In 2024, staffing issues and inflation both remain top challenges at convenience stores.
As retailers look to better recruitment, hiring and retention practices, they’re continuing to raise starting wages and improve benefits to best appeal to employees who are feeling squeezed by the rising cost of living.
For the 16th consecutive year, CStore Decisions and Humetrics collaborated on the Human Resources (HR) Benchmarking Survey, polling convenience store retailers from Jan. 4 to March 1 on HR practices, including recruiting, hiring, retention and economic outlook.
This year’s comprehensive 44-question survey was designed to compare, predict and estimate the most common HR issues the c-store industry is facing and how the industry is addressing those issues. Echoing the adage “the more things change, the more they stay the same,” the survey once again pinpointed staffing and inflation as the top concerns.
As the c-store sector continues to navigate through the complexities of a post-pandemic world, the survey’s insights reflect the persistent challenges of staffing and inflation and underscore the industry’s resilience and adaptability in addressing these issues head-on.
The HR survey encompassed a broad cross-section of roles, organizational sizes and operational scales. The responses were collected from corporate HR professionals (32%); general, regional or operations managers (25%); store managers and assistant store managers (21%); and owners (11%), with an additional 11% comprising various other corporate roles.
The HR survey showcased a wide range of organizational sizes, with 25% representing convenience store chains with annual revenues over $500 million, 17% from those with $50–$500 million, and a majority (54%) from companies earning between $1 million and $50 million. The survey also covered employee populations, with 32% of participating companies employing more than 500 people and a significant number (47%) housing a workforce of one to 100 employees, offering a comprehensive view of the convenience store industry’s HR practices and challenges across different scales of operation.
The survey began with the question, “How was your overall business in 2023?” with results indicating a tempered optimism. The data showed that 46% of respondents feel their business performed better than expected, while 29% reported performance as anticipated. However, a notable 18% reported “worse than expected,” which signals the ongoing economic pressures and operational challenges.
Industry Challenges
Inflation and staffing were tied at 68% as the top challenges facing c-store retailers, compared to last year’s survey where inflation rang in at 64% and staffing at 82%, which shows inflationary pressure is ticking up while staffing issues appear to be improving. Fuel cost fluctuation came in third at 46%, down from 49% last year.
The convenience store sector, grappling with the pressures of staffing and inflation, reflects broader economic trends and their impact on business operations and consumer behavior. The survey underscores staffing as a perennial challenge, with recruiting, training and retaining personnel taking center stage. The ripple effects of the COVID-19 pandemic and rising costs for essentials have complicated staffing efforts, squeezed margins and altered consumer spending patterns.
Several survey respondents talked about the impact of inflation on their consumers and, consequently, on their businesses.
- “People do not have the money to spend on impulse buys like before with the price of (everything rising).”
- “(We are seeing) lower foot traffic due to delivery options and strain on the pocketbook.”
- “The constant increase in product pricing (makes it challenging). Products are also being made cheaper; less of product in the package; packaging is even cheaper. But wages stay the same since the economy is where it is. Everything is more and more each weekly invoice.”
Staffing Challenges
C-store retailers identified hiring, recruiting and retention as the biggest staffing challenges in 2023. These issues were also predicted to be the top three HR concerns, followed by benefit costs and employee compensation.
The dynamics of turnover, employee retention and recruitment remain at the forefront of HR challenges within the convenience store industry.
2023 saw a notable shift in turnover rates among surveyed c-stores, moving towards a more evenly distributed range than in 2022. In 2022, most organizations reported turnover in the 10–50% range (63% of respondents). In 2023, there was a “flatter” distribution, with turnover being more widely distributed. It is somewhat positive that in 2023, 54% of respondent organizations reported a turnover of 50% or less. However, 47% of organizations are grappling with turnover of 50–150%.
In 2023, short-term turnover, where an employee quit or was terminated within the first 30 days, was down (28%) or stayed the same (40%), with only 25% reporting an increase.
Employee Retention
In total, voluntary employee attrition costs U.S. businesses $1 trillion every year, according to Gallup. A study by SHRM (Society for Human Resource Management) found the average turnover cost per employee is equivalent to six to nine months of an employee’s salary, while others state it could cost up to two times the employee’s annual salary.
This year, c-store retailers were asked, “What actions did you take in 2023 to tackle the problem of employee retention?”
The No. 1 answer was pay raises at 57% (down from 86% in 2023). This was followed by more flexible scheduling at 46% (down from 72% in 2023) and enhanced employee recognition programs at 39% in third place (down from 41% in 2023).
Since much attention has been given to increasing pay, the survey also asked, “If you have increased wages and are offering incentives, how have they impacted your recruiting/retention?”
The graph above depicts the responses.
It is encouraging to see that increasing pay has made recruiting a little easier. However, headwinds point to continued competition for employees from adjacent industries, as competitors look to attract the same worker pool by offering the upper limits of salary ranges.
Employee Recruiting
When polled about three essential HR functions, most respondents said they were better at recruiting and retaining than selecting employees.
The recruiting tools ranked most effective were employee referrals (68%), in-store signage (57%) and Indeed.com (46%).
The employee referral is the most economical and most productive recruiting tool. Employee referrals lead to faster hiring and better retention. Convenience store employees who are referring candidates are doing the initial screening for you. Employees refer those that they believe are high-quality candidates (someone they would like to work with). The new hire has a built-in buddy/trainer in the friend who referred them. Humetrics has found that offering a monetary incentive to employees referring friends is a very effective practice and suggests paying out over time (for example — 25% immediately on hire, 25% after 30 days and the balance after 60-90 days).
In-store signage advertises job openings to one of your best sources for candidates: your customers. Customers know your location, your store layout and products, and may know your employees. Make sure that the signs are current, clean and clear. Make it easier for applicants to apply by having applications handy or directing them to your company’s employment website.
It is no surprise that Indeed.com was ranked so high on our survey. It is the No. 1 job site in the world. There are both free and paid options for employers and job seekers. Humetrics suggested that if you haven’t tried Indeed as an employer, begin with the free version and track the number of applicants and hires that are generated.
The HR survey reported an increase in recruiting from underserved sources: 71% are working to recruit older workers, 61% are recruiting veterans and 46% are recruiting people with disabilities.
Interviewing and Selection
The survey identified the store manager as the primary interviewer and decision-maker during the hiring process. The store manager is involved in 86% of the interviewing and job-offer processes, followed by the area manager (25%) and then HR specialists (corporate HR 21%, recruiters 18%, on-site HR 11%).
It is more effective when the interviewer is the person who has to live with the consequences of the hiring decision.
Salary and Benefits
In response to inflation, respondents reported that 86% of starting wages either went up (54%) or stayed the same (32%). Only 7% reported a decrease in their company’s starting wages. Half of the respondents (50%) said starting wages increased by 0–5%, 32% said starting wages increased by 6–10% and 14% said the increase was 11–15%.
Benefits either were improved (32%) or stayed the same (64%). Most respondents reported providing full-time hourly employees with medical and paid vacation benefits (79%). Other common benefits were dental (75%) and 401(k) (68%). Incentive pay dropped from 36% to 25%, while bonuses stayed near 57% in 2022 and 54% in 2023.
Onboarding and Initial Training
The top processes for onboarding and initial training, either currently in use or planned to be added in 2024, were identified as performance reviews and formal onboarding, as well as informal employee recognition. See the graph below for more details.
Company Culture
The management consultant, educator and author Peter Drucker coined the phrase “culture eats strategy for breakfast.” A business can’t succeed with a solid strategy without a culture that inspires and motivates its staff. A successful business culture is crucial in the convenience store industry, which is traditionally marked by high employee turnover. In recognition of this fact, many c-stores are now prioritizing building a positive workplace culture as a strategic move to enhance employee retention and reduce associated costs.
The survey data reflected this shift. As noted in the graph to the right, 39% of respondents now identify their workplace culture as family-friendly, with another 36% highlighting the importance of teamwork, trust and integrity in their organizational ethos.
A positive work culture prioritizes employees’ well-being, offers support at all levels within the organization and has policies that encourage respect, trust, empathy and support. It’s one where employees feel valued, safe, comfortable and provided with growth opportunities. A positive organizational culture does not occur by accident. It takes planning, work and, ironically, strategy.
Training Matters
Training remains a vital part of employee retention. When asked, “Which of the following training tools are you now using?” some 54% of survey participants reported using online learning, up from only 29% in 2023.
Meanwhile, 82% of retailers pointed to hands-on training as their primary training method. This was followed by live classes led by a trainer, which has increased as we move away from pandemic restrictions.
Most respondents said training budgets will increase (32%) or stay the same (36%). Only 11% of respondents expected training budgets to be lower in 2024.
Technology Outlook
Retailers were asked, “Have you or do you plan to add artificial intelligence, robotics, self-checkout, or any other tools or technology in order to minimize human contact, reduce labor costs or increase efficiency?” In 2023, 57% reported they were not adding additional technology, whereas in 2024, 46% said yes.
Is Your Company A Great Place To Work?
Respondents provided these top four reasons why a “great employee” would want to work for their organization:
- Opportunities for advancement (46%)
- Family-friendly (good work-life balance) (43%)
- Great boss and co-workers (43%)
- Benefits (39%)
Are these enough to attract “great” employees? Humetrics suggested retailers go further by becoming a five-star employer.
Becoming A Five-Star Employer
Becoming a certified five-star employer demonstrates that your company invests in its people and culture, resulting in higher brand value and increased profits. It’s a virtuous cycle that repeatably delivers benefits and helps your company grow.
Over half of respondents (57%) rated their organization with four stars, while 29% gave their company five stars and 7% said three stars.
Being a five-star employer suggests you will deliver:
- Increased brand value to your customers
- Significant competitive edge in your marketplace
- Higher-caliber employees
- Higher job satisfaction from front-line employees
- Reduced employee turnover
- Public relations opportunities showcasing your best-in-class culture
- Invaluable insight into employee attitudes and ideas
- Pride in knowing you are among the elite
Becoming a five-star employer is essential for attracting top talent, retaining employees, boosting productivity and building a positive reputation for your company. It will take some internal adjustments, but once those changes have been made, you can have a transformational impact on your organization.
Being a five-star employer can help build a positive reputation for your company. Word of mouth travels fast, and employees who enjoy working for your company are likely to share their positive experiences with others. This can help attract more customers and potential employees.
Key Takeaways
While the challenges are similar year over year, the energy and strategy with which they are being addressed in the c-store industry are vibrant and fresh.
The opportunities to differentiate oneself from the playing field are plenty. Henry Ford said, “If you always do what you always did, you’ll always get what you always got.” Selecting a strategy that focuses on people, culture and the bottom line will pay dividends.
Thank you to those who took the time to answer the survey questions and provide insightful comments.