As Karen Katz sees it, there’s a big misconception about retailing.
“People do think of retailing in a very one-dimensional way,” acknowledged Katz, who was chief executive officer of Neiman Marcus Group for seven years until February 2018. “They think of retail as salespeople in stores, but retailing is so much more than that today.”
There’s also a perception that retailing is low-paying, that it requires extra hours of work, and that it lacks career building. That, along with the nation’s low unemployment rate, makes it challenging for retailers to fill vacant positions across many levels.
“If you talk about Amazon, Walmart, Kohl’s or Neiman Marcus, we all need warehouse workers, web site designers, people with great data analytics and computer science backgrounds,” said Katz.
Today, Katz steps down as chairman of the NRF Foundation, and gets succeeded by Jeff Gennette, chairman and ceo of Macy’s Inc. It’s an important position, considering the Foundation’s ambitious objectives through its “RISE Up” program to elevate the image of the retail industry, attract more people into retail jobs whether it’s a first job, or a second chance for someone re-entering society from prison, or a displaced worker, and to ensure they have the skills to thrive at that job.
“I am sold on the mission of the Foundation and what it’s doing to create retail leaders of tomorrow,” said Gennette. “The Foundation has a lot of substantive programs that make a difference.”
The NRF Foundation spotlights the industry’s growing diversity of retail career opportunities, largely due to technology, omnichannel and service advances, and exposes students to newer opportunities such as in data analytics, logistics and building web sites. The Foundation raises money for scholarships through its annual gala held during the NRF’s “Retail’s Big Show” convention in New York, with $2.8 million raised last year, and $3.2 million to $3.3 million expected this year.
“The biggest pain points we hear from retail companies is the need for increasingly skilled and sophisticated employees for data and logistics positions,” said Ellen Davis, president of the NRF Foundation. “Students may have computer science degrees but don’t always think about retail. They may think about Google, but not necessarily about Home Depot.
“We also see an increasing need for retailers to keep their pipeline of frontline talent filled,” Davis added, referring to such jobs as sales associates, call center personnel and warehouse workers. Retail is considered the largest private-sector employer in the U.S. There were 16.45 million retail employees in the U.S. last year, slightly more than the 16.37 million retail workers in 2017.
“The dream scenario would be to increase the application flow, decrease the time it takes to hire people — and it can take a long time — and increase the retention rate,” Davis said.
The Foundation’s RISE Up program, Davis said, supports training programs and encourages retailers to recognize those with the Rise Up training, to expedite the hiring process. Those taking the program get a better sense of what retail work entails, so they’re not surprised when on the job and are more likely to stick to the job. Small retail owners report that the average total cost to hire and train a new employee can exceed, on average, $2,219 and there are many retailers that see part-time turnover for frontline positions of more than 100 percent annually.
Over the last two years, 50,000 individuals have been through the Rise Up program, which involves 30 to 40 hours in a classroom or eight to 10 hours online. They learn retail fundamentals such as customer service, handling conflicts with customers, inventory management, retail supply chain principles, and about career possibilities.
At the NRF convention, 1,100 students will participate in the Foundation’s student program where they meet retailers, listen to speeches, learn about internships, jobs and undergo some mentoring.
For 2019, “We’ve got a fairly ambitious plan to focus more on STEM,” said Davis, referring to science, technology, engineering and math educations. “We’ve got to make sure students coming out with STEM-related degrees understand what jobs are available in retail and how we can better fill the frontline positions.”
“Every retailer these days is competing for talent for warehouse jobs, IT teams, data analytics and marketing, whether it’s Neiman’s or any other retailer,” said Katz. “Everybody is challenged to find not just the right quantity of people but the right quality of people. That is a universal challenge for retailers.”
Asked if Macy’s has difficulty filling job vacancies, Gennette replied, “In our call centers, logistics centers and stores, we were ahead of our hiring goals all the way through the holiday. Hiring is up, turnover is down. We’re in a good place.”
Macy’s “Path to Growth” Incentive Plan, funded by corporate tax cuts and launched early last year, helps with employee retention and motivation. All Macy’s colleagues are eligible. Incentives, received quarterly, are tied to measurable goals. In the third quarter, 75 percent of Macy’s associates earned an incentive.
In technical areas, including data scientists and machine-learning engineers, “We’ve got a good pipeline of talent,” Gennette said. “We create them. We also look for them, and we need more.”
Regarding the RISE Up, launched two years ago, “Now it’s starting to really take hold,” said Katz. “Over the next couple of years, it could be a huge win. In 2018, 50,000 people took the credentials test. It could be hundreds of thousands over the next few years.”
“The second big accomplishment is the student program,” said Katz. “We have 1,100 attending. We’ve doubled the number of students we are hosting. We really encourage students with STEM backgrounds to attend the program to understand that retailers have great options for them. It’s so critical for the retail industry to be able to attract those kinds of people.”