9 2025 retail recruitment challenges & how to navigate them

In this article, we’ll explore the current recruitment challenges facing the retail industry, and how businesses can navigate them to fill skills gaps and nurture an engaged, motivated workforce.

What are the biggest retail recruitment challenges facing the industry?

Common recruitment challenges facing the UK’s retail industry include low pay, high staff turnover, and employee engagement. Let’s take a look at each of these in more detail and explore how retailers can overcome them successfully.

1. Employee turnover

The challenge

Retail is one of the sectors with the highest employee turnover, with data from the British Retail Consortium showing that the industry’s average staff turnover rate came in at 50.8% at the start of 2023. This high level of staff retention impacts morale and team relationships, which can influence more workers to find another role elsewhere, creating a vicious cycle. 

Constantly having to hire new staff is costly and time-consuming for retailers, in terms of recruitment, employee onboarding and training, and it can take its toll on wider team morale. 

The solution

Retention begins at the recruitment stage. A branded careers site is like a shop window for your business; use the site to show that your company is an attractive place to work, detailing the competitive employee benefits you offer, and display your workplace culture. Make it known that hard work and good performance are recognised and rewarded, and showcase the teamwork, collaboration, training, and diversity, equality and inclusion strategy at the heart of your business. 

But it’s not enough to simply shout about this on your recruitment portal; you need to make sure all of this is a reality too. Invest in your staff, recognise excellent performance, and foster a collaborative culture built on open communication. When employees feel valued and that they have a voice, they’re more likely to stay with your business long term, helping you to tackle this most prevalent of retail recruitment challenges.

2. Inadequate recruitment tech

The challenge

Several key retail recruitment challenges can be exacerbated by outdated hiring software that causes bottlenecks in the talent acquisition process. If hirers don’t have access to dynamic tools that allow them to schedule candidate communications easily, automate reference checks or conduct video interviews, this can slow down and hinder time to hire. This can impact the wider business and place more pressure on remaining staff, impacting morale.

The solution

Put an end to these retail recruitment challenges with an end-to-end hiring platform, such as Talos ATS. Our all-in-one retail recruitment software can help you to manage high-volume recruitment, nurture talent pools, recruit skilled candidates, automate hiring admin, and lots more.

3. Employee engagement

The challenge

Many common retail recruitment challenges can impact employees’ engagement levels and overall morale. Meanwhile, the repetitive nature of some retail tasks may feel unstimulating to some workers, particularly if their performance isn’t recognised by their employer. These factors can have a significant impact on staff engagement, potentially impacting retention further.

The solution

Providing regular team building and staff engagement activities is a proven way to boost team engagement, motivation and morale. Employee engagement ideas include:

• Social events
• Company volunteering days
• In-store employee competitions
• Recognition schemes
• Wellness programmes

Gain greater insights into how engaged your workforce are with Talos Engage. Our employee engagement platform allows you to conduct gamified employee feedback surveys to provide you with insights into exactly how your staff feel about your company, and what changes they’d like to see. Access to this information is invaluable, so make these surveys a regular part of your employee engagement strategy.

4. Low pay

The challenge

Retail jobs typically offer an hourly rate to workers, often at minimum wage. This can mean a comparatively low salary, despite long working hours and the physical nature of the work. 

While this may suit students or other workers looking for flexible, short-term positions, employees with additional responsibilities need more certainty and a stable, living wage. Without this guarantee, this can fuel other recruitment challenges in the retail industry, including difficulty attracting skilled talent and high staff turnover. 

The solution

As of April 2025, the UK government increased the National Living Wage to £12.21 per hour, with the National Minimum Wage and the Living Wage for 18 to 20-year-olds rising to £10 per hour. This means that many retail workers will receive a boost to their wages, making the sector one where workers are better able to build a long-term career that pays them fairly. 

Chancellor of the Exchequer Rachel Reeves said: “This government promised a genuine living wage for working people that will support people with the cost of living…this pay boost for millions of workers is a significant step towards delivering on that promise.”

Alongside offering the National Living Wage, retail employers should consider providing other employee benefits to their workforce too. Perks such as discounted gym memberships or childcare support can allow workers to save money elsewhere so their wages go further, while helping them to feel valued. Not only can this make a business a more attractive place to work, but it can also help workers to save money elsewhere.

Moving away from zero hours contracts is another way that businesses can combat some of the most common retail recruitment challenges. With greater certainty over the number of hours they’ll be paid for, employees are more likely to feel valued, benefiting everything from team morale to customer experience.

5. Skilled worker shortage

The challenge

A shortage of skilled workers is one of the biggest retail recruitment challenges currently facing the industry – something that’s been exacerbated following Brexit, and the COVID-19 pandemic. Both of these events led to many skilled workers leaving the sector permanently. 

What’s more, low pay means individuals don’t necessarily stay in the sector long term, leaving before they are able to reach skilled leadership or management positions. There can also be competition within local talent pools between retail and hospitality businesses for roles offering similar pay, widening retail’s skills gaps further.

The solution

Investing in existing staff to reduce turnover and hold on to skilled talent is one of the best ways to combat the retail skills shortage. By providing ongoing training and development to employees, retailers can create internal promotion opportunities, eliminating the need to hire externally for leadership and management roles. 

However, upskilling staff is only one aspect of this; it’s vital to create a culture that workers want to be part of and stay with, so all of that investment in training and upskilling doesn’t go to waste. 

6. Seasonality of work

The challenge

The seasonal nature of retail work is another key hiring challenge that affects the industry. Many retail businesses need extra staff over the Christmas period, while shops in seaside towns or other tourist areas often take on extra workers in the summer months. These short-term contracts may benefit students, but can be unattractive for many other demographics. 

Seasonal hiring can also create challenges around high-volume recruitment, with retailers often having multiple roles to fill across different locations at key seasonal periods. This means that roles aren’t necessarily filled with the best talent, as they simply need to be filled quickly and at volume, contributing further to the industry’s shortage of skilled workers. 

The solution

Many businesses may believe that seasonality is one of the unavoidable retail recruitment challenges, but this doesn’t have to be the case. At the end of an employee’s seasonal contract, find out if they want to stay with your business; not all workers will, but some will be keen to stay with you longer term. Hold on to these staff beyond peak seasonal periods, and invest in training and upskilling them. This can help you to create a more engaged workforce, while also saving on recruitment costs next time the season comes around.

7. Workforce planning

The challenge

Next on our list of recruitment challenges in the retail industry is accurate workforce planning. Customer behaviour can be influenced by seasonality, trends, and wider financial factors, which can create unpredictable changes in shopping habits. As a result, retailers can struggle to know when and how many workers to hire, which can place extra pressure and stress on existing staff.

The solution

Retailers can more accurately forecast their staffing needs with access to workforce analytics. Talos ATS provides hirers with real-time, AI-powered talent analytics, covering areas including:

• Current industry hiring trends
• Talent availability
• Location-based skills search
• Salary expectations
• Talent pool overview

Access to this information means retailers can make better-informed decisions about hiring, workforce costs, and planning ahead for peak seasonal periods. This means candidates are likely to have a better hiring experience and businesses will be able to offer more permanent positions. While some changes in shopping behaviour may be impossible to predict, retailers can find the staff they need faster thanks to this data. 

8. Lack of career progression

The challenge

Retail is often perceived as a low-skilled profession, with few progression opportunities, even though this isn’t the case. Busy stores don’t always have the time to focus on training and upskilling staff, which can contribute to high employee turnover. When workers feel as though their employer doesn’t care about investing in them or their development, this impacts morale, which may be felt by customers, impacting a company’s overall reputation. 

The solution

Retail businesses can provide career progression opportunities by investing in both personal and professional training and development. Implementing a leadership programme, offering management apprenticeships and providing mentoring opportunities are just some of the ways that retailers can make their business a more attractive place to work for those looking for long-term careers. Make these progression opportunities clear from the hiring stage by detailing them on your branded careers site.

9. Work-life balance

The challenge

The sector’s impact on employees’ work-life balance is another of the key retail recruitment challenges faced by the industry. Working in a shop can be physically demanding, as staff are on their feet all day, often performing manual work, and dealing with customers can be challenging. Retail shifts can also be long, spanning lunch breaks when customers do their shopping, and can include evenings and weekends. Stressful, tiring shifts can leave staff feeling drained and with little time to spend with loved ones or energy for other activities outside of work.

The solution

The negative perception of the sector’s impact on work-life balance is one of the biggest recruitment challenges in the retail industry, but it’s one that employers can take simple steps to combat. Empower your employees to achieve a healthier work-life balance by ensuring they have regular breaks from what can be a physically demanding job, and make sure evening and weekend shifts are allocated fairly. Consider offering shorter shifts to employees that have caring responsibilities or need more flexibility too.

Encourage staff to take their annual leave and spread it evenly throughout the year, and consider implementing a wellbeing programme or offering perks such as discounted exercise memberships to support employees further.

Using hiring technology to overcome retail recruitment challenges

Navigate current and future recruitment challenges in the retail industry with Talos ATS, our award-winning applicant tracking system packed with features to help retailers find the best skilled talent.

• CV screening tools
• Multi-job boards poster
• In-built careers site builder
• Tools to help you define your employer brand and EVP
• AI job advert writing assistant
• Unbiased, science-based candidate assessments
• Automated reference checking, including DBS checks
• Remote interviewing software
• Intelligent interview insights
• Employee onboarding suite
• Real-time, AI-powered talent analytics 

Save time, reduce recruitment costs, and improve quality of hire with Talos ATS. Get your free demo today and manage retail recruitment challenges in-house.