Navigating the new world at work
US retail employees’ most pressing needs, and how your organization can meet them, based on Mercer’s 2023-2024 Inside Employees’ Minds study.
The Retail workforce has seen some positive activities from their employers this year.
Despite, geopolitical issues and economic issues, retail employees are able to find work life balance, be compensated more fairly and do not have as much of a desire to leave the industry. Let’s open the box of goods and understand how retail employers have shifted the sentiment.
For retail employers, your efforts from listening to employees are starting to pay off. Relative to last year, employees have a greater sense of balance, belonging and satisfaction with compensation, benefits and career opportunities.
With inflation cooling, employees and employers are working together to find ways to help employees through these difficult times with financial planning, offering daily pay options, and offering flexible benefits to reduce the spend. While labor shortages have eased, this coupled with the use of automation is making workloads more manageable. Further, employers have listened to employees and made significant investments in Total rewards — with the largest compensation increases since the 2008 financial crisis.
What keeps retail workers up at night?
But concerns remain for retail employees — efforts by employers in 2023 have not resolved the concerns for these employees around financial wellbeing. Covering monthly expenses and planning for the future, concerns continue to remain elevated — now claiming the top 3 concerns — even as rates of pay have increased above minimum wage rates in many locales.
Financial stressors remain high
Despite increases in wages and more flexibility in benefit offerings, financial stress has not improved for retail employees.
As more than half of employees report reducing their discretionary spending, and another 46% report they have reduced savings or tapped into their current savings, the rise in personal debt suggests employees are struggling to make ends meet.
Employees are spending and saving less as inflation continues to take a toll.
Another area of financial concern for employees is healthcare: only retail employees with an income of $60,000 or greater per year are more likely to be able to afford health insurance. Those employees with an income below $60,000 are not able to afford health insurance. Thus, despite employers offering health insurance to all retail employees (front-line office, and part-time), the benefit is often not selected by employees as they must make choices to pay rent or have health insurance coverage. In addition, not selecting health insurance may leave employees seeking emergency care under state funded programs or seeking workers’ compensation benefits. If they select to have health insurance coverage, often they are looking at high deductible plans that impacts the insurance deduction in the employee’s thinning paycheck.
Beyond financial concerns, retail employees continue to express concerns over their mental wellbeing.
What can move the dial on well-being for your retail employees?
When you reflect on the last few years of a retail employee, they continued to work through the pandemic as an essential employee without little adjustment to their work schedule. Not surprising, work load and life balance continues to be a high priority for retail workers, claiming the #4 spot as they were not afforded the option of remote or hybrid work. In addition, with geopolitical issues, supply chain issues, and inflation, these challenges have fueled the strain and stress this workforce faces on a personal level as well as what they face with interactions with consumers.
When you ask employees what type of support would most benefit their mental health and prevent burnout at work, they point to changes in work practices: More flexibility — both at work and from work, reduced workloads, better resources, and more supportive management. While it’s clearly important to help employees manage mental health issues and burnout when they arise, survey results suggest that changing work practices may provide a supportive environment and reduce mental stress.
Work is still chaotic, overwhelming, exhausting and frustrating for retail employees.
The work experience continues to lag in the retail segment — on a typical day at work, half report feeling exhausted, nearly 40% report feeling chaotic, overwhelmed and frustrated, and approximately 1 in 3 feel they aren’t appreciated or valued.
Flexibility — both at work and from work — remains an area of opportunity for retail workers
While remote work and hybrid work are typically seen in corporate roles, for an hourly retail worker, they want to participate in work flexibility. Many are seeking the option to choose the shifts they work or rearrange their hours for a compressed work week — or simply be able to take time off when needed for doctor’s appointments, children events, or other everyday life events.
Despite retailers understanding the need for flexibility, there remain challenges of providing goods and services to consumers on a 24 hour, 7 day a week demand. For the hourly retail worker, work flexibility takes on a new look to have fluidity to meet the needs of the workers and the needs of the consumer. For those employers that can remain flexible, our survey results show it can be a source of competitive differentiation: employees who say they have time-based flexibility report significantly higher levels of commitment. Those who can adjust when they start and stop work during the day, and can easily trade shifts if something comes up, are twice as committed to their employers.
Retail employees say paid time off is a key reason they stay with their organization – but many feel time off is inadequate
Along with work flexibility, employees want to rebalance their work and personal lives and recharge their mental wellbeing; and they see paid time off as a critical way to do that. As with flexibility, hourly employees have seen fewer gains in this area. Over the last few years, we have seen major brands offer the day off for Thanksgiving to spend time with family, but there are many other holidays that consumers still want to buy goods or services. Traditionally, hourly employees have less paid time off than salaried employees, and they are less likely to feel that their time off is adequate — though it’s in the top three reasons they will choose to stay with their organization.
Pay transparency has paid off – but opportunities with careers and skills remain
In 2023, pay transparency went mainstream, with legislation coming into effect in large markets such as California and New York — major markets for retail employees. And certainly employees are taking advantage of this information, with nearly 60% of employees saying they’ve researched pay ranges through their employer’s job postings, and rising to nearly 70% for those under age 45.
For the majority of Gen Z employees, 57%, say they share their compensation information with colleagues — compared to 1 out of 4 over the age 55. And nearly half of employees, 46%, say they are unlikely to apply if compensation information is not available in the job posting. Thus the benefits of pay transparency are becoming increasingly clear, as employees who have access to their pay range report significantly higher levels of engagement and commitment.
Employees who are paid fairly are...
More than 2x likely to say:
My manager/employer provides me with the pay range for my job.
But where there are some cracks emerging relate to broader transparency around skills and careers — and how that connects to pay. While overall 61% of retail employees say their career goals can be met at their company, career confidence declines to 56% for front-line store employees. Employee confidence in the ability to meet their career goals is critical — as those who report feeling confident about their career goals being met are twice as committed as those who aren’t.
Take action to become an employer of choice
Retail employers have an opportunity to build on the successes they have achieved with a more engaged, satisfied and committed workforce by developing more specific strategies to address employees’ unmet financial needs, enhancing the work experience to improve well-being, embracing more flexibility, as well as continuing the journey of being transparent around pay, skills and careers. Learn more about actions you can take to support employees in the retail sector.
Contact your Mercer consultant
Whether you need support understanding the needs and experiences of your own employees, or taking action to improve the health, wealth and careers of your workforce, Mercer has an expert who can help.