Case Study Who Wants To Work in Fashion Retailing

Introduction

London West End is the ultimate fashion capital of The United Kingdom. Often referred to as The West End, it is at the heart of London consisting of such famous streets as Oxford, Regent and Bond streets. As the fashion capital of The UK, the place has an abundance of fashion retail stores ranging from the very expensive, expensive to the cheap. Therefore, many people flock here every day with the view of getting the latest in vogue clothes, shoes, lingerie, brassieres, caps, jewellery, wedding gowns, and ties while some visit just for the purpose of window shopping. However, recruitment of staff at these fashion retail stores has been problematic in the past few years. This can be attributed to many factors. This paper looks at some of the issues that the owners of these retail stores face while recruiting new staff for their stores. Later, it will also look at the challenges these same owners face in retaining the already recruited staff.

Recruitment of Staff Challenges

In The West End, there are many small scale retail stores as well as large stores. Unlike the latter, the former have had problems in recruiting new staff as they don’t have access to enough funds that they can spend on advertisements for the job vacancies. Therefore, most of them use the informal word of mouth recruitment method. While this is cost effective, it is largely inefficient (Ram). This is because there is a very small probability that the word will get to the qualified personnel. This method may lead to the retail stores employing incompetent staff who may lead the retail into making losses.

Some of the retail stores don’t subscribe to the recruitment agencies during the recruitment exercise. This may be due to the costs involved in using the agencies’ services. As a result, these stores will employ the face to face method of recruitment. Although this method is common, it has proved incapable in vetting the true capabilities of a worker as it doesn’t offer effective training (Ram). Additionally, many potential workers are reluctant to go through face to face recruitment as opposed to the agencies.

The West End is located in the heart of the city center. Hence, the place is prone to crime activities, especially in the retail stores. The place has the highest retail crime rate in the whole of England. It is estimated that about 5.8% of trade is lost through crime. Having such a reputation negatively affects the recruitment of new staff as many potential workers are wary of their safety. Therefore, they will tend to avoid working in the area as they opt for more safe places. This creates a problem for the employers as they lose out on potential competent staff. The threat of potential terrorist attacks is also real, even among the retailers themselves (PRNewswire).

There have been many entrants of foreign fashion stores in London West End over the past few years. While this is laudable for the market, it has had adverse effects on the already existing stores. Many of the foreign stores sell accessories that are cheaper alternatives in the market. This has forced the existing stores to run on a low budget. Therefore, they have been offering non competitive wage packages to the workers. This works as a deterrent to potential qualified workers who deem the pay too low for their expertise. This has led the retail stores to rely on staff that may not be qualified.

Most of the fashion retail stores offer jobs on short term basis due to the nature of the business itself as most of them are not prepared to face the challenges of the legalities of a long term contract gone bad. While this is good for the store owners, many potential qualified workers are always reluctant at such an agreement. This is because, at this climate, many workers need to be guaranteed their job safety. If there is no such guarantee, they are likely to look elsewhere in other sectors that would guarantee their job safety in the long run.

New research has suggested that standing for long hours is harmful to health. This research makes an already bad situation worse. This is because since working at the retail stores involves standing for many hours, many would be workers would be reluctant to start working at the stores for fear of their health. Specifically, the research found out that prolonged standing can cause varicose veins, difficulty in pregnancies, feet and leg swellings leading to poor circulation, heart problems and general foot problems (Hazards Magazine). The research was also conducted on retail staff. Therefore, retail owners face another real challenge when new staff has to be recruited.

Many of the small scale firms and businesses most of the times tend to look for friends and extended family members as part of their staff. This is because the owners trust these staff more. This scenario is especially rife in the retail stores (Ram). However, such a practice should be discouraged as the other workers may feel uneasy at the retail store due to this clanism at the work place. This may lead them to lose morale at the work place and may discourage would be workers from joining the retail stores.

Apart from the challenges when recruiting new staff, employers have been having problems in retaining the staff within their premises. This is because of many problems that are facing the industry in the area. The following section of this paper looks at some of the challenges.

Retaining of Staff Problems

As the paper had noted, there have been a massive entrance of foreign competitors that offer fashion accessories at relatively cheaper prices.  Since these prices are very attractive to the customers, they (customers) have gone for these cheap clothing as they ditch the seemingly expensive accessories of the already existing retail stores. This has led the retail stores to make low sales. This has led them to be run on a low budget hence offering low wage packages. These employers have been unable to adjust these wages according to the rising cost of living. This has seen the employees at the retail stores ditch their current employees in search of better paying jobs.

A study in late 2008 found out that most West End retail stores forced their women employees to put on high heels (Waugh). The prolonged use of high heels may lead to feet and back problems. In most cases, the workers were obliged to follow this directive against their will. Such a move will undoubtedly leave the workers with no choice but leave their work if another opportunity presented itself.

As the fashion hub of The United Kingdom, retail staffing at the West End is the most expensive in the kingdom. This makes the operating costs of the retail stores very high. Therefore, the retail stores have to limit their expenses. This in effect means that the probability of raising the wages of the workers is low. Such a scenario makes the retention of workers hard as the cost of living rises.

West End retail stores are also faced with other environmental hazards. For example, the workers are confronted with noise and air pollution, litter and they are exposed to elements that may be harmful (GLA Economics). These environmental factors deter workers from working for a long time as they fear for their health. This especially affects the older people of the society and women. A report also showed that The West End lags behind other retail stores in the country in offering public amenities like toilets (PRNewswire). All these environmental hazards contrive to make worker retention even harder. The place is also viewed by many as being not child friendly (GLA Economics).

The economic crisis and recession that currently prevails in Europe and England have been felt almost in all sectors of the economy. Many people are now wary when it comes to spending. The banks have been posting poor results, making them reluctant to give out large loans. This has forced some retail stores to incur losses while some have been forced to close shop altogether. The rest are making very small profits as the sales have slumped (History Extra). Faced with such economic hardships, retaining the existing workforce becomes very hard as the stores go for cost cutting measures. Some have been forced to cut on their operations, laying off some workers in the process.

Technology has advanced greatly over the past few years. This has been welcome in many businesses and factories around the world. This is especially true in the West End retail stores who have taken up selling their stuff over the internet. This practice has been promoted by the advent of social networking websites. Such technological advances, when adopted by the retail stores, make a part of the workforce redundant.

London is a very cosmopolitan city with diverse cultures and residents from all walks of life. It is believed to be the most ethnically balanced city in the world (Dougherty). Therefore, the West End retail stores have access to a diverse pool of workers to choose from. However, this brings about some problems. For example, some of the workers may be illegal immigrants in the country while others may be there in the short term. Others may have cultures and mannerisms that are undesirable in the retail stores. For an employer, retaining such an unreliable workforce for a long time may be very tricky.

Since most of the retail stores offer jobs in the short term, they are very popular with workers who desperately need some form of income as they look for a more reliable job with better perks. This is especially true for new graduates who see working at the stores as a stop gap measure. When such workers see a better opportunity they will go for it immediately, leaving the stores understaffed.

Most of the retail stores, as already discussed, offer their workers short term contracts. Most of staff work part time and are paid per hour of service. The employees may do everything in their power to retain these workers for a long time but may not succeed in the end. This is because studies have shown that 50% of such workers leave their jobs after just six months. The reasons may vary. Therefore, it is very difficult to retain such part time and hourly workers.

Approaches to Improve Future Recruitment and Retention of Floor Sales Staff

The latter part identified and analyzed the issues facing recruitment and retention of floor sales staff at London’s West End fashion retailing store. In this section, we will propose some alternative approaches that will help improve future recruitment and retention of the floor sales staff and provide a justification for the approaches we are going to propose.

Recruitment is the process of attracting, screening and selecting the most qualified personnel for a position in an organization. It is important that as management this activity is done in an effective manner in order to get an effective workforce who will be the face of the company. We believe that good recruitment is not just hiring an employee but it is finding the right person for the job whose implications for the business performance and image with customers will leave a lasting impression for the customer. As the HR department, we have realized that selecting and retaining great key floor sales staff is key for our business success as hiring an employee is just but only a first step in a long process.  We need talented sales floor people who can increase their value to the organization as well as be appealing to our customers. We have realized that we need to create a conducive environment in which the employees will continue to thrive and made feel that they are part of the company too rather than just being employees (Rouble, p.9).

Edith and Stacey (2001, p.22) suggests that while organizations are working to retain their employees and reduce higher turnover, it is equally important that they improve the recruitment process. It is a tough call to find the right fit between an employer and an employee but is vital to decrease turnover. This is because if not attracted to the company, employees who have worked less than 6 months in the company are more likely to leave the company than those who have worked longer like say 2 years. So what should be done right during recruitment to ensure we have the best employee who can stay with the company longer? During recruitment, it is important that we get past information of the employee from the employee’s referrals. Temporary employees should also be moved to a permanent status to attract them to into staying longer.

According to Louisa (1998, p.5), employers are finding it hard to attract qualified employees and even harder to keep them on board. A survey by a management consulting firm, Watson Wyatt Worldwide, found out that 86 percent of companies that were polled said they had difficulties in attracting while another 58 percent said they were having trouble retaining the. Despite all these difficulties, it was found out that only 58 percent of the companies had a formal strategy for recruiting employees and some did not even have any plan on how to retain current employees. Therefore, what can a company do to retain employees? Louisa starts by asserting that a company should articulate its rewards plans to both interviewees and its employees. This is because, according to the survey, those companies that had communicated these benefits showed that they had a 13 percent lower turnover rate than those without any clear plan in place. It is also vital that as a company we consider the rewards that we are ready to offer. This is because the survey showed that strategic rewards like merchandising, education, travel and training are able to attract and retain employees because they associate these rewards as traditional merit-pay increase like it was their due. The study also found that those companies which links reward to business strategy greatly had a stronger total shareholder returns as compared with those companies which had a weaker link. The reason for linking rewards to business goals is that employees will be at a better position to understand how and why they are paid and with that understanding; they will want to perform in such a way as to boost the bottom line (Louisa, 1998). In our company, I feel that we do need to boost employee confidence and motivate them to continue working for us. We need to introduce a rewarding system in such that those employees who have stayed longer in the company are given some specified rewards in order to retain them.

Edith and Stacey (2001, p.22) advice that the first step in decreasing turnover is understanding why employees are leaving. In our case, we have discovered from exit interview that employees are aggravated about the number of hours (they work 7 hours) and the small wages is what is making them to leave the company. Because most of our employees are migrants, they feel the low wages offered to them are not worth leaving their countries to come and work here. We also realized that those employees who could want to work within the fashion industry see floor sales as a ‘dead end’ job and see that they have no chances of progressing with that career. After understanding what causes employees to leave, we need to take appropriate measures to stem the situation.

Edith and Stacey (2001, p.22) present an employee retention plan that can be one of the effective ways on the high turnover. The five steps that they propose are as follows;

1. Evaluating turnover and retention problem. It is imperative that we calculate turnover rates for the past few years (4 or 5 years) that employees have identified as their reasons for departure (like what we did through exit interviews). It is also important that current employees are interviewed especially those who have stayed at the company for more than two years to know what keeps them at their job.
2. Developing a plan on employee feedback. We need to evaluate the information gathered from step one above and then hold meetings with management team and discuss issues related to retention. This meeting should later extend to accommodate all employees. Important to evaluate organizational culture that made the employees leave.
3.    Stage three we need to get the rest of management team to get involved. We should make management part of the solution by involving them in the process. We should develop specific problems for the problems that were identified earlier. We should also take the initiative as the HR department to provide management training on the importance of introducing rewards in the workplace. The role of communication should also be emphasized. We should prepare our own employee retention issues at this stage.
4. Here we need to communicate the management commitment. It is vital that we develop a retention focused employee plan here. Implementing a regular employee briefing on what has been made out of the meeting and encouraging staff at all levels.
5. The last step is that of repeating and perfecting the retention strategy. Repeating steps 1-4 in 6-12 months to determine whether the factors highlighted earlier have changed and if not go all over the steps again. We understand that in a changing environment especially in the fashion industry, there is no perfect solution.

Retention Strategies

Compensation

After recruitment, it is time to look at employee compensation. Compensation is a primary reason for the sales floor employees working at our company and therefore it matters. Although at £6.50 per hour we are slightly above the minimum wage of £5.93, compensation was viewed (from exit interviews) as the main reason why most employees were leaving. Compensation can be modified to include cash benefits, non-cash benefits or increasing working hours so that employees are able to accrue overtime (Edith and Stacey).

Focusing on Employee Development

It is important that we recognize that people want to learn and grow. Exits interviews had shown that some employees leave the company because they feel that they have no future being floor sales employees. We should therefore initiate programs that can be effective to boost employee retention. Well designed programs like a plan to transfer sales floor employees to a different higher position that can help keep higher performers challenged to remain in the company. Providing adequate advancement opportunities will foster employee loyalty and letting employees know about it. A development plan will keep employees a reason to stick for longer (American Society of Radiologic Technologists).

Fostering a Teamwork Environment

Floor sales employees may feel ‘lesser employees’ and therefore it is equally important that they are made to feel as part of the company. Thus, as the HR team, we have to devise means to make them understand their purpose, mission and goal in the company. Encouraging their participation, discussion and sharing ideas with them by say asking them to make a certain decision through collaboration makes them feel wanted and important in the company. Encouraging senior employees to appreciate sales floor employees will improve their performance and retention and even encourage new employees (American Society of Radiologic Technologists).

Conclusion

The paper has highlighted at some of the issues that the owners of these retail stores face while recruiting new staff for their stores. We have seen how imperative it is for management to acknowledge the importance of employees in any organization. HR initiatives which impact positively in the organizations by aligning employees that will implicitly foster the relationship of employees and the organization. The suggested method above should be used and we are positive it will have a significant positive impact in retaining the floor sales employees.