Michael Baker
Smarter Writer

Michael Baker is a retail consultant and vice-chair of the ICSC's Asia-Pacific Research Council

Michael Baker
Smarter Writer

Michael Baker is a retail consultant and vice-chair of the ICSC's Asia-Pacific Research Council

According to a ranking published by 24/7 Wall Street, a US financial news / commentary site, they are absolutely at the bottom of the corporate heap as far as their current and ex-employees are concerned. Is this a US only phenomenon or is the same true in Australia?

The basis for 24/7 Wall Street’s damning conclusion about US retailers is a review of thousands of evaluations by employees of the companies they work for, or have worked for, published on a site called Glassdoor.com. A primary function of Glassdoor.com is to provide a forum for job postings and to give prospective candidates direct insight into things they might want to know about companies before they take the plunge, such as salary levels, working conditions, ease of promotion, and corporate culture.

After scouring Glassdoor.com for the third year running, 24/7 Wall Street’s ranking of the worst companies to work for puts no fewer than seven retailers in the least desirable of 11 companies.

jeans on a rack

Retail - the good, the bad, and the ugly

Coming in top of the list – or bottom depending on your point of view – was book store chain Books-A-Million, which operates approximately 250 stores across the US and cops an average rating of two out of a possible five stars. True, it’s not easy being in the book superstore business these days, but Books-A-Million seems to be making more a mess of it than others. It is being criticised by employees for low wages, harsh working conditions, and over-the-top pressure to sign up members for the company’s loyalty program. Only 17 per cent of its employees recommend it.

Also among the worst ranking retailers were men’s clothier, Jos. A. Bank, recommended by only 24 per cent of its employees, Dillard’s, a national department store chain currently recommended by just 28 per cent of its employees, Hhgregg, a consumer electronics chain (28 per cent), discount chain Family Dollar (28 per cent), children’s clothier Children’s Place (27 per cent) and another consumer electronics chain, RadioShack (24 per cent).

What is a little bit disconcerting about this list is the variety of retail categories involved – clothing, electronics, department stores and so on; the problems don’t seem to be restricted to just one or two categories that have big headwinds.

Are Australian retailers any better in terms of employee satisfaction?

The answer is probably ‘yes’, perhaps largely because of stronger regulations governing working conditions and pay, and the lower pressure that comes with no commission-based selling, which is common in the US.

Even despite such regulation-bestowed advantages, the relatively few reviews of Australian retail chains posted on Glassdoor.com indicate that they don’t exactly set the world on fire with their employees.

Myer gets an average of 3.2 stars from 21 reviews, with just over half of the reviewers saying they would recommend the company to a friend. Its department store competitor David Jones gets 2.9 stars from 33 reviews, with 50 per cent saying they would recommend it.

But specialty clothing retailer Cotton On comes in for a lot of stick. It rates an average of only 2.3 stars from 114 reviews, and only 32 per cent of employees recommend it, putting it dangerously close to the level of the seven US-based retailers that made the worst of the worst.

Coles and Woolworths get a better rap: 78 per cent of its employees would recommend Coles while 77 per cent recommend Woolworths. In both cases the CEOs get overwhelmingly strong approval ratings from their employees.

Why do some retailers do better than others?

So what raises Coles and Woolworths a bit above the rest? Both score highly in two areas that are retailer-driven rather than being dictated by the regulator: culture and values, and career opportunities. No amount of government writ can instil positive values into a retailer – that has to come from the retailer’s top brass. If it is, then the retailer typically does well because its employees become brand ambassadors.

Apple, Starbucks and Costco are good examples of companies that are well known to Australians, have strong corporate values, and invest in their employees, which translates to a positive customer experience. Each of these companies score highly on Glassdoor.com.

Verdict

On the flipside of the coin, employees at many retailers feel like they are just part of a big machine that chews them up and spits them out. It doesn’t take long for their attitude to rub off on the customers.

This is one of the paradoxes of Australian retail: well-paid employees working under highly regulated conditions, and yet delivering a store experience so mediocre that travelling Australians are often gobsmacked by how much more fun it is to shop overseas.

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