Rachel Silverman
Associate Partner
Human Capital Solutions
Gina Wellmaker
Associate Partner
Human Capital Solutions
Marco Sneider
Director, Sales Force Effectiveness
Human Capital Solutions
How have retail sales practices evolved since
COVID-19?
With constant change accelerated by the COVID-19 pandemic, many retailers are questioning goal setting and incentive pay for employees. Pandemic-related store closures and a shift to more online purchases have brought alternate methods of measuring performance and defining sales credit to the forefront.
In support of our retail client community, Rachel Silverman, Gina Wellmaker and Marco Sneider, all leaders in Aon’s retail practice, recently conducted a series of interviews with rewards professionals at top retail organizations in the United States to get a sense of how their sales practices are evolving. We asked them to share key findings from their conversations.
How has goal setting for retail employees changed since the COVID-19 pandemic?
At the onset of the pandemic, many organizations stopped tracking goals given the unpredictability of store closures, reopenings and foot traffic. Most retailers had set goals based on store sales volume, but with such heightened focus on digital sales, sales leaders needed to pivot. While nearly all retailers have now welcomed customers back into the store, online sales remain higher than prior to the pandemic. Therefore, digital sales are commonly integrated into the overall target-setting process. With uncertainty still looming, most retailers have reported their attempt to reestablish a baseline of normal by transitioning back to 2019 goal levels.
With the rise of online purchases, what new methods are retailers using to measure performance?
While there is still a wide spectrum of plan designs, we see retailers shifting away from solely focusing on in-store sales to define performance. More commonly, the industry now measures performance based on some combination of district, fleet or company performance, in addition to store performance. In many cases, there are still outstanding questions on how online sales and returns are allocated, and so plans remain in transition.
What impact has the pandemic had on incentive pay for employees?
Changes in incentive pay varied considerably, largely based on which retailers were considered essential versus non-essential. Many non-essential workers received incentive pay early in the pandemic to help recognize the risk workers were taking by being present in stores. Those programs were largely discontinued after a few months into the pandemic, as retailers realized it was not financially feasible to pay out incentives with such unpredictability in store sales and reopenings. Non-essential businesses were, in certain cases, forced to furlough or even lay-off employees. With sales down, it was evident that employees would not reach their original performance goals, prompting some companies to provide guarantees or change the measures of performance to adjust to the shifting landscape. Most firms are in the process of redefining their plans on a broader set of performance metrics for 2022.
How have retail roles and talent pools evolved? What specific skills are companies now seeking?
The talent pool for retail workers has always been broad, which fortunately means there is a large number of potential resources. That said, we know that retailers today are defining their job profiles more carefully than in the past. In most cases, jobs within stores are becoming broader, prompting companies to look for workers who are agile, curious and open to learning. They need someone who can not only sell in-store goods, but also introduce customers to alternative online options and fulfill and deliver orders that come through e-commerce channels.
What are the biggest challenges that retailers face in the future and what is your advice for meeting those challenges?
The labor shortage is not predicted to ease any time soon. With rising wages and the potential for additional pandemic-related disruptions, retailers are enormously challenged to meet hiring needs and retain employees. Store jobs are particularly difficult to fill, as they are competing with both online customer service jobs, which oftentimes allow for remote work, and distribution jobs, which tend to pay more. However, retailers can differentiate themselves as a favorable place to work by providing more flexibility, where permittable, creating a culture of purpose through their brand and developing dynamic career paths for growth and progression.
For more information on how we support companies in their retail sales transformation, please write to humancapital@aon.com.