New Zealand retailers employ around 209,000 people, representing about 10 percent of the country’s total workforce. It’s an industry offering diverse opportunities that include everything from visual merchandising to executive management, but for years, it’s battled a perception that a career in retail isn’t a real career.At the same time, retailers are increasingly turning to casual contracts to fill gaps in their rosters. Are these two issues interlinked? With support from Frontline Retail, the NZ Retail team investigated.
New Zealand retailers employ around 209,000 people, representing about 10 percent of the country’s total workforce. It’s an industry offering diverse opportunities that include everything from visual merchandising to executive management, but for years, it’s battled a perception that a career in retail isn’t a real career.
At the same time, retailers are increasingly turning to casual contracts to fill gaps in their rosters. Are these two issues interlinked? With support from Frontline Retail, the NZ Retail team investigated.
Scratch a retail executive and, chances are, you’ll find a sales assistant or a checkout operator lurking just under the surface. After 50 years in retail, The Warehouse Group executive general manager customer support Des Flynn is now so senior that he almost transcends job titles, but he started his career in his local supermarket.
Flynn considers his knowledge of people and customer service to be the most valuable lessons he’s learned from retail. He now supports the industry’s growing professionalism through mentoring, and through his work with Massey University in building the framework of its Bachelor of Retail and Business Management degree.
Massey’s retail degree is just one of several industry initiatives established to encourage retail workers to take their careers seriously. ServiceIQ also offers on-the-job training with its New Zealand Certificate in Retail qualifications at levels two, three and four.
As New Zealand’s largest listed retailer, The Warehouse Group has shouldered some responsibility for increasing professionalism within its workforce. It supports Massey’s retail degree; opened the Sir Stephen Tindall Learning Centre at its head office in 2015 to host training courses; and offers a “career retailer” wage for staff who’ve given the company more than 5,000 hours or five years’ service.
The Warehouse Group has acknowledged that retail has an image problem. At the opening of the Sir Stephen Tindall Learning Centre, then-chief executive Mark Powell spoke of how those who wore uniforms from The Warehouse, Noel Leeming, Warehouse Stationery and other retailers were perceived as “not really in a career” and “just doing something while you’re waiting to do something else.”
“We’re well aware of the common misperception that retail is poorly paid, boring and not really a career, but we are leading our industry to change this negative and inaccurate reputation.”
Lifting retail professionalism
Frontline Retail agency owner for Wellington, Kiri Henare, says encouraging professionalism in retail means treating staff with respect.
“Businesses need to understand that staff will look after you if you look after them,” she says.
Looking after staff starts with providing a company culture that’s fun and supportive. Culture is a crucial consideration for staff applying to new roles, says Henare.
“Our candidates always want to know first before applying to a role, what is the culture like? Yes, that is correct, candidates will ask first, what is the company culture – not what is the salary!”
Henare says retailers seeking to encourage greater professionalism in their staff also need to think about the career path they’re offering their employees: “Dangle the carrot.” Employers should consider, where could that staff member go next? What could they learn? How could they be challenged further?
She says retail is affected by a perception that it’s more suitable for those seeking casual employment as at the entry level of the recruitment market, it tends to employ a lot of students seeking roles during school or university holidays.
“They only want a casual role as they intend to go back to study in the new year. They simply want a summer job. Retail is not their field of choice.”
According to Stats New Zealand’s ‘Employment relationships – permanent and temporary workers’ report of December 2016, retail employs proportionately more temporary employees than any other industry barring education and training, and agriculture, forestry and fishing. The proportion of permanent employees to temporary is still relatively high, however, with 88.2 percent of workers permanent.
The report links the prevalence of temporary roles in retail with the relative youth of the retail workforce: “Younger people are more likely to be casual workers; we found that 37.6 percent of workers in the retail trade and accommodation industry were aged 15-24 years.”
Falling into a retail career
Frontline Retail agency manager for Auckland, Samantha Martch, says some young people accept retail roles to secure an income while they study, or to buy time while they consider which career they want to pursue.
However, she says some of these staff end up sticking with their retail roles and turning them into a career. The owner and operator of Victoria Park New World, Jason Witehira, entered grocery direct from school, joining the produce department at his local New World in Rotorua as a 16-year-old before working his way up.
Witehira was the winner of the Outstanding Māori Business Leaders Award in 2016. Foodstuffs North Island Ltd CEO, Chris Quin, then commented that the company was thrilled to see one of its members honoured in such a way.
“Once again we see someone who has started their career in a supermarket being recognised as a leader not only within our organisation, but in the wider business community, and for New Zealand’s future.”
“He really is a true inspiration to all our hard working staff, and lives the purpose of making sure New Zealanders get more out of life,” says Quin.
Martch says the top three reasons why young people choose retail as a career are: its range of opportunities; the possibility of career progression from low-level sales roles through to management; and the ability to gain skills which are transferrable across different sectors.
The gig economy
Overseas, retailers like Amazon and UK chain Sports Direct have been criticised for their reliance on casual labour. More than 80 percent of Sports Direct’s staff were on zero-hours contracts during 2015, and an undercover media investigation found that temporary workers at its depots were effectively receiving hourly rates of pay below the minimum wage. The retailer’s board has since pledged to ensure staff are treated with dignity and respect.
Zero-hour contracts free the employer from any obligation to provide minimum working hours while requiring the staff member to be “on call” for work. They provide huge flexibility, but have been described as controversial for their potential to enable worker exploitation.
In the same year Sports Direct’s labour practices were under the spotlight, New Zealand retailers’ use of zero-hour contracts also came under intense public scrutiny. McDonald’s New Zealand, Hell Pizza and Restaurant Brands abandoned these contracts after union pressure, and following a law change which came into effect from April 1, 2016, they’re now illegal.
In effect, the new legislation requires employers to guarantee workers some hours. It also makes sure workers required to make themselves available for work are compensated for this.
“I know that people are talking about the effects of global casualisation – however I don’t believe that New Zealand has been affected by this yet,” says Martch. “I sincerely haven’t seen this in Auckland and not in middle management roles. Casuals pertain more to entry-level roles.”
She says casualisation in New Zealand has been more about the rise of part-time jobs and hours than ‘Gig economy’-style short-term contracts, zero-hour agreements or freelance work.
Frontline Retail South Island agency delegate Chantelle Waite confirms she has seen greater demand from employers for casual and part-time recruitment roles recently. Over the last six months, she’s noticed a switch from fixed full-time roles to part-time casual roles: “For example, when a full-time person leaves, that role is often relisted as a part-time role.”
In Waite’s territory, which covers the South Island and lower North Island, Christchurch has seen the greatest shift towards these casual roles.
She says hiring more part-time and casual staff increases an employer’s head count, giving them more flexibility to cover the ups and downs of retail seasonality.
“In retail, you’ve got peaks and you’ve definitely got quiet periods,” Waite says. “If you’ve employed all full-time people, it’s hard to allow for them in your wage costings versus what the sales results are saying.”
Martch says the kinds of retailers which require casual staff tend to be large, fast-paced fashion retailers which need flexible rosters. Waite agrees, saying fast fashion retailers with high foot traffic are at the forefront of this increased demand for casual staff, but trade retail such as lighting stores are also making the shift.
“There’s been a definite change.”
A fast fashion client Waite works with has had to assess its roster because, she says, it had had problems with full-time junior staff aged 16-25 calling in sick. After it moved towards offering three or four days per week for all non-management staff, the frequency of sick leave dropped.
“They get a lot more performance out of their team by giving them more flexibility.”
For candidates, Martch says increased flexibility has particular advantages for those who may not be in a position to shoulder the responsibilities of a full-time role. Parents who’ve left full-time jobs to care for young families often look for part-time work, she says.
There are clear disadvantages for staff, too – Stats New Zealand’s report says casual employees have lower median hourly and weekly earnings than staff in any other kind of employment relationship. It explains that this is due to retail’s dominance in this area: “The lower earnings reflect that more casual workers were aged 15-24 years and working in the retail trade and accommodation industry. People in these groups tend to earn less than others.”
Martch says flexible roles offer candidates less certainty of hours and income. This is confirmed by Stats New Zealand’s report, which says 68.4 percent of casuals across the New Zealand labour market work fewer than 30 hours per week. Waite adds that it’s likely employers initiating a greater emphasis on casual roles would see more turnover as staff consider the increased job security of full-time roles to be more appealing.
This effect can be mitigated if the employer makes an effort to shows staff the opportunities which lie beyond entry-level casual roles, Waite says.
Martch links the rise of retailers offering casual or part-time roles to tougher times for retail businesses: “Overall, as an economy gets stronger and good staff are hard to find, there are more full-time jobs. When an economy gets weaker, more jobs are part-time and there’s a move to casual positions.”
Progressing from casual to permanent
As all senior retailers know, the industry needs more than entry-level summer jobs and “Christmas casuals” to stay in business. Most of the recruiting work Kiri Henare’s team carries out in Wellington is still around filling permanent, full-time management roles, and these offer exciting career opportunities for talented candidates.
She points out that in her Wellington catchment, many casual staff employed in the lead-up to December’s intensely busy trading periods go on to be offered a permanent role in the new year.
Tania Greig, Frontline Executive Retail agency owner for Auckland, agrees. She says it’s common for executive candidates taking on year-long maternity cover contracts to be offered a permanent position at the end: “If they’re really good, they often keep them on.”
The top 12 reasons school-leavers choose retail.
Range of opportunities.
Skills gained are transferable across sectors.
Constant learning and development.
Interacting with all walks of life, meeting people.
Understanding trends and people’s choices.
Fast paced environment which keeps you challenged.
Benefits such as staff discounts, incentives.
Learn people skills.
Learn selling skills.
Learn to cope with pressure.
Become deeply invested and passionate about retail.