16 January 2024
Five ways HR can positively impact the bottom line in retail and hospitality
In retail, human resources often winds up stuck in an administrative holding pattern.
Here’s why the function can and should be shaping the future of your business, driving performance and profits.
Even if your HR team never interact with a single customer, they can put processes in place that ensure everyone has a great customer experience. This provides a great boost to your bottom line, so it’s well worth considering. HR can also reduce your costs. In our guide, we identify the five ways HR can have a huge impact on your bottom line within retail and hospitality.
Attracting and retaining the right talent
Retail businesses deal with some of the highest churn rates possible, with the average turnover rate standing at 22% a year. While every organisation will lose employees, and retail businesses often have to content with seasonal hiring, such high rates across the sector indicates some deep-rooted issues.
This should be a concern, because while replacing an employee for a lower paying position isn’t as expensive as other roles, it’s still around 16% of the employee’s salary. That can add up quickly, especially when you include training costs.
However, there are other benefits to attracting better talent. Employees that are excited to work for you will deliver the best customer service possible. They may also become brand ambassadors, advocating for your company both as an employer or as someone to shop with.
HR can create a stronger recruitment funnel, to prioritise talent acquisition and also work on employee experience projects to find and keep great talent.
Ensuring goals are aligned across the whole business
For both retail and hospitality organisations, the goals of the business need to be in alignment.
Upper management could implement an incredible transformative strategy, but if that doesn’t filter down to the employees who’ll be actioning it in a clear way, then it’s not a useful strategy.
HR provide a key role in communicating broader business goals across different channels, ensuring everyone is acting in sync. This can be instrumental to employee engagement which has an immediate knock-on effect to customer service.
Providing the right training
Even once HR has put some work into your recruitment process, you can’t reasonably expect a new hire to understand the ins and out of their role. There can be nuances to different people in different parts of the organisation or locations. For example, a hotel receptionist will require different training to a hotel cleaner, and both will require different information if they’re based in a small market town compared to a different team based in a big city.
Training that’s appropriate and relevant for each employee is key to helping them feel empowered. That in turn helps them get better at their job, which can lead to increased sales.
Taking advantage of technology
HR teams rely on data, and with integrated systems they’re able to make use of it a lot more effectively. With tools like employee management systems or other HR solutions, the team can gather up many store insights.
When these systems are properly integrated with each other, HR won’t have to waste time sorting through and organising the data. Instead, they can turn that data into insights and create action plans.
This saves a lot of time and money, while also ensuring each store can be given specific guidance.
Health and wellbeing
Absenteeism costs UK businesses around £2.5 billion a year, and it’s a particularly big problem for retailers. When you’re short staffed, anyone taking an unexpected absence can cause a domino effect, where other employees are stressed out. Stressed employees are five times more likely to take sick days. This can lead to bad customer experiences and a huge dip to employee wellbeing.
HR are your best defence against this. With companywide health and wellbeing initiatives, you’ll be able to help your employees’ mental and physical health. This will reduce absenteeism across the board.
People are the most important part of any business, and as a result HR can have a huge impact on the bottom line for any retailer. By encouraging them to take a more strategic approach and giving them the tools to do so, you’ll move beyond administration into a powerhouse team that drives the business forward.
If you want to learn more about how to support your HR team through this, contact one of our experienced team today.