations do not care about employees.
Kenexa defines employee engagement as "the extent to which employees are motivated to contribute to organizational success, and are willing to apply discretionary effort to accomplishing tasks important to the achievement of organizational goals." The report shows that such engagement levels are linked to organizational outcomes such as customer service, quality, and performance. In fact, retail employees who are engaged rate their organization's performance approximately twice as high as employees who are not engaged.
Kieran Colville, EMEA head of leadership at Kenexa High Performance Institute, explains that when it comes to training and development, the retail sector presents unique challenges because many workers are employed seasonally. Typically employers focus training and development on cultivating competencies—product basics and selling skills, for example—rather than building leadership capabilities because they don't believe short-term employees are worth the investment.
"Leaders can have a major impact on employee engagement, customer satisfaction, and loyalty, and consequently organizational performance, by investing in leadership and management training, even for short-term staff," Colville says.
Colville adds that training and development focused on behavioral capabilities such as building trust and empathy, teamwork, and problem solving is most effective for increasing employee engagement. Additional drivers of employee engagement in the retail industry are:
- Leadership effectiveness—Leaders spur engagement by inspiring confidence in their employees and being trustworthy, honest, and caring.
- Work-life balance—Organizations should offer practical support such as flexible work schedules, as well as emotional support and understanding.
- Fair compensation—Employers can influence workers' perceptions of pay fairness by explaining how their pay was determined and how they can maximize their compensation.
- Innovative climate—Employees feel challenged and motivated when they can try new things and share their ideas.
As the retail industry continues to change its delivery model from physical to online stores, the types of people retail leaders need to recruit and engage will be quite different in the future, Colville adds.
"How does a retail business engage employees in call centers, delivery vehicles, and so forth? The profiles for leaders in different parts of the retail sector are much different now. The next five years will be an interesting time for retail."