Employees lie at the heart of retail: a great location, enticing merchandise and attractive prices mean little without employees to serve customers. The need for workers creates a need for human resources to recruit, hire, train, schedule and pay them. The administrative aspects of employing staff pose legal risks when not handled correctly, giving the HR function an important role in any store's financial success. Small or large, retailers deal with common challenges that lead them to consider human resources expertise a worthwhile investment.


The recruitment-hiring-onboarding process becomes a way of life for HR-entrusted managers in retail thanks to the industry's high turnover. Finding reliable, customer-oriented people who accept flexible working hours tests HR tenacity; training and mentoring them consumes time. A store's workforce demographics create a diversified group that HR must mold into a cohesive team to ensure rewarding shopping experiences for customers.


Retail stores need employees on the floor from open to close. The person responsible for scheduling, either the HR manager or store manager, must anticipate traffic to schedule enough people for sales and peak shopping hours. Minimizing floor coverage during off-peak times, or when local events monopolize customer attention, has equal importance. Those schedules must include adequate breaks and meal times, provide the guaranteed weekly hour minimum for full- and part-time employees and respect restrictions related to minors. Calling in extra help as needed for recovery, deliveries and display changes puts pressure on the payroll budget. Call-offs and no-shows also affect the staffing schedule and customer service.


Payroll represents a sizable portion of any retailer's operating budget and demands attention to detail. Sales associates who punch in a few minutes early for meal breaks could bloat payroll cost over time, while not tracking vacation and personal days taken could lead to overpayment. Because many retail stores are open on holidays, HR deals with premium pay policies and must budget accordingly. Small stores compete with larger retailers for help during the peak fall and summer hiring periods, which puts stress on the hourly wage they must offer to attract talent. Payroll attention to detail includes keeping records for three years and having each employee complete a W-4 withholding authorization form.


HR must keep track of who works and when. Failure to monitor the number of hours an on-call or floater employee works in a year could trigger the need to change his status to part time and incur related benefit costs. Properly documenting absences to support disciplinary actions helps to protect a retail store from legal problems and reduce unemployment compensation expense. The high turnover commonly experienced in retail creates a mountain of paperwork for its HR professionals; however, familiarity with programs such as the Work Opportunity Tax Credit, or WOTC, can bring welcome tax credits. A retail store, like any employer, has an obligation to maintain a separate I-9 file as proof that those hired are eligible to work in the U.S., and to observe confidentiality of employee files and medical information. Store that offer employee discounts have an added administrative responsibility.


Although a retail HR manager may use a background check and references to select new hires, these tools do not always predict employee behavior. Internal theft haunts many retail establishments: industry employees stole $34.5 billion in 2011, according to the National Retail Federation. Handling related terminations falls on HR's shoulders. Some retailers have the luxury of a loss-prevention department to assist HR; in stores without such a department, HR must have a protocol in place for legal considerations.