5 HR challenges in the retail industry and how to overcome them

The top 5 HR challenges in the retail industry are: 

1. Retail talent acquisition and recruitment  
2. Lack of effective retail training and development  
3. Promoting retail employee experience and engagement  
4. Effective retail workforce management and planning  
5. Ensuring retail compliance and safety  

Retail has typically experienced a high turnover of staff compared with other industries, likely due to a number of factors such as low wages, long hours, lack of job security, as well as limited benefits and opportunities for advancement or career progression. Large retailers compete not just for customers, but for talent – particularly in tight labour markets where skilled retail professionals have multiple options. This competition represents one of the most significant HR challenges in the retail industry, extending beyond filling positions to building talent pipelines that support expansion plans and succession requirements across the enterprise. 

This view of the industry is born from its competitive nature and the need to have low operating costs to support its equally low margins. Therefore, retail jobs can often be seen as entry level roles, usually for young people who are looking to gain experience in the workforce, or for part-time workers looking for a degree of flexibility to support children and other home commitments.  

As a result, the retail industry generally has a high turnover of staff which can be costly for employers and HR departments who must respond by continuously recruiting, hiring, and training new employees. 

To reduce turnover in retail, HR departments are increasingly looking to invest in both the right people and the right operating systems. Although this could be challenging for retailers with limited budgets or those facing stiff competition for talent, a well-rounded offering for employees is key to making retail careers more attractive, as well as provide the basis for an effective retail talent acquisition strategy. HR departments could consider the following when it comes to retail talent recruitment and retention: 

• Provide opportunities for career growth by offering retail training courses and other development opportunities and promoting personal and professional development enabling staff to develop and progress internally as the business matures.
• Recognise and reward employees for hard work and dedication through performance reviews and 1-2-1’s, bonuses, promotions, and digital tools that support employee engagement in the retail sector. 
• Offer a competitive living wage salary and competitive compensation packages such as flexible employee benefits that suit their lifestyle, this could consist of health insurance, flexible working, enhanced pension contributions and on-demand pay. Learn how retail businesses are utilising employee benefits to reduce employer NICs while driving engagement and retention in our latest Employee Benefits report, featuring real-world examples and practical strategic insights. 
• Invest in technology that could help automate tasks such as talent acquisition software for recruitment, which would increase efficiency of staff, reducing frustration and in turn improving overall customer experience in retail. 
• Offer competitive compensation packages to support retail talent recruitment strategies, along with a positive work environment and opportunities for career growth. 

Due to the high turnover rate of employees in the retail industry, training and development can often be overlooked. Many retailers hire employees on a part-time or seasonal basis, and as a result, these employees may not be given the same level of training as full-time staff. Whilst the retail industry is highly competitive, and many stores often focus on cutting costs to remain profitable, the benefits and ROI that come with investing in training and development can outweigh the initial upfront costs. Take a look at our article How much does a learning management system cost for more details. 

Improving your training and development opportunities could ensure staff grow and develop to match business needs, regardless of their role. Paired with a consistent programme, you can support your brand by ensuring clarity and control over how the business is presented to consumers. Great consistent high level customer service has been proven to increase customer advocacy. 

Successful training and development implementation can be achieved on any budget by: 

Developing a comprehensive training programme that covers all aspects of the retail business, from customer service to product knowledge to sales techniques. 

Invest in managed and self-directed eLearning tools to help ensure employees complete mandatory training required of them, but also provide them with access to courses to help them progress in their role and career. Offer incentives to employees who complete training courses or demonstrate mastery of certain skills. 

Provide feedback to employees on their performance and progress in training. 

Managing employee experience across thousands of workers in dozens of locations requires a fundamentally different approach than traditional engagement surveys and recognition programmes. Among the most persistent HR issues in retailing is creating consistent, personalised employee experiences whilst maintaining operational efficiency and brand standards across diverse locations. 

Retail employees often deal with long hours, low pay, and difficult customers which can lead to low morale and a lack of motivation. Combined with limited training, they often do not feel equipped to provide the best customer service, which can lead to customer challenges and difficulty remaining competitive.   

Another key area often overlooked and that causes de-motivation is lack of recognition. Even if you have great colleagues that can deliver a great service, they soon become withdrawn if they are not recognised and are undervalued for their efforts.  

How to engage retail employees with a technology-first solution 

Practical solutions for improving employee engagement in the retail sector and the wider employee experience could include: 

• Recognising employees for their hard work and accomplishments. Offer rewards and recognition programmes. 
• Improving communication between management and employees. Encourage open dialogue and feedback. This is most effective when employee feedback is acted upon – ignoring this can be more harmful than not collecting the views in the first place. 
• Creating a positive work environment by providing employees with the necessary resources and support. From training and development and clear objectives to maintain their engagement, through to automated HR systems to make their day-to-day tasks simpler. 
• Use internal communication tools to reinforce company news, showcase exceptional work and update key milestones on larger company projects, this will create a collaborative and empowered workforce. 
• Rather than annual engagement surveys, leading retailers are implementing continuous feedback platforms that capture employee sentiment in real-time. This enables rapid response to emerging issues before they impact customer experience or drive turnover. 
• With frontline retail workers spending minimal time at desks, mobile-optimised HR platforms become essential. This includes everything from shift swapping and training access to performance feedback and recognition, all accessible via smartphone. 

Large retailers operate in an environment of constant flux, with seasonal peaks, regional variations, and unpredictable consumer behaviour creating workforce planning complexity that represents one of the most significant HR issues in retailing. These HR challenges extend far beyond simple scheduling, requiring enterprise HR teams to balance workforce costs with service delivery across hundreds of locations whilst maintaining operational resilience. 

In an industry that is very much seasonal, has employees on multiple contract types and often requires specialist skills to support health and safety and compliance regulations – how can you use your data efficiently to improve your approach to retail workforce management? 

• Technology: The most effective way to support workforce planning is to implement HR software for retail that helps streamline and automate your retail workforce management and scheduling processes. An end-to-end HR system like PeopleXD Evo can provide detailed reports about workforce costs and productivity levels, as well as help identify any staffing and skills gaps that may exist. When evaluating HR technology solutions for your retail workforce management needs, our Go to Market Checklist provides expert insights to help you separate compelling demos from scalable solutions that truly work for your people and goals. 
• Predictive analytics: Advanced retailers are implementing workforce analytics platforms that integrate customer footfall data, sales forecasting, and employee performance metrics to predict staffing needs weeks in advance.   
• Communication: Although technology will support the practicalities of workforce scheduling and planning for the business, to be truly efficient you need to ensure the benefits of such a platform is understood by employees and supports them also. A good workforce planning system like PeopleXD Evo will help employee self-serve and manage their own schedules, enabling them to view and swap shifts from a mobile app, as well as provide them with a clear communication channel between them and their manager. 

By balancing automated technology with effective communication channels, businesses can ensure that they have the right number of employees scheduled, at the right times, in the right roles to provide the best customer service and the most efficient operations. If your retail organisation has scaled beyond basic HR tools and you're experiencing workforce planning challenges, our comprehensive guide to Moving up the HR Tech Stack walks you through the entire upgrade journey from recognising when it's time to change to successful implementation. 

Large retailers face compliance requirements that represent some of the most complex HR challenges in retail industry, extending far beyond basic health and safety to multi-jurisdictional employment law, data protection across customer and employee information, supply chain compliance, and emerging ESG reporting requirements. With your employees being your number one defence against risk, well communicated compliance and health and safety protocols help ensure that all employees are following the necessary internal safety and data sharing procedures and that the environment is safe and secure for customers. 

However, compliance and safety are not just limited to the management of risk within the retail industry. New regulations require companies to regularly report and review their risk mitigation procedures to reduce the risk of potential workplace accidents, including data protection and system breaches. If these safety and compliance breaches aren’t managed effectively, they can lead to costly legal fees, lost productivity, and reputational damage. 

With such an array of compliance and safety factors to consider, retail businesses need robust solutions to manage these challenges: 

• Create clear policies and procedures that are regularly reviewed and updated with best practices and up to date information. Align these procedures with mandatory training programmes that are tailored to the unique needs of your organisation and ensure employees understand their specific roles related to compliance and health and safety. 
• Continual monitoring and auditing of employees and the business in general should be implemented to ensure compliance and safety standards are being met. For large operations, manual compliance tracking becomes impossible to scale effectively. Automated workflows ensure consistent application of policies across all locations whilst reducing administrative burden on local management teams. 
• Utilise technology with multi factor authentication and automated processes to make data compliance simpler and enable restricted access to key staff members to reduce the potential of cyber breaches. End-to-end HR and payroll software for retail with a single source of truth for all company information and data, will help increase visibility in the retail operations and where perceived risks may lie. 
• Establish an incident response plan to quickly and efficiently deal with any compliance or safety incidents that may arise. Appoint dedicated colleagues within the HR team who are better equipped to manage employee coordination and communications in the event of an incident. Make sure all employees know the plan and how to respond. 
• Utilise learning and development training platforms to create a single library of training and development materials that all employees can access from anywhere at any time, and L&D and HR managers can set up as automated workflows for employees to complete mandatory compliance training which can be more efficiently monitored and reported on. 

Addressing the complex HR issues in retailing requires more than traditional HR systems. Large retail enterprises need sophisticated platforms that integrate seamlessly with existing retail technology whilst supporting diverse workforce needs across multiple locations. Some factors to consider for choosing the right HR software for retail include: 

• Integration capabilities – Connect data stream for comprehensive workforce insight 
• Mobile-first solution - Employees should be able to access schedules, complete training, request time off, and receive performance feedback directly from their smartphones. 
• Scalability considerations - Handle increased data volumes, support additional locations, and accommodate diverse employment models 
• Security and compliance - Multi-factor authentication, role-based access controls, and automated compliance reporting become critical for protecting both employees and customers whilst meeting regulatory requirements across multiple jurisdictions 

The retail landscape of 2025 demands that HR leaders in large enterprises think strategically about workforce decisions as competitive advantages rather than operational necessities. The HR challenges in the retail industry have evolved beyond traditional administrative functions to encompass strategic business partnership, where the role of HR in the retail sector directly influences customer experience and market positioning. 

Current HR trends in retail industry show that success requires moving beyond traditional approaches to embrace data-driven, technology-enabled strategies that integrate workforce planning with broader business objectives. The most persistent HR issues in retailing like turnover, skills gaps, and operational inefficiencies, can now be addressed through HR software for retail that has predictive analytics, AI-powered solutions, and strategic workforce development. 

How individual organisations respond to these specific HR challenges in the retail industry will play a major role in the future productivity and engagement of the retail workforce, whilst also ensuring that the necessary legal and compliance requirements are met consistently. Talent acquisition and retention are key to ensuring success across any business, but with increasing competition in the retail industry, proactive strategies should be implemented to attract and retain skilled staff.   

Training and development is important to ensure that employees are kept up to date on HR trends in the retail industry and new technologies, whilst also providing them with the necessary skills to carry out their jobs effectively and access career progression opportunities. Compensation and benefits play an important role in motivating employees and ensuring that their work is adequately rewarded. Finally, regulatory compliance is critical for protecting retail businesses and their employees, and companies must ensure they adhere to all relevant regulations. 

For a comprehensive approach to addressing these retail HR challenges through strategic technology implementation, explore our actionable guide to navigating HR tech challenges, covering modernising operations, effective recruitment tactics, and strategic workforce planning across retail, manufacturing and hospitality sectors. You can also learn more about our HR software for retail. Also, check out a Customer Success Story like Cineworld to see how they’ve integrated PeopleXD Evo to improve their productivity and processes.