The hidden cost of a bad hire in retail and how executive search firms can help you avoid them

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The hidden cost of a bad hire in retail and how executive search firms can help you avoid them

As a Chief HR Officer (CHRO), you are acutely aware that hiring the right talent is a cornerstone of organisational success. In retail—a fast-paced, highly competitive, and customer-driven industry—this truth becomes even more pronounced. The wrong hire doesn’t just lead to inefficiencies; it can ripple across teams, morale, customer satisfaction, and ultimately, the bottom line.

The costs of a bad hire in retail are particularly stark. Research consistently shows that the financial impact can range from 50% to 200% of the employee’s annual salary, encompassing recruitment expenses, onboarding investments, and the productivity drag caused by poor performance. For retail leaders considering the cost of a bad hire, this reality underscores the urgency of building robust hiring strategies, particularly for senior roles where the stakes are highest.

The True Cost of a Bad Hire in Retail

1. Financial Implications

Replacing an employee is never cheap, but in retail—an industry with traditionally high turnover rates—the costs escalate quickly. A single poor hiring decision can lead to:

  • Recruitment expenses: Advertising, agency fees, and internal resources spent on the hiring process.
  • Onboarding and training: Time and money invested in bringing the new hire up to speed, often without ROI if they fail to meet expectations.
  • Lost productivity: The vacancy period caused by rehiring stretches teams thin, often impacting overall store or department performance.

For senior-level positions, these costs multiply. The wrong leader can derail initiatives, disrupt team dynamics, and delay strategic objectives, all while consuming disproportionate management attention.

2. Impact on Team Morale and Productivity

A bad hire isn’t just a financial burden; it’s also a human one. Teams in retail operate in close quarters under significant pressure to deliver results. A poor-performing or toxic hire can:

  • Erode morale: Employees often feel frustrated or demotivated when forced to pick up the slack for underperforming colleagues.
  • Lower productivity: Time spent addressing performance issues detracts from operational priorities.
  • Trigger attrition: High performers may leave, unwilling to tolerate a toxic or poorly managed work environment.

Research from Harvard Business School quantifies this toll: a toxic employee can cost more than $12,000 in lost productivity annually, even before considering the ripple effects on team dynamics.

3. Impact on Customer Satisfaction

Customer satisfaction is the lifeblood of retail success. A bad hire, particularly in customer-facing roles or leadership positions, can directly undermine this critical metric. For example:

  • Negative interactions: Poor communication or attitude can turn a loyal customer into a detractor.
  • Inconsistent service delivery: Gaps in training or poor leadership can result in operational missteps, affecting the customer experience.
  • Reputation damage: Dissatisfied customers are likely to share their experiences, especially in the age of social media and online reviews.

A report by SHRM (Society for Human Resource Management) reveals that 95% of organisations attribute bad hires to a measurable decline in customer satisfaction, a statistic retail businesses cannot afford to ignore.

How to Avoid the Cost of a Bad Hire

The solution to avoiding these pitfalls lies in proactive, strategic recruitment—a process that balances efficiency with thoroughness, particularly for senior-level positions. Here’s how retail leaders can mitigate the risks:

1. Develop a Robust Recruitment Process

Retail organisations must avoid the cost of a bad hire and move beyond surface-level assessments and implement processes that rigorously evaluate candidates. This includes:

  • Competency-based interviews: Assess candidates’ skills in realistic scenarios to gauge their ability to perform in high-pressure retail environments.
  • Cultural fit assessments: Ensure alignment with organisational values to promote long-term success.
  • Multiple stakeholder involvement: Engage a diverse panel to minimise bias and gain a holistic view of the candidate.

2. Prioritise Data-Driven Hiring Decisions

Modern HR technology can provide valuable insights into a candidate’s potential fit. Use:

  • Predictive analytics: Tools that analyse past performance data to predict future success.
  • Behavioural assessments: To evaluate traits critical for retail success, such as resilience, adaptability, and customer focus.
  • Talent benchmarking: Compare candidates against industry standards to ensure you’re hiring top-tier talent.

3. Leverage Executive Search Expertise

Partnering with an executive search firm can significantly enhance the recruitment process for senior roles. Their value lies in:

  • Access to passive talent: Many of the best candidates aren’t actively seeking new opportunities. Executive search firms tap into their extensive networks to find these hidden gems.
  • Industry expertise: Specialised firms understand the nuances of retail, enabling them to match candidates with the skills, experience, and cultural fit required.
  • Efficiency and precision: By outsourcing the time-intensive stages of search and vetting, you can focus on interviewing only the best-qualified candidates.

4. Invest in Employer Branding

To attract top talent, retail organisations must position themselves as employers of choice. This includes:

  • Showcasing company culture: Highlighting the organisation’s values and workplace environment to appeal to like-minded candidates.
  • Offering clear career progression: Demonstrating how candidates can grow within the company.
  • Providing competitive compensation: Ensuring your packages reflect the value of top-tier talent, especially in a competitive industry like retail.

The Bottom Line: Talent Drives Retail Success

Hiring the right talent is not just a human resources function—it’s a business-critical priority that can directly influence revenue, customer satisfaction, and long-term growth. In retail, where margins are often tight and customer expectations high, every hire must count.

By investing in a thorough, strategic recruitment process and leveraging the expertise of executive search firms, retail CHROs can minimise the risk of bad hires. This approach not only saves costs but also ensures that the organisation is equipped with the right leadership to thrive in a dynamic, competitive industry.

The stakes are high, but with the right strategies, the payoff is even higher. The question is: are you ready to prioritise talent as your organisation’s most valuable asset?

Our focus on long-term partnerships

At re:find we believe that recruitment is not a one-off transaction but rather a long-term partnership. We aim to build long-term relationships with our clients, providing ongoing support and advice to help them find and retain the best talent for their organisation.

We understand that every organisation is unique and that there is no one-size-fits-all solution when it comes to recruitment. That’s why we offer bespoke recruitment solutions that are tailored to meet the specific needs of each client. Whether you need help with a single hire or a full recruitment campaign, we can help.

We are committed to providing our clients with the highest quality service. We take the time to understand your organization’s culture and values, as well as the specific skills and experience needed for each role.

For more information please get in contact with our Managing Director, James Cumming.

Mindset vs skillset: redefining retail talent for the digital age

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Mindset vs skillset: redefining retail talent for the digital age

Today more than ever, chairs and chief executives are seeking our advice about structuring their organisations to compete in the digital age and creating the right leadership model for the future. 

Increasingly it’s about behaviours, not just skills and experience. 

Historically, retail has been an industry driven by ruthless efficiency, both at head office and in stores, and typically chief exec succession
candidates came from buying and merchandising or operations.  

Now the most likely contenders are a new breed of data-driven, customer-centric marketeers. 

Disrupt or be disrupted 

Companies need to continuously evolve and structures must be more fluid, moving from functions to centres of excellence, and from siloed departments to collaborative teams working together to fulfil the customer mission. 

In many ways mindset has become more important than skillset; creating a learning organisation which is flexible and responsive and able to deal with ambiguity.  

This is where the leadership style of the chief executive is critical. 

Retail is hardly the career of choice for millennials, unless it’s a sexy pureplay, and the old ‘command and control’ approach has to give way to one that is visionary and strategic.  

Pace and agility are key to success, and empowerment and engagement of the internal as well as the external customer is a must. 

Structures need to be flatter and more inclusive, with a sense of purpose and fulfilment that goes beyond work/life balance to truly win hearts and minds. 

Structure diversity 

If the business model is omnichannel, with the majority of sales through stores, then an understanding of the operational disciplines in the form of a really strong chief operating officer may be needed.  

We will have to take a more open approach to organisation design structures.  

Above all, tomorrow’s chief executive must be a visionary with high EQ, who is really good at putting together a team that is collegiate and includes all the skills and talents to win in an increasingly complex and demanding world. 

The message is clear – the route to the top in retail is changing and so must the leadership style.  

And an increasingly fickle and demanding workforce is more likely to identify with a brand that champions collaboration, inclusion and engagement as its core values.  

 
Click here to read the original article from Retail Week. 

To discuss this article further, you can email me on danny@refind.co.uk. 

re:find help businesses find the talent they need to deliver transformational change.  Clients call us when they need change to happen quickly and effectively. We are Executive Search and Interim Search specialists. 

Click here to read about what we do specifically in the retail sector. 

A store without stock? Yes please.

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A store without stock is still a store

You don’t need to have ‘stuff’ in a store for it to be a shop. There are alternatives. 

Imagine this. You’re in shopping mode and heading down to the high street. There are a load of stores with shelves groaning under the weight of all the inventory displayed within their walls. You are spoilt for choice. 

Yet instead of selecting from any of them, you head for the one emporium that appears to have no stock whatsoever. It might sound a curious decision, but it is not without merit. 

You’re a modern person and you know your way around both your laptop and the smartphone to which you are umbilically attached. 

So you know exactly what’s out there and what the price of almost everything is, long before you arrive at the shops. All you have to do is pick up your order and perhaps have a little ‘service’ time. 

That is the underlying premise of Nordstrom Local, an offshoot of the eponymous Seattle-based department store group designed to provide a more convenient option for existing customers, layered with a range of services. 

At present there are two Nordstrom Locals, both in Los Angeles. The first opened at the end of last year and the second, measuring 3,000 sq ft, welcomed its first ‘shoppers’ a couple of months back. 

They do have a very limited amount of fashion stock, but none of it can be taken away and the clothes are really just there as tasters of what Nordstrom is about. 

More to the point, they are not just glorified click-and-collect stations. Instead, visitors can have a coffee at the in-store café (or maybe even a ‘drink’ drink) while they wait for their shoes to be repaired, having handed in their clothes to the dry cleaner, prior to having a manicure. This is service. 

And shoppers appear to like it. Two more Nordstom Locals are scheduled for LA this year and it’s a fair bet that more will follow in other large Nordstrom-friendly conurbations. 

Is this, however, a store? It doesn’t really have anything tangible that you can buy in situ and walk away with, but it does provide something that Amazon at present cannot. 

Shoppers may make purchases online, but they can then enjoy a range of services as they complete the transactional loop when picking up the goods. 

This is an online shop with bells and whistles and seems a good alternative to the mundane click-and-collect counter. There are also reasons to come back. 

Nordstom Local may not be the whole of the future, but it certainly looks like one direction in which things are headed. 

Click here to read the original article from Retail Week. 

James Cumming is our MD, Interim and Transformation Search specialist. If you’ve got a hard-to-fill role and need some help, get in touch. Connect with him on LinkedIn here.

If you would like to find out more about re:find and how we can support you and your business then please get in touch.

Restructure in retail – will the changes prove counter-productive?

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Restructure in retail

Tesco has launched a consultation with 9,000 workers as it ramps up efforts to build a “simpler, more sustainable business”. 

The supermarket giant is proposing a raft of changes that will affect staff working on in-store counters and in stock management, merchandising, staff canteens and head office operations. 

It has been a constant theme during Dave Lewis’ four years in charge of Tesco – building a simpler, more sustainable business, focused on serving customers better. 

On Monday, Tesco revealed the latest phase of that long and arduous journey during a series of emotionally charged meetings with staff. 

The grocer is streamlining its operations across a number of areas, which will impact 9,000 staff. Around half of them are expected to lose their jobs. 

Service counters such as fishmonger’s, butcher’s and delicatessens will close in 90 Tesco stores. The number of hours required on merchandising will be slashed as the grocery giant reduces the number of layout changes it makes in its supermarkets. 

Similarly, there will be a “significantly reduced workload” for those working on stock management as new technologies track gaps on shelves. Staff canteens will no longer have a hot food service – negating the need to employ third-party caterers – and 500 jobs will be axed at head office as the retailer moves to a “simpler and leaner structure” at Welwyn Garden City. 

Basic economics 

Bernstein analyst Bruno Monteyne, a former Tesco director, also understands the motivations behind the grocer’s sweeping changes. 

He believes they would have been “planned and executed over several years”, rather than being a knee-jerk reaction to the “competitive and challenging market’”. 

Those challenges have been born out much more than the changing shopper habits Tarry alludes to. A perfect storm of rising rents, ballooning business rates, the increasing popularity of online shopping and the relentless onslaught of the discounters has forced Tesco – and its big four rivals – to radically rethink operations. 

“The increased wage costs, National Insurance contributions, business rates and the like will all contribute to the basic economics of the counter operation making little sense in many stores,” Grocery Insight director Steve Dresser says. 

The emergence of the discounters as a mainstay of British food shopping has also played a big part in Tesco’s streamlining. The supermarket giant is bidding to regain a group margin of 3.5% to 4% by 2020, and so operating in a more efficient fashion – in the way that Aldi and Lidl so famously do – has been a central driver. 

But the growth of the German duo has had some potentially unforeseen consequences. As Tesco ploughed investment into its entry-level ranges – creating the successful stable of ‘Exclusively at Tesco’ brands – shoppers have been slowly lured away from the service counters that were so long seen as a crucial differentiator between big-four operators and their discount counterparts. 

“The irony with this strategy is that chasing discounters in meat, fish and cooked meats has led to a strengthening of the value tier in terms of price points and range, designed to stop discounters establishing a price gap,” Dresser explains. 

“However, if you make your aisle of product cheaper and certainly equivalent to discounters’, then there are fewer reasons to visit the service counters unless you are a real die-hard shopper.” 

Beware the pitfalls 

The finances, then, seem to stack up. But could the changes have an adverse effect on the store experience? It is a pitfall that both Sainsbury’s and Asda have fallen into in the not-too-distant past. 

Both grocers made radical changes to store teams over the past few years, most recently Sainsbury’s when it “reset” its shopfloor structure in 2018. The business “streamlined” the number of in-store roles, creating five “broader” positions – down from the 22 it used to offer. 

But availability in its stores suffered during a hectic summer of trading, as its supermarkets struggled to keep up with demand heightened by the heatwave and England’s surprise progression in the World Cup. Those issues were not fully addressed ahead of the crucial Christmas period, despite the protestations of boss Mike Coupe. 

Similar fears may well be raised among analysts and Tesco investors after it said it had “found a simpler way to conduct store routines”, which would be rolled out to all its shops. 

Clive Black, head of research at M&S and Morrisons house broker Shore Capital, is among those who admits he will be “watching with heightened interest to see overall availability in the estate over time” as the new model filters through. 

Roberts, however, has few concerns and suggests some of the hours freed up from the service counters could be used to make sure customer service and availability do not deteriorate in a similar fashion. 

“You can tell that counter staff aren’t all rushed off their feet. If they can be redeployed elsewhere to contribute a lot more to customer service, or to improve availability, then arguably that’s a better use of their time and Tesco’s money than standing behind a quiet service counter. I wouldn’t read too much into it in terms of the impact it will have on the broader offer,” he argues. 

Minor risk 

But could the loss of those counters – and the expert knowledge that employees working on them are supposed to provide – ultimately lead to a loss of customers? After all, Morrisons sees its market street proposition of butchers, bakers and fishmongers as a key USP – and that could leave it well-positioned to reap the rewards of Tesco’s move. 

“To some shoppers, at least, counters are an important part of how they shop. It might be the case that this is a deal-breaker for them and they will shop elsewhere,” Roberts says. 

“The obvious choice for those shoppers would be Morrisons and, to a lesser extent, Waitrose. Indies as well might be able to step up to the plate on meat and fish in particular. But ultimately, fresh fish in the UK is such a microscopic part of our way of life that not many people are going to miss those counters. 

“So the overall risk of Tesco losing customers is minor. It doesn’t appear that a lot of shoppers are habitually frequenting the counters and spending a lot of money through them.” 

Echoing Roberts’ views, Monteyne concludes that “the plan reassures us in many ways” and insists the impact on Tesco’s quality credentials “should be minimal”. 

But the effect on costs should be more visible. Monteyne estimates Tesco will save between £150m and £170m a year as a result of the latest structural changes. About 70% of those benefits will be felt in 2019/20 – the year Tesco is aiming to return group margins to that magic figure of almost 4%. 

Monteyne’s ultimate conclusion should ring in the ears of Tesco’s critics and rivals: “Anybody doubting the Tesco margin recovery should think again.” 

Click here to read the full article by Retail Week 

James Cumming is our MD, Interim and Transformation Search specialist. If you’ve got a hard-to-fill role and need some help, get in touch. Connect with him on LinkedIn here.

If you would like to find out more about re:find and how we can support you and your business then please get in touch.

Predictions for retail this year

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Predictions for retail

As we head into 2019, we’re facing a pretty uncertain time. While 2018 was a year of growth for many retailers and brands, accelerated by tax cuts and low unemployment, 2019 is more precarious. The stock market is in flux, many retailers are facing the reality of steepening tariffs, emerging markets are flexing their muscles as they take on a greater share of global growth and it’s anyone’s guess on which way the wind might blow fickle consumers and their expectations for connectivity around every transaction. 

That said, you could also say that the glass is more than half full and that these challenges also present opportunities for savvy retailers and brands willing to face the winds head on. Here are 10 key points on what the retail industry should expect in 2019. 

Click here to read the full article by Forbes but here is an overview: 

1. Retailers will get personal with zero-party data 

Consumers are becoming more aware of their rights thanks to Facebook and GDPR, which is making way for a new age of privacy and personalisation. If 2018 was the year that marketers were forced to wean themselves off third-party data sets, 2019 will be the year they shift to “zero-party data.”  

2. Small is the new big 

Digitally-native and niche brands have come on the scene over the last couple of years, and 2019 will be the year that the growth of these brands will eclipse the growth of traditional retailers – and not only in their online businesses. 

3. Customer-centricity will go mainstream 

Retailers have been saying they want to “put the customer at the center of everything they do” for the past two or three years, but have struggled with how best to scale this. In 2018, retailers learned that simply monitoring social media is not enough. We believe that, thanks to the adoption of technologies like Voice of Consumer (VoC) Analytics, 2019 will be the year that the industry actually makes the customer-centric model happen. Offers a robust solution that enables them to determine what their customers want and also to deliver it – with speed and at scale. 

4. Retailers and consumers will begin to feel the weight of tariffs 

Retailers will be faced with making decisions in 2019 to determine the categories and products they raise in price and push the cost increases onto the customers, and where they need to absorb the cost increases themselves. This may force retailers to evaluate whether it makes sense to exit certain categories if they cannot sell product profitably.  We all wait on the outcome…

5. Algorithms take control 

Retail has long been driven by savvy merchants who had a penchant for following their gut to the right product selections and it has been an art far more than a science. But as more retailers implement innovative tools to leverage consumer data – whether to confirm the merchant’s gut feeling, or to guide decisions altogether – 2019 will be the year when the true science of retail takes hold. 

6. Millennials will flock to brands – they will want luxury 

Millennial purchasing power continues to increase.  By 2025, Bain & Co. forecasts that Millennials and Generation Z will represent 45% of the global personal luxury goods market.  This is a great opportunity for luxury brands, but it’s also a challenge since younger consumers think and shop differently than their parents. 

7. Baby Boomers will constrict spending in a much bigger way 

Along with the growth of Millennial spending, comes the decline of spending by Baby Boomers.  Millennials are expected to overtake Boomers in population in 2019 as their numbers swell to 73 million, while Boomers decline to 72 million. But the Boomer segment is still a huge cohort whose spending habits drive the economy. 

8. Apple jumps the shark 

A warning to Apple aficionados:  The Crown of Cupertino is losing its luster.  We haven’t seen any real innovation from Apple in years – with only incremental enhancements to the iPhone and Mac since 2010.  Apple has grown revenues by increasing prices – the average selling price of an iPhone in 2018 was $765 which was up 20% from 2017, while unit sales have flattened out. 

9. Amazon: Prime membership plateaus and prices increase 

Amazon’s growth of Prime membership is showing signs of slowing down. At 55 percent, just over half of the U.S. is subscribed to Prime, which is about the same as in 2017.  This was the first year that Prime membership did not increase. Some of this may be due to the fact that Amazon raised the Prime membership price in May to $119, but it is more likely a function of reaching a saturation point in the U.S. market. 

10. The final divide of retail winners vs losers 

2018 saw additional retail bankruptcies, and 2019 will be the year of the final shakeout.  Most of the winners and losers have been decided, but several more will hit the mat this year.   

As in any year, 2019 will have a tremendous amount of opportunity for those who spot the trends and position their companies to capitalise on them. 

To discuss this further, you can email me on danny@refind.co.uk. 

re:find help businesses find the talent they need to deliver transformational change.  Clients call us when they need change to happen quickly and effectively. We are Executive and Interim Search specialists. 

Click here to read about what we do specifically in the retail sector.