Labor Relations Consulting in the Retail Industry

As the retail industry experiences intensifying unionization efforts, labor relations consulting in retail is becoming critical to developing positive employee relations. The last 2.5 years have accelerated the evolution of today’s retail workforce more than any time period before. From the pandemic to a multigeneration workforce to the amplification of employee voice and interest in having a “say” at work, employee relations across the US have changed dramatically.   

However, the speed of the evolution of employee relations (ER) teams within retail have likely not evolved nearly as fast. The result is today’s ER strategies are prone to contain stale and increasing elements of disconnect from today’s workforce. The result is varying degrees of ineffective strategies, playbooks, and approaches in how to communicate, coach supervisors, and respond to inquiries from employees our third-party organizations, including labor unions. Business as usual is not an option anymore and especially for any business that wants to avoid unionization. The following sections discuss some of the common labor relations issues in retail and how labor relations consulting in retail helps clients. 

Common Labor Relations Issues in Retail 

The COVID-19 pandemic certainly brought the important roles that retail employees play in everyone’s lives, in terms of meeting a variety of needs, to everyone’s attention. Looking ahead, employers are now contending with a wide variety of converging labor relations issues, some of which were added to the list due to the pandemic, like Covid-19 vaccination policies. Some of the issues are related to a change in administration at the White House and others are related to global labor forces. There are also employee related challenges that are the result of employees feeling empowered to personally bring change in the workplace through a coordinated effort.  

Following are common labor relations issues in retail that retail employers are facing now or will face in the near future. 

COVID-19 Vaccination Polices

Though COVID-19 appears to be waning, it has left the issue behind as to whether retail employers should require employees to be vaccinated. Looking at the big picture over time, there will be future viruses to contend with, so the corporate vaccination policy sets the stage for the long-term. Will you make vaccinations mandatory? If not mandatory, will you require regular virus testing or provide incentives to employees to get vaccinated? What is the policy should employees refuse to get a mandatory vaccination? The vaccination policy is closely tied to workforce safety issues. What if coworkers refuse to work with someone who won’t get vaccinated? These are the types of questions to address.  

Pro-Union White House

IRI has discussed the likely impacts of a pro-union administration in the White House which are taking shape already. The White House Task Force on Worker Organizing & Empowerment issued a report that clearly is intended to promote labor unions across industries. The National Labor Relations Board is now a Democratic majority with a pro-union (NLRB calls it pro-worker) General Counsel. The NLRB is already making it easier for workers to unionize and is making decisions that are decidedly pro-union.   

General Counsel Abruzzo issued a multi-page memo (GC 21-04) that outlines her intent of overturning pro-employer NLRB decisions made in the Trump administration and changing long-term NLRB polices she sees as anti-union. For example, as recently as April 7, 2022, Abruzzo released memo GC 22-04 that recommends the NLRB support employees who do not want to attend captive audience meetings, thus depriving employers of their only chance to have face-to-face opportunities to share the organization’s perspective on unionizing. The rapid pace of NLRB changes is making it more difficult for organizations to stay union-free. 

Increasing Number of Retail Workers Seeking to Unionize

A statement in The Guardian sums up the trend in the retail industry. “…workers are seeking to capitalize on a surging energy in the US labor movement after recent union victories at dozens of Starbucks stores and the first Amazon warehouse in the US.” Virginia Target workers recently filed a petition to unionize. Apple workers in multiple stores across the U.S. have filed union petitions or plan on filing them. Workers at the REI Co-Op in Manhattan voted to join the Retail, Wholesale and Department Store Union. These are just a few examples of the increasing unionization of retail workers in companies that have remained union free until recently.  

The courage and “rising up” we are seeing across many workplaces, and certainly in retail, are a call to action for Employee Relations (ER), Human Resources (HR), and Labor Relations (LR) professionals to examine internal listening systems, develop means for employees to engage in workplace decisions that impact them, and retool front-line leadership in connecting and leading in today’s complex working environment. 

Compliance with Changing Employment Laws

The pandemic set off a slew of new issues that could lead to changing employment laws. For example, mandatory vaccine requirements may conflict with some people’s need for a medical or religious accommodation, an issue that governments must address. In addition, paid leave policies will need updating with the current trend at the state level being an increase in the amount of paid leave allowed. A good example occurred in November 2021 when New York passed legislation (effective January 1, 2023) that broadened paid family leave to include siblings. 

Another issue is the balancing of the employer’s need to monitor the productivity of remote workers with the privacy rights of employees. Yet another issue is the trend of giving mental health days, creating questions as to how they are counted and compensated. Related to the growing interest in the retail industry in unionizing is hourly pay and scheduling. Many retail employers have already raised wages to $15 an hour, but the federal government has not yet increased the minimum wage above $7.50 an hour. Should the government do so, there will be worker pressure to pay more than minimum, potentially pushing wage rates to the $20 per hour or forcing retail employers to play catch-up with current employee pay. 

Changing employment laws are at the federal, state, and local levels which makes it difficult for employers to stay on top of them. Some of the areas that are under review include scheduling, workloads, overtime pay, pay equity, and paid leave.  

Labor Shortage

Almost every retail business has a “help wanted” sign on their door. Per the U.S. Bureau of Labor Statistics, the U.S. remains the Resignation Nation with 4.5 million quits and 11.5 million job openings in March 2022. For the retail trade industry, there were 719,000 quits in March 2022 or 4.5 percent of the total employment population left their jobs. For all industries, it was 3 percent. The retail trade hires was 971,000 but the job openings were 1,294,000.   

The new signs appearing are saying, “Business closed due to labor shortage.” In March 2022, Nudge launched The Deskless Report: Retail Edition which found that frontline retail workers experience a high level of discontent due to a lack of feedback, communication, and engagement. Thirty-seven (37) percent don’t feel heard by their employers and 59 percent said organizational communications is not useful.  

The challenge for retail employers is to improve feedback and communications systems and increase the level of leadership training in employee engagement. They also need to develop strategies for attracting and retaining employees. There are many ways to do so, including adding reward and recognition programs, offering scheduling that supports work-life balance and guaranteed hours, and increasing salary and benefits.   

Trader Joe’s offers flexible work schedules and generous benefits that include retirement plans, and competitive pay. Trader Joe’s also has a positive work culture in which employees feel like their employers care about them. Discount Tire also offers competitive pay plus regular raises and bonuses, 401(k) matching, tuition reimbursement, dental insurance, a retirement plan, health and disability insurance, employee discounts, and flexible scheduling.   

labor relations consulting in retail

Adding Equity to Diversity and Inclusion

Most retail industry employers have diversity & inclusion (D&I) policies, but they don’t include equity (DEI). D&I addresses access to job opportunities by reducing talent management system biases unrelated to job performance and authentic inclusion once hired. It doesn’t necessarily include proactively reaching out to marginalized communities, closing pay gaps and closing career path inequalities. Equity promotes treating all people fairly and giving them access to the same opportunities that white job candidates and employees enjoy.  

In addition, the Bostock v. Clayton County, Georgia Supreme Court decision added sexual orientation and gender identity to the people who employers may not discriminate against. All of this means employers need training and development on DEI principles and on developing a positive inclusive organizational culture. The organization needs to review everything from employee handbook language to facilities to signage to ensure inclusivity.   

Creating a Sense of Shared Purpose in Employees

Employees want to believe their work matters. Retail workers don’t want to show up for work and feel like they just need to get through the work shift. Yet, that is exactly how many feel because they don’t believe their employer really believes they are essential to business success nor cares about their personal lives. A study at Northwestern University found that a business that is purpose-driven improves the work experience because employees perceive the purpose as giving meaning to their work. It is the essence of shared purpose. A purpose driven business is imperative today as younger generations of employees expect employers to make positive contributions to society, and those are the companies to which they are drawn.  


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Enhancing Human Resources’ Role

The Human Resources role will continue to evolve as a business partner critical to strategic workforce planning. Gartner describes the HR transformation as “the evolution of the HR function such that service deliver, talent, and technology are seamlessly adapted and integrated into HR strategy to create business value – by driving both operational excellence and strategic impact.”   

HR will proactively need to lead the transformation of the workforce to meet the needs of the organization in terms of ensuring employees have resources needed to achieve maximum productivity, training opportunities for upskilling and reskilling as technologies change, health and safety needs met, and talent management systems in place that support the organization’s strategic goals and objectives. HR will also continue moving towards utilizing technologies to improve the employee communication experience from the HR perspective, deliver data-driven decision-support to leaders, enhance DEI efforts, and manage ever-changing legal requirements. Administrative duties are automated as much as possible to free up the HR team’s time and allow for higher level work.    

labor relations consultant in retail industry

Why the Retail Industry Needs Labor & Employee Relations Expertise 

The retail industry’s focus on customer, omni-channel, and other operational innovations to compete with the rapid evolution of how consumers engage, has resulted in justified focus on managing change, implementation of new processes, a flood of technology installations, and consumption of a significant amount of time of front-line retail and supply chain supervisors and managers.  

At the same time, the workforce has too been in a state of evolution and crisis (pandemic, staffing shortages, etc.) where the capacity of frontline leaders has not been adequate to keep pace with the overall needs of the employees. Frontline training and employee engagement have both trended downward due to a number of factors that overloaded the retail ecosystems in which employees work.  It’s time to get back to the basics and to invest heavily in the employee experience, which requires employee relations and labor relations expertise to change course and right the ship.  

Labor Relations Consulting in Retail  

Changing course is not easy, especially if there is not a labor relations specialist on staff. Especially when frontline supervisors are already overloaded with work and turnover in retail is high. Yet, unless retail enterprises change course, they will find their businesses unionized at the least and unable to remain in business at the worst due to position vacancies and high employee turnover. The need for labor relations consulting in retail is imperative because consultants provide the impetus and means for change by providing advice on critical issues like labor policies, union vulnerability, employee engagement, employee relations, and organizational culture development, to name a few. A labor relations consultant considers the employee experience from an objective viewpoint and guides organizations in identifying and addressing manager and supervisor training needs.  

How IRI Consultants Helps Our Retail Clients

The IRI Labor Relations Readiness System was developed as an efficient systematic approach to identifying and addressing potential employee relations vulnerabilities. Even as this material is read, the retail industry continues to unionize. On May 26, 2022, a Birmingham Starbucks voted for a union, the first Starbucks in the state of Alabama to unionize. The trend towards unionization in the retail industry is clear. Following are the six steps in the Labor Relations Readiness System and a brief description of each. 

Plan

Building an Intentional, Comprehensive Labor Plan - The planning stage prepares the organization for changing course to become proactive in developing labor relations goals and how to meet them. 

Educate

Make Sure Everyone Understands the Value of a Direct Relationship Labor relations education applies to all levels of management, from the CEO to the frontline supervisors. Training leaders in labor relations in the retail industry is crucial to ensuring the organization does not make missteps that lead to unionization and charges of unfair labor practices (ULPs). This training is established in a way that ensures it stays current through the many employment law and NLRB changes.  

Assess Vulnerabilities:

Identify Gaps – What are your organization’s weaknesses and leadership gaps? A union vulnerability assessment can identify those gaps and provide the direction as to the steps to take to close the gaps, whether it’s the employee communication system, organizational culture, or leadership knowledge.   

Communicate

Focus on Employer Brand & Storytelling – Communicating the employer brand and purpose is key to developing positive employee relations. Communication can take many forms. Labor relations consulting in retail will consider the best strategies for reaching all employees, including using digital communication systems and face-to-face dialogue.  

Develop Leaders

Upskill & Train Leaders Developing leaders in areas like developing positive employee relations is important to staying union free. This training addresses areas such as actionable union avoidance, leaders as coaches, employee recognition, employee-employer communication, emotional intelligence, reinforcing organizational values, and more. The specific training needed depends on the leadership vulnerabilities identified. Do you have a certified labor relations specialist on board? If not, there are many reasons why you should.  

Engage Employees

Maintaining Positive Employee Relations – At this stage, the organizational leaders are ready to implement employee engagement strategies and understand how to keep the workforce engaged. Engaged employees don’t want to join a union because there is no need to do so. Employees have a direct connection to management which is appreciated and valued. 

consulting work in retail

Our Client Work in The Retail Industry 

A grocery retailer in the Northeast looked to IRI for labor relations consulting in order to update outdated messaging around maintaining a direct relationship with team members. With a fresh perspective and approach, their labor relations consultants were able to address this topic as a natural part of communicating the company’s culture during the onboarding process. With the careful analysis of messaging, and the addition of video, eLearning and refreshing the company’s employee-facing website, IRI provided the exact update this retail company needed. 

For a pet products retailer, IRI provided insight into addressing employee concerns, as well as helping close the gap on employee communications. With a positive outlook and a focus on the future, their IRI labor relations consultant provided precisely what the company needed to ensure they were taking the best care of their team members and their relationship with them.  

When a large clothing retailer needed support to train their leaders, IRI consultants provided not only the specific training, but delivered it via video, interactive elements, and online resources to ensure that training was not only powerful and memorable but consistent across time and geography. For this retailer, their labor relations consultants represented a huge leap in their ability to create great leaders within the organization to help propel the company forward.  

Steps Retail Employers Can Take Now  

  • Reinvesting in strong employee relations with more robust engagement and sophisticated communications that tell the story of why your organization is a great employer 
  • Updating your policies and labor relations playbooks to ensure you are current with regulations and have the right team in place to handle any labor situation 
  • Evaluating compensation to remain competitive in the market with an eye toward a potential increase in the federal minimum wage (employers are already moving to $15 an hour) 
  • Evaluating benefits to remain competitive in the market with a focus on how they support employee needs holistically 
  • Evaluating scheduling policies to identify whether they are fair and consider the employee’s personal and work needs 
  • Strengthening the direct working relationships you have today with employees so they fully understand the value of maintaining those relationships instead of bringing in third-party unions 
  • Reviewing the organization’s vision and mission and how the organization communicates the sense of purpose 

Labor Relations Consulting in Retail Helps Retail Organizations Change Course 

The retail industry is in upheaval as it faces so many forces of change. Unionization is not inevitable though. The retail organizations that show a sincere and transparent effort to improve the employee experience and become an employer of choice are the ones that will thrive as union-free companies. IRI labor relations consulting in retail helps organizations maneuver through the tidal wave of challenges and come out prepared to move into a more secure future.  

About the Author Jennifer Orechwa

With over 25 years in the industry, and now as IRI's Director of Business Development, Jennifer has gained a unique perspective on what it takes to build a culture of engagement. By blending a deep understanding of labor and employee relations with powerful digital marketing knowledge, Jennifer has helped thousands of companies achieve behavioral change at a cultural level.

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