HFA Reports: What’s Keeping Retailers Up at Night?

HFA Reports

What is keeping HFA members up at night? Hint: It’s not the supply chain.

I recently moderated a panel discussion with several CEOs from our industry. Each was asked what is the main business issue that keeps them up at night? After the last 19 months, we might suspect that supply chain worries are making these CEOs restless, or perhaps the continued threat of inflation.

Instead, they collectively and independently pointed to one word as their sleep-sapper: “labor.” Perhaps the biggest issue coming out of 2021 and, therefore, the biggest challenge of 2022 is how to manage retailers’ needs when hiring their sales staff, warehouse workers, and delivery crews. There are consistent issues in each of those areas.

Let me clarify one thing. Yes, stimulus funds from 2020 and into early 2021 kept a lot of potential employees at home and off the job. However, let us be honest with ourselves. Our industry has had a tough time presenting itself as a career rather than a job for years. Home furnishings came into this pandemic battling that perception.

The Sales Floor

When it comes to the sales floor, many retailers are finding it more difficult to entice people to take commission-oriented jobs. Many job seekers have concerns about how quickly they can become proficient at creating a pipeline. Others worry about adapting to the uncertainties of commission sales and its hunter-gatherer approach. The panel of CEOs discussed strategies they’ve taken to help interviewees to become more comfortable with the idea. Some have gone to a model where they provide an upfront draw against commissions to transition new team members into commission sales. Others start salespeople out on salary and then transition to commissions. Some retailers have even switched over to paying hourly wages. It is hard to say which one of these options works the best. The point is, creativity is at a premium right now when it comes to luring and keeping retail sales associates. As we all know, it’s much more expensive to replace people than to retain them. One top-100 retailer told me they evaluate if new salespeople are keepers within the first 90 days of employment. He said, “We realize that you can’t put a square peg into a round hole, so if someone is just not going to be comfortable and not a good fit for commission sales, we need to make the change sooner than later.”

The Warehouse

On the warehouse side, it’s become a battle of hourly wages. Many HFA members have boosted their base pay rates dramatically over the last 12 months. It’s all been about keeping up with Amazon or other large distributors down the street that will bump wages fifty cents an hour to have an advantage. How can home furnishings retailers compete? Many are doing their best to make sure work environments are more friendly and attractive. Wages are a major consideration for job seekers, but when similar wages are offered by competing companies, working environments and company culture can tip the scale. One CEO told me he focuses on open communications to help warehouse and delivery people feel like part of the overall team.

What are you doing to find, hire and keep great people in 2022? Addressing that question and finding a successful answer for your organization will positively impact your business and just might improve your night’s sleep.

For more information on what HFA is doing to empower furniture retailers for continued success, join the community at myhfa.org .