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Outside Business Journal

How to Keep Your Retail Employees from Jumping Ship When the Big-Box Stores Come to Town

How are independent outdoor shops retaining employees—not to mention morale and integrity—in a pinched hiring market?

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When Christine Iksic heard that a Public Lands store was opening in Pittsburgh in fall 2021, she didn’t panic. Her specialty store, 3 Rivers Outdoor Co. (3ROC), has successfully coexisted with REI and Patagonia for four years, so the arrival of the new outdoor chain concept store (under the Dick’s Sporting Goods umbrella) wasn’t overly alarming. While Iksic can’t afford to pay the higher wages that her competitors do, or offer health care benefits, she’s never lost an employee to one of Pittsburgh’s big-box outdoor retailers. In fact, she has several former green vests on her payroll who say they prefer 3ROC’s close-knit staff—they hang out in the store even while off the clock—and the fun family vibe. So Iksic was completely blindsided when her business partner broke the news that he was leaving to join the Public Lands team last July.

Months later, Iksic fights back tears. “He said Public Lands reached out to him,” she says. “It just feels so predatory.” Iksic is still trying to make peace with the circumstances— and the fact that given the choice, she might have done the same thing. “[Public Lands] pretty much doubled his salary and offered him stock and health benefits, plus work-from-home and weekends off,” she says. “How could you say no?”

As an independent retailer, Iksic is not alone in her struggle to attract and retain good employees. Most mom-and-pop gear shops can’t match the hourly $12.50 starting rate at, say, Public Lands, let alone its management salaries, corporate benefits package, and 401(k). While there are currently only two Public Lands stores, in Pittsburgh and Columbus, Ohio, it’s possible the new chain will take off the same way REI did. With 174 retail outposts in 41 states, REI continues to expand, with recent store openings in Portland, Maine; Santa Cruz, California; Chicago, Illinois; Cambridge, Massachusetts; Tampa, Florida; and, coming in summer 2022, Glenwood Springs, Colorado. Even small towns, which have a limited pool of employees, are feeling the effects of REI’s reach: On November 5, REI opened in Jackson, Wyoming, a town of just 10,000 people.

Adding to the tension is a pandemic-fueled staffing shortage that’s driving up hourly rates nationwide. In Seattle, Sandeep Nain, owner of Ascent Outdoors, was understaffed all summer because employers like Dick’s Sporting Goods and Starbucks were advertising $19 an hour to start, plus a signing bonus. Finally, in the fall, with the holiday season looming, Nain felt he had no choice but to increase his hourly rate to $19—which required that he also give his existing staff a raise to reflect the upward shift. “The costs are heavy,” he says. “But there’s no other way to get new employees right now.”

Sarah Morton, owner of Clear Water Outdoor in Lake Geneva, Wisconsin, founded her shop 16 years ago. From the outset, Morton knew she would never be able to compete with the big chains on pay. Instead, she drew on the 20 years she spent working in outdoor retail before opening her own store to create the best work environment she could imagine. Clear Water Outdoor extends a discount to employees’ families, pays employees to work store-led community events ranging from stand-up paddleboard races to turkey trot runs, provides free boat and paddleboard rentals to employees on weekdays, and takes staff to buying shows with all expenses paid, among other perks. But Morton is most proud of the personal attention Clear Water Outdoor gives staff to “build them up” as employees and human beings. Exhibit A: When a part-time employee who was attending college graduated with a degree in psychology, she had trouble finding work in her field. Morton encouraged the young woman to step into a full-time opening for assistant manager, and gifted her the book Why We Buy, about the psychology of shopping. Finding employees’ passions and helping them grow doesn’t eliminate all Morton’s retention woes, but it helps: Sixty percent of Clear Water Outdoor’s staff started at least a decade ago. Kellie Strong, for instance, is a buyer who’s been with the company for 13 years. “I went through some pretty serious autoimmune disease stuff and the flexibility they gave me to work from home, to get my job done when I could, allowed me to continue to work while I was figuring out how to heal,” she says. “Any time any of us has gone through something difficult, everyone helps out, whether it’s covering tasks, letting them have the time off they need, or checking in on them personally.”

David Polivy, the founder and co-owner of Tahoe Mountain Sports in Truckee, California, says that these types of intangible benefits can be more valuable to employees in some towns than the one-size-fits-all approach to compensation deployed by big-box retailers. In Polivy’s community, for example, as in many mountain towns across the Western U.S., housing inventory and affordability are employees’ biggest pain points. Accordingly, Polivy gives employees loans for security deposits, co-signs leases with them, and helps them find replacement housing when they face eviction because the property they’re renting is going up for sale. “Working at a big-box chain, you might have a nice corporate benefits package,” Polivy says. “But is REI going to come in and pay your security deposit for [a home rental] without expecting to be repaid for a year or two? The creative compensation options that you can get in specialty retail are potentially much more impactful, especially in the short term.”

Similarly, Lucy Hedrick, co-owner of Wilderness Sports in Dillon, Colorado (where an REI opened across the street in 2017), is in the process of transforming what used to be a consignment section on the store’s upper level into three apartments to use as employee housing. Plus, she and another co-owner with a relevant financial services background worked together to implement small-business health care benefits for staff. “It’s really important for employees here, with housing so tight and cost of living so high,” Hendrick says. “If you don’t have the skills to figure out how to do it, find someone who does—a consultant or another small-business owner.”

Polivy says these highly personal employee perks mirror the personal touches customers have come to expect at mom-and-pop shops—which is the reason they often choose them over bigger chains. “We’ve done the curating for [our consumers],” he says. “We choose between thousands of styles of footwear every season to narrow down what’s going to be the best for our customers and our community.” That same thoughtfully tailored attention can go a long way with employees.

By the Numbers

7: Number of locations REI opened in 2021

50,000:  Size, in square feet, of each inaugural Public Lands store

$12.50:  Hourly starting wage at Public Lands

17.8%: Rise in national median rent price in 2021

37.8%:  Increase in national retail job openings from October 2020 to October 2021

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