AI, upskilling, and mentorship: Building a future-ready workforce in retail

For an industry already plagued by high employee turnover, the COVID-19 pandemic was an existential reckoning for retailers. Store closures, overburdened staff, and a volatile job market created a perfect storm, forcing HR departments to reimagine their strategies for both retention and future resilience. But an unlikely silver lining has emerged in the years since. Retailers are prioritizing investments in their workers through skilling and training to not only stem the tide of attrition but to forge meaningful career pathways for employees. 

In this conversation with Joe Keenan, editor-in-chief of Total Retail, we explore the rise of AI in retail and how the retail industry is rewriting its talent playbook to drive greater employee engagement and retention, skill-building, and internal mobility to transcend the stigma of retail being “just a job.”

Q: What are the major workforce challenges facing retailers on the heels of the Covid-19 pandemic? And what will the next year bring?

Retail has long been challenged by high turnover rates — the whole workforce, staff at the store, associates, and distribution centers. So, there’s been a greater focus on employee retention, and retailers are doing that in a couple different ways. Obviously, the more you pay somebody, the more likely they are to stay. So wage increases are one way.

For the first time, AI was the No. 1 technology that retailers are investing in and using, according to Total Retail’s 2024 Retail Technology Report.

And then there are employee benefits. These have become particularly important to hourly retail workers at stores and distribution centers. [Retail companies] are upskilling them to help them take that next step in their career. Maybe they’re a store associate now, but the next level is a store manager, and then they want to be a district manager. And so the key has been investing in that employee, giving them an education, and showing them ‘This is your path.’ Because I think a lot of them don’t realize the opportunity they could have.

Q: Have retailers been successful at investing in the skills of their existing workforces versus hiring for new skillsets?

Training and upskilling are being baked into budgets now. Organizations are carving that out because they recognize the importance of employee retention. There are a lot of soft skills in terms of just simply being friendly, smiling, welcoming people in a retail setting. And then there are obviously some things that are specific to the individual business. You have to know the product, right? You have to know your policies. You have to know return policies. You have to know inventory. [Organizations] are using technology to upskill again, getting the store associate up to speed so that they’re able to answer questions — the store associate needs to have that real-time product knowledge. 

Q: What have you seen as far as investment in training and education for AI? Are retailers doing anything to help their employees adjust to any AI initiatives they’re putting in place? 

There’s AI in so many different things [in retail] that there is an understanding of the technology within their workforces that’s perhaps greater than many people would think. That said, there certainly needs to be training on store-specific systems and retail-specific systems — a good example would be customer-service teams for a retail organization, like a call center. [Companies] are using the technology to automate a lot of the simple where-is-my-order-type questions, and then they’re able to handle the higher value, higher complexity calls.They’re able to be more helpful to the employee, and they’re freed up to take on some of those higher-leverage phone calls and customer interactions.

Retailers should be thinking about carving out budget for training specifically around AI because it’s really ubiquitous across the organizations. It’s not just customer service; it’s inventory. It’s marketing. It’s merchandising. It’s store operations. We recently released our 2024 Retail Technology Report, and one of the questions was “What are the specific technologies that you are currently invested in and currently using?” And for the first time — and I don’t think this is going to change going forward — AI was the No. 1 technology that retailers are investing in and using.

Q: What do you think retail HR departments should do now to build a skilled team to take them into the next five years or even 10 years?

Investing in training programs like technology training, but also mentorship programs as well, where more senior staff are paired up and working with junior staff. That could happen in a structured environment. But that can also happen more organically, too, by just promoting the fact, like, ‘Hey, we’re thinking about your teams and mentorship.’ 

Happier employees should tend to be better employees, right?  Wages, benefits, training, and education are key components to creating that better-skilled workforce. And then going out and identifying what you’re looking for in terms of new-hire acquisition. What are the skills that make sense for your business, for the role you’re hiring? So having clear definitions around your hiring guidelines will help ensure that your people excel in the role that you’re hiring them for. It will also increase the likelihood that they will stay around and think about it as a career, not just a temporary job.

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