COVID-19’s Impact on Retail Store Associates
As major events and policies unfold daily, COVID-19 has left retailers rapidly responding to real-time changes. But in companies’ efforts to act as swiftly and strategically as possible in the wake of the pandemic, hourly workers have been severely impacted.
To better understand and help hourly employees, our team conducted a study to see how the coronavirus has impacted their work lives. Here are a few of the key findings retailers should keep in mind.
Reduced Hours Across Industries, Including Retail
Among retail hourly employees, about 56 percent have experienced a reduction in hours, including fewer hours, unpaid leave, and job loss. This is likely because 68 percent of the retailers these employees work for have either temporarily shut down operations or reduced their operating hours in response to the pandemic. One silver lining is that retail employees were more likely to pick up hours compared to other industries, given certain types of retailers have remained open as essential services. Following healthcare (24 percent), retail was the second highest sector (15 percent) for hourly employees to pick up more hours than they would prior to COVID-19. With essential retail sectors like grocery stores, convenience stores, distribution centers, and pharmacies ramping up their hiring, employees whose stores have been shut down may turn to these opportunities.
Limited Financial Assistance
Given the precarious circumstances for many retailers, only 14 percent of retail employees surveyed received any sort of financial assistance from their employers. Top forms of financial assistance include paid shutdown leave (50 percent), paid sick leave (35 percent), emergency fund (13 percent), and bonus pay (6 percent). The combination of little to no financial assistance and limited emergency savings have left retail employees’ financial health even more fragile. Even with the prospects of new positions in a wave of hiring, these fluctuations in pay greatly impact their ability to plan or meet their regular and unexpected financial needs.
Shifting Financial Concerns
COVID-19 has also impacted retail employees’ top financial concerns. While retail employees have typically cited home/rent affordability as their top concern, we found that retail respondents have been more concerned about affording even shorter-term expenses like groceries (89 percent) and utility bills (82 percent). Hourly employees, who are known to live paycheck to paycheck, are under greater duress just to meet day-to-day needs.
What Retailers Can Do
Retailers are confronting a slew of problems, but it’s important for them to not forget about their hourly employees. Even since this survey was conducted in mid-March, circumstances have intensified for hourly employees and their employers. While not all retailers have the cash flow to provide additional financial assistance or paid leave, there are actions retailers can take at little to no cost. Something as simple as offering employees informational resources on unemployment insurance or financial wellness resources that can assist them through this difficult time can demonstrate that your business is still engaged and supporting its employees. There are also free benefits available like fee-free financial services or early access to earned wages. During times when fewer working hours are available, employees are able to speed up their cash flow without changing the employer's cash flow. Therefore, retailers can put money into employees’ hands faster, while preserving their own cash.
As hourly workers for essential services reinforce, retail employees play a pivotal role in keeping stores humming, customers engaged, and sales growing. The pandemic has also taught us how much front-line employees expose themselves to risk to keep retail services going. Hourly employees will remain an essential arm for navigating these challenges during and after the pandemic.
Atif Siddiqi is the founder and CEO of Branch, the challenger bank that partners with employers to help working Americans grow financially.
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