Why Big Retailers Are Paying for Their Employees’ Education

The retail industry is at a turning point in its struggle to retain employees. According to a recent study by McKinsey & Company, almost half of retail frontline workers are considering leaving their jobs in the near future. The implications are significant, given that the industry employs more people than nearly any other.

Turnover can be especially detrimental in retail, where exemplary customer service is a main driver of business success. Retailers that don’t have enough frontline workers struggle to make sales. In fact, 31 percent of retailers say that staffing shortages are the primary culprit of their inability to meet critical sales goals.

Retail’s employee retention woes may thus explain why some of the biggest retailers in the world — including Best Buy and Adidas — have implemented expansive workforce learning and development programs. Research has shown that today’s workers are significantly more likely to stay at companies that prioritize employer-sponsored education, largely because it gives employees a major leg up towards the next stage of their careers.

By following the lead of major retailers and investing in their employees’ growth, retailers can build motivation, engagement and loyalty in their current staff while improving their appeal to young adults seeking to learn relevant, in-demand skills.

How Upskilling Builds Loyalty

In the past, retail workers who wanted to learn new skills were mostly on their own. If an employee wanted to pursue a higher-earning position or venture into another division of the company, it was that person’s responsibility to determine which skills were required and to acquire those skills. Retailers traditionally haven't provided robust or clear pathways to career advancement. What this communicates to employees is that the company is perfectly content with them remaining in their present positions.

Upskilling programs can change those perceptions. Sponsoring employees’ participation in training programs, academic courses and degrees shows employees that their company genuinely wants them to succeed and values their contributions on an individual level. When employees feel valued, they're often better engaged and more satisfied with their work. Employee engagement is particularly vital for the many brick-and-mortar retailers that seek to provide a memorable customer experience to compete with e-commerce.

Regardless of industry, it’s also considerably cheaper to promote existing employees to leadership positions than it is to hire outside talent. In fact, organizations that participate in upskilling programs typically see two to three times more promotions.

New Technology for Upskilling

Another factor in the rise of upskilling in retail is the industry’s increasing use of new technology. According to McKinsey, more than 50 percent of essential tasks and activities in retail can be automated. This suggests that the skills retailers rely on to stay competitive in the future will be very different from the industry’s traditional skill set.

For retail workers, this technical knowledge is directly relevant to their everyday tasks. Upskilling programs can help them acquire these technology-related skills through IT certifications, coding boot camps, and undergraduate or graduate degrees from top-tier institutions. By becoming more deeply engaged with new technology, retail workers can streamline processes like inventory management, customer service and sales tracking, making their work more efficient and meeting the demands of modern consumers more effectively.

Continuously sponsoring employees’ participation in technology-related courses also instills a culture of lifelong learning, which is crucial for staying up-to-date with the latest innovations. Technology is constantly evolving, and what’s relevant today might not be relevant five years from now. However, if employees are already accustomed to staying ahead of the game through continuous learning, they’re less likely to be caught off guard when their required skill set changes once again with the introduction of yet another piece of new technology.

Building an Upskilling Program

A great starting point for developing an upskilling program is determining which specific skills the program should target. Employees are more likely to participate in upskilling programs when they can see the connection between the subject matter of sponsored courses and their daily responsibilities.

To identify in-demand skills or areas in need of improvement, retailers can conduct assessments of the skills gaps within their workforces. This could take the form of surveys, interviews and regular performance evaluations. In addition to new technology, retailers may find that employees could benefit from courses related to leadership, language learning or business management.

Retailers can further incentivize upskilling participation by connecting the dots between specific courses and qualifications for certain positions. Employees may be more inclined to take challenging courses if they know it will help them advance professionally. Providing a clear pathway towards higher-earning positions makes these roles more attainable, giving employees another reason to stay with their current employer. By outlining the specific skills and courses required for higher-earning positions, retailers can also prepare employees for leadership roles or the introduction of new technology.

Final Thoughts

As the retail industry becomes more competitive, organizations are realizing that the contributions of every individual employee factors into their success. Upskilling presents a sensible strategy to create motivated and highly skilled teams capable of providing stellar customer service and quickly adapting to new technology.

Enterprise retailers have gotten a head start on this process, and their smaller and medium-sized counterparts would be wise to follow suit before their existing employees are lured away by competitors both within and outside the industry offering more opportunities for career advancement.

Gurpreet Singh, group vice president at InStride, leads the development of corporate partnerships, helping employers in the franchise, retail, technology, travel and hospitality sectors provide life-changing education to employees through partnerships with high-quality global academic institutions.