Improving employee engagement in the retail sector is vital to keep staff from leaving. Payroll can act as a gateway to more engaged employees by helping to remove financial stress.

Even at the best of times, the importance of ensuring that staff are paid in an accurate and timely way tends to be underestimated. But for retail workers in the middle of a cost-of-living crisis, it can have a direct and significant impact on their engagement levels — and ultimately whether they decide to stay or not.

Such a scenario is important to consider in a sector that already has 148,000 job vacancies, up 14,000 since the pandemic struck, according to BRC trade association figures. A lack of available people on the market, career-switching, and insufficient workers with the right skills are all important considerations here. But so too are high levels of staff turnover.

In fact, the Future of Retail Workforce Study indicated that a substantial 16% of the 1,000 employees questioned had recently quit their job, up from 10% the previous year. A third had left over the last six months and two thirds in the last 90 days. A further 19% of respondents were also considering whether to follow suit, a situation that does not bode well.

Financial stress is a major headache for retail employees

Retail payroll has a key role to play in how employees feel. Our recent financial wellbeing research revealed that two thirds of staff have either been paid late or incorrectly.

As a result, just under half of those surveyed had experienced trouble paying the rent or bills and had been forced to borrow money (46% respectively).

Unsurprisingly, 29% felt the situation made them less motivated and productive, while financial difficulties caused just over a quarter (26%) to experience health issues, including stress and anxiety.

A recent study of retail workers identified three major factors contributing to financial stress:

  • Cost of employees’ commute (32%)
  • Unreliable shift patterns, leading to inconsistent wages (25%)
  • Poor communication from employers about shift patterns and holiday allowances (24%)

To make matters worse, only 15% of the employers questioned offered staff any kind of financial literacy support to help them understand their payslips.

A mere 11% provided them with a platform to see their wage situation in real time.

How to engage retail employees and retain them

employee engagement in the retail sector (3)

Employers are increasingly aware of the challenges they face. In fact, employee retention has now taken over from recruiting as the key theme HR leaders intend to focus on in the year ahead.

Employee engagement projects top the list (41%), followed by manager training (35%) and learning and development activities (34%). Of particular focus for high-performing HR teams are programmes that link compensation with performance, and ensure compensation is fair, equitable and transparently communicated. Coaching and upskilling initiatives also rank highly.

Another study looking at priorities for retail leaders identified the following as essential:

  • Communicating consistently with the entire workforce (35%)
  • Retaining staff by maximising engagement (34%)

Develop payroll resilience to increase employee engagement in the retail sector

Building resilience within the payroll function is vital to ensure efficiency, accuracy, and positive employee engagement — in turn aiding retention.

But this can prove challenging, particularly for small retailers with in-house payroll teams of five or fewer. This means things like holiday or time taken off sick can disrupt payroll operations.

Another problem is fragmented IT systems. It’s time-consuming and inefficient for users to constantly switch between applications to complete a given task.

What’s more, if payroll and HR data is held in multiple, disparate systems, it can lead to inconsistencies, duplication, and gaps. This data might appear in different forms, be stored in incompatible formats and contain many inaccuracies.

Data gaps in particular create problems and more time-consuming work. The most experienced and diligent professionals will probably spot the inconsistencies, but this is a people-intensive rather than streamlined and automated.

But Zellis can help. Our dedicated teams of rigorously trained and highly qualified payroll professionals will act as an extension of your business. Accredited under the gold standard Payroll Assurance Scheme (PAS) by the Chartered Institute of Payroll Professionals, they will provide you with the best a fully compliant, high-quality retail payroll service has to offer.

Find out more about how we help leading retailers here.