Introduction
The retail industry is undergoing a profound transformation, with HR teams playing a pivotal role in shaping company success and the future workforce. This report, based on insights from 1,000 HR leaders in the retail sector, examines the top pain points, innovative solutions, and strategic priorities driving retail HR’s evolution.
From addressing high turnover rates and labor shortages to leveraging digital transformation for talent acquisition and employee engagement, retail HR leaders are redefining their roles to increase efficiency, scalability, and ROI.
Keep reading to learn how these leaders are tackling the complexities of modern retail to build resilient, future-ready HR functions.
4 Insights for the future of HR and talent acquisition in retail
Insight 1
Quality of hire and employee experience take center stage in 2025
As the retail industry evolves, HR leaders are prioritizing innovation and data-driven strategies to address workforce challenges and position their teams as strategic partners in organizational success.
Key HR performance indicators for retail leaders
Today’s retail HR leaders are focused on metrics that drive tangible business outcomes. Their top KPIs for the future are quality of hire, employee turnover rate, and employee engagement score, reflecting a balanced emphasis on recruitment success, workforce stability, and engagement. These metrics align closely with strategic goals to attract high-performing employees, reduce costly turnover, and foster a motivated and productive workforce.
Strategic focus areas for 2025
Looking ahead, retailers see enhancing the employee experience as their most critical priority, underscoring the importance of fostering satisfaction, engagement, and retention in a competitive labor market.
Leveraging AI for recruitment also emerged as a key focus, as technology continues to streamline hiring processes and improve decision-making. Additionally, interest in preparing for the future of work and hybrid models reflects the retail industry’s ongoing adaptation to changing workplace dynamics and employee expectations.
What is the most important question retail HR leaders should be asking as they plan for success in 2025?
Metrics for future improvement
To drive continued success, HR leaders are prioritizing improvement in metrics that directly impact talent acquisition and retention. Quality of hire was once again highlighted, this time as the most emphasized area for growth (ranked #1 by 42% of respondents), reflecting its critical role in ensuring the effectiveness of recruitment strategies.
Employee retention rate (22%) and candidate experience (12%) also rank highly, demonstrating the importance of building a stable and satisfied workforce while maintaining a seamless and positive hiring experience.
Which HR metrics do retailers think need the most improvement in 2025?
What this means for employers
- Focus on quality metrics: Prioritize quality of hire as a key performance indicator to ensure recruitment strategies are aligned with organizational goals and workforce needs.
- Leverage technology for recruitment: Adopt AI-driven tools and processes to optimize hiring efficiency, enhance decision-making, and reduce time-to-hire.
- Enhance the employee experience: Invest in initiatives that improve employee engagement and satisfaction, fostering a motivated and loyal workforce.
- Prepare for workforce evolution: Adapt to the future of work by integrating flexible models and aligning HR practices with changing employee expectations.
Insight 2
Streamlined tech and strategic tools lead retail HR, despite adoption barriers
Amid the fast-paced evolution of the retail industry, streamlined technology and strategic tools are transforming HR practices, offering a competitive edge even as adoption barriers persist.
How AI powers background checks
Automated background check data collection and AI-driven resume screening emerged as the most recommended AI solutions from HR leaders in our survey, reflecting the need for accuracy and efficiency in evaluating high volumes of candidates.
In contrast, chatbots for initial interactions and tools aimed at enhancing diversity and inclusion are the least recommended, indicating limited perceived value or effectiveness in these areas.
The takeaway: Retailers’ focus remains on AI applications that directly optimize workflows and support rapid decision-making.
Which AI-powered hiring tools are most recommended by retail HR leaders?
Roadblocks to technology adoption
Despite the potential of HR technology, retail HR leaders are facing significant barriers to adoption. For example, while 62% HR managers in a 2024 Checkr survey on background check strategies were more likely choose to partner with a vendor that offers AI tools than those who don’t, only 46% of retailers said the same.
Budget limitations currently top the list of retailers’ pain points to new tech adoption, reflecting the challenge of securing funding in an industry known for tight margins. Customizing solutions to meet specific hiring needs and resistance to new technology are also major obstacles, underscoring the importance of tailored, user-friendly tools that align with organizational goals.
Integration issues and insufficient data analytics capabilities further highlight areas where improvements are needed to leverage technology’s potential fully.
Choosing effective technology communication channels
Retail HR leaders find company websites and career pages to be the most impactful channels for communicating hiring opportunities, followed by email and text messages. These tools allow for direct and personalized outreach to candidates.
In contrast, social media and video communication are considered less effective, reflecting the importance of prioritizing channels that align with candidate expectations and preferences in the retail hiring landscape.
What do retail HR leaders say is the biggest roadblock to optimizing their tech stack?
What this means for employers
- Focus on AI solutions for efficiency: Invest in AI tools like automated retail background checks and resume screening to handle high-volume hiring with greater accuracy and speed.
- Address barriers to adoption: Secure budget allocations, prioritize customizable solutions, and look for comprehensive training programs to help you overcome resistance to new technology.
- Refine communication channels: Optimize company websites, career pages, and direct communication methods like email and text to attract and engage candidates effectively.
Insight 3
Tackling retail HR challenges: Addressing turnover, theft, and labor shortages
Innovative HR strategies are emerging as critical tools to navigate and overcome pressing industry-wide issues like shrinkage, theft, and labor shortages.
Top pain points for retail HR teams
HR leaders say high turnover rates are their most significant pain point, reflecting the industry’s ongoing struggle to retain employees in a competitive labor market.
Labor shortages and employee engagement follow, highlighting the dual need for attracting talent and maintaining a motivated, productive workforce. These challenges underscore the importance of strategies that enhance recruitment and retention while fostering a positive workplace environment.
Biggest pain points for retail HR leaders
Tackling shrinkage and theft
Reducing shrinkage and theft is a key focus for retail HR leaders this year, with 42% agreeing and 29% strongly agreeing on its importance. Top strategies for fighting theft recommended by retailers include:
- Involving employees in loss prevention efforts.
- Implementing clear consequences for theft.
- Conducting thorough and accurate background checks.
Strategic solutions for labor shortages and recruitment
To address labor shortages, offering competitive pay and benefits is cited as the most effective strategy by retailers (ranked #1 by 50% of survey respondents), emphasizing the importance of financial incentives in attracting talent. Flexible schedule arrangements and promoting a positive workplace culture were also ranked high on the list of strategies to make retail jobs more appealing.
When it comes to recruiting hourly retail employees, competitive compensation again takes precedence, followed by fast and accurate background checks and streamlined application processes. These strategies aim to attract candidates while ensuring efficient and reliable hiring processes.
What do retail HR leaders think is the most effective solution to the retail labor shortage for their organization?
What this means for employers
- Focus on retention: Address high turnover rates by improving employee engagement and fostering a workplace culture that encourages long-term commitment.
- Strengthen loss prevention strategies: Implement clear theft prevention measures, such as involving employees in prevention, enforcing consequences, and improving background check consistency and compliance.
- Prioritize competitive compensation: Offering market-leading pay and benefits is critical to addressing labor shortages and attracting hourly workers in a competitive market.
- Optimize hiring processes: Streamline application workflows and ensure fast, accurate background checks to enhance candidate experience.
Insight 4
Competitive compensation and candidate experience drive key success metrics
In the battle for talent, competitive compensation and a seamless candidate experience have become pivotal in driving employee retention and satisfaction in the retail sector.
What makes a strong employee value proposition (EVP)?
Competitive compensation stands out as the biggest draw for top candidates, according to our survey respondents, reflecting its pivotal role in attracting and retaining top talent in the competitive retail job market.
Work-life balance follows as a close second, underscoring its increasing relevance as employees seek flexibility and manageable workloads. Career development opportunities round out the top three, highlighting the importance of clear growth pathways in fostering engagement and long-term commitment among retail employees.
What employee value do retailers say has the biggest impact on winning high-quality candidates?
Strategies for reducing turnover and improving employee experience
To combat high turnover rates and enhance employee satisfaction, HR leaders emphasize the importance of competitive compensation as, once again, the most impactful strategy. Enhancing employee engagement comes in second, giving weight to initiatives like programs that foster a sense of belonging and commitment.
Flexible scheduling options that contribute to improving work-life balance and accommodating diverse employee needs, particularly in a demanding retail environment, were also ranked highly by retailers in our survey as key to reducing turnover.
Candidate experience as a strategic priority
Candidate experience is regarded as a critical component of hiring strategy, with 75% of HR leaders rating it as “important” or “very important.” This strong consensus demonstrates the industry’s recognition of the value of creating a seamless, transparent, and positive experience for job seekers.
What this means for employers
- Prioritize compensation in your EVP: Competitive pay remains the most valued proposition for both attracting and retaining talent. Investing in compensation structures that align with market demands is critical.
- Enhance candidate experience: A strong focus on candidate experience improves recruitment outcomes and strengthens employer branding, helping organizations stand out in a competitive hiring landscape.
- Implement engagement and flexibility strategies: Programs that boost employee engagement and offer flexible scheduling options can significantly reduce turnover while fostering a positive workplace environment.
The takeaway
Strategic talent acquisition and employee retention are essential for tackling retail HR challenges such as turnover and labor shortages.
Offering competitive compensation, enhancing employee experiences with engagement programs and flexible scheduling, and fostering long-term stability through career development initiatives are key strategies for success.
Retail HR teams can also align with future workforce needs by adopting flexible work models, prioritizing DEI initiatives, and using metrics like engagement scores and retention rates to continuously improve and drive organizational success.
Take the lead with faster, smoother background checks
Checkr gives retail leaders the tools they need to accelerate hiring and deliver on key strategic objectives with fast, accurate background checks and AI-enhanced workflows designed to provide the best experience for your candidates—and your team.
With Checkr, you can seamlessly integrate retail background checks with your preferred ATS and HRIS systems using one of our 100+ integrations or our flexible API. Get your top candidates to the finish line faster and reduce drop-off with a transparent, mobile-friendly background check experience for candidates.
What could you gain from better background checks? Learn more about how to level up your retail background checks, or get in touch with the Checkr team today.
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Survey methodology
All data found within this report is derived from a survey conducted by Checkr online via the survey platform Pollfish. In total, 1,000 senior HR leaders in the retail sector were surveyed. This survey was conducted in November 2024, and all respondents were asked to answer all questions as truthfully as possible and to the best of their knowledge and abilities.
Disclaimer
The resources and information provided here are for educational and informational purposes only and do not constitute legal advice. Always consult your own counsel for up-to-date legal advice and guidance related to your practices, needs, and compliance with applicable laws.
