Survey also Shows Virtually all Retailers Report Difficulty in Hiring Overall
LOS ANGELES, May 19, 2021 – Amid the increase in awareness on the issues of diversity, equity and inclusion (DE&I) during the past year, a new Korn Ferry (NYSE: KFY) survey finds a small number of retailers are beginning to include DE&I incentive metrics in their compensation plans.
Of the more than 50 major U.S. retailers surveyed, only 9 percent say DE&I metrics are included as part of their compensation packages, and a mere 3 percent say they include environmental, social and governance (ESG) metrics that are not focused on DE&I. However, almost no retailers used these metrics just two years ago.
“Retail consumers are incredibly diverse, with buying power that equates to trillions of dollars. It is critical that companies recognize this and consider linking executive compensation to performance metrics that go beyond traditional measures of profit and shareholder value,” said Korn Ferry Senior Client Partner and retail expert Craig Rowley. “New metrics tied to diversity and inclusion and related ESG priorities better reflect emerging priorities for their customers and the world around them.”
Hiring in general continues to be a pain point for retailers. Nearly all (94 percent) say they are having difficulty filling vacant roles, with 32 percent saying they are facing significant challenges. Nearly a third (32 percent) say they have implemented a referral program to help in hiring, and 29 percent say they are offering sign-on bonuses.
“Retail hiring is intensely competitive today, and to win the war for talent, companies must create a positive employer brand that is genuine and consistent for all employees,” said Rowley. “Right now in the U.S. there are an inordinate amount of job openings overall, so retailers have to be creative in how they attract and retain talent.”
Despite the issues facing the retail industry, there is bright news. Eighty percent of respondents say they expect a rise in sales in 2021 and nearly two-thirds (62 percent) believe fall sales will be higher than spring sales.
“We’re turning the corner and retailers are no doubt very anxious to put this difficult period behind them,” said Rowley.
Does your company have ESG metrics in its incentive plan?
Yes 9 percent
No but considering for future 38 percent
No 53 percent
Does your company have ESG (excluding DE&I metrics) in its incentive plan?
Yes 3 percent
No but considering for the future 28 percent
No 69 percent
What is your anticipated sales growth for 2021?
Up 10 percent or more 16 percent
Up 5-9 percent 29 percent
Up 3-4 percent 22 percent
Up 1-2 percent 13 percent
Flat 7 percent
Down 1-2 percent 5 percent
Down 3-4 percent 4 percent
Down 5-9 percent 1 percent
Down 10 percent or more 2 percent
What is your forecast for fall performance?
Significantly worse than spring 2 percent
Somewhat worse than spring 9 percent
Similar to spring 27 percent
Somewhat higher than spring 50 percent
Significantly higher than spring 12 percent
Are you having trouble hiring store employees?
Yes, significant challenges 32 percent
Yes, moderate challenges 29 percent
Yes, minor challenges 32 percent
No 6 percent
Are you doing anything new or different to attract and retain store employees?
No, not having trouble 6 percent
No, have challenges but not taking actions 44 percent
Yes, special incentive plans 21 percent
Yes, sign-on bonuses 29 percent
Yes, increase raise frequency 9 percent
Yes, referral programs 32 percent
About the survey
The Korn Ferry survey of more than 50 major U.S. retailers, with annual revenues between $50 million to more than $20 billion, took place in Late April 2021.
About Korn Ferry
Korn Ferry is a global organizational consulting firm. We work with our clients to design optimal organization structures, roles, and responsibilities. We help them hire the right people and advise them on how to reward and motivate their workforce while developing professionals as they navigate and advance their careers.