Overcoming the Labor Crisis: Hold Onto Existing Employees

NATIONAL REPORT — To some, solving the labor shortage is a simple issue of supply and demand: offer higher wages and prospective employees will show more interest.

It's true that money is a shortcut to being more attractive as an employer, and non-competitive pay rates will put businesses at a disadvantage no matter what. However, it won't get convenience store operators all the way to their destination of having a fully staffed business with minimal turnover, as many retailers both in and outside of the c-store industry have reported continued staffing shortages even after boosting wages.

The COVID-19 pandemic is something of a smokescreen for bigger problems in the retail labor market, according to Steve Kramer, CEO of digital platform WorkJam.

"There's a recalibration happening in the labor market," Kramer told Convenience Store News. "It started before the pandemic. People understand they have choices. … The end of the pandemic won't make all these problems go away — this is a new reality."

Some of the choices workers make are tied to the values and culture of an organization. Five or six years ago, a job was a job, according to Kramer; today, people are taking a closer look at where they work. Businesses that demonstrate a sincere commitment to the issues people care about, such as diversity and innovation, are positioning themselves to have a competitive advantage over businesses that offer similar work and pay scales.

Improving company culture is well worth doing, but it is also a long-term task. C-stores can take a variety of other steps to ease the pain of the labor crunch in the short- and medium-term.

While the pandemic may not be the only reason it is harder to hire and keep employees, addressing COVID-related concerns is a must-do. Former retail employees who have expressed hesitation about returning to their former jobs overwhelmingly list fear of contracting COVID-19 and the need to feel safe in their work environment as factors in their decision. Businesses that prioritize safety may find it easier to lure back these experienced workers.

Maintaining improved cleaning protocols, mask requirements and physical barriers help fight transmission of the coronavirus and make it clear which businesses recognize it is still a danger. Retailers can also encourage COVID-19 vaccination by offering paid time off for vaccination appointments and recovery from post-vaccination side effects, plus incentives for vaccinated employees.

A simple but effective approach is for retailers to simply ask employees whether there is anything else they can do to make them feel safe, and truly listen to the answers. Employees who feel that their concerns are heard and acted upon are more comfortable at work and more likely to stay, according to integrated cash distribution network Loomis.

The pandemic has also made employees concerned about health benefits. A recent survey conducted by job search platform DirectApply found that jobseekers are looking for "fundamental" benefits, with health insurance listed as the top desire for nearly one in five people. Other in-demand benefits include dental and vision insurance, paid vacation, and a 401(k) plan.

Improving the Employer-Employee Relationship

To get more potential employees in the door, some businesses have begun offering cash bonuses for new hires, but Kramer is skeptical regarding the long-term value of such bonuses, especially considering that employee retention is as important as the initial acquisition.

"I really don't think money is the only solution," he said, instead pointing to the value of creating a productive environment. "The relationship that an employer has with their employee is really important."

One method of improving that relationship is finding new ways of being flexible to meet employee needs as well as the needs of the business. Workers may struggle to balance their jobs with childcare or other family duties, especially when many children face the prospect of virtual learning during the school year and high-risk individuals may still limit contact with non-family members due to the pandemic.

Identifying good employees and scheduling around their obligations makes it easier for them to stay than to go through the process of searching for a new job that will fit their schedules.

Retailers may also want to consider scheduling half-shifts for employees who are willing to work but have limited slots of availability, or setting shift changes outside of rush hour to cut down on travel time if they operate in a densely populated area. Chains could also authorize employees who are looking for extra hours to work at multiple locations.

Additionally, while it may become more difficult to both be flexible and build a reliable schedule, employees appreciate knowing their hours farther in advance. The retail industry is notorious for schedules being released at the last minute, which means businesses that offer more advance notice will stand out.

The use of digital tools to attract and retain workers goes beyond scheduling software. Paytronix Systems Inc. recommends c-store operators consider the use of employee dining programs, which have evolved from free meals during a shift to something more dynamic. They are now part expense account, part loyalty, part employee retention and part motivation, according to Scott Walters, head of convenience store sales at Paytronix.

"The style of the program is driven by the c-store brand's needs and goals. These programs are extremely customizable, and the functionality of the program is driven by the retailer's goals," Walters explained. "Employee programs can be used to motivate and incentivize employees, to retain staff, to run integrated marketing campaigns, to communicate directly with employees, and to track employees' purchases."

Retailers can choose to offer different incentives based on their needs and what they want to offer employees. Options include discounts, incentives for overtime, reward dollars, and more. Incentives can be loaded onto employee accounts as redeemable rewards, bankable points or discounts on specific products, and can be capped at certain dollar amounts.

"At Paytronix, we look at things through the lens of loyalty and ask: What is going to keep consumers and employees happy and engaged with the brand?" Walters said. "We recommend the same strategies that have long been successful in retaining customers: reward the employee for being loyal to the brand and create a personalized experience.

"Under an employee program, that might mean allowing employees to earn double or triple points per hour of overtime, which they can then use to fill their gas tank for less," he added. "It could also mean allowing employees to choose their own rewards, so they have a personal, rewarding experience with the brand. The same strategies that keep customers coming back will encourage employees to stay loyal to the brand as well."