Five Strategies for the Convenience Store Industry to Address Labor Shortages in 2023

Editor's note:This article is the fourth in a series on key trends impacting the convenience store industry in 2023.

Recruiting and retention challenges continue to plague the U.S. convenience store industry. According to NACS's latest Industry Compensation Report, the industry's employee turnover rate reached 150% in 2021, the highest level since 2012. Experts point out that although pandemic-related store closures and business slowdowns are no longer the main issues, the industry's recruiting and retention difficulties have not eased.

"Over the past year, attracting and retaining employees has become even more difficult," said Rick Schlenker, co-founder and executive vice president of sales and marketing at Logile, a retail workforce management company.

In 2023, labor challenges have become a top concern for most convenience store retailers, with some companies trying innovative approaches to improve recruiting and retention over the long term.

Flexible scheduling becomes key

Schlenker noted that flexibility is one of the most valued traits among current and potential convenience store employees. Specifically, employees want predictability, stability, and more control over their work hours.

"Those who can meet these needs will win the talent competition," he said.

To retain existing employees, Weigel's, a convenience store chain based in Powell, Tennessee, piloted a four-day workweek at one store last January. According to Melanie Wilson Disney, the company's director of human resources, the idea originated during the COVID-19 pandemic and was piloted after a series of employee surveys.

The idea was "well received" among employees at the pilot store, with hourly workers quickly embracing it. After one quarter of the trial, Weigel's saw turnover rates begin to decline; by the third quarter of 2022, the results were "significant." Following the successful pilot, Weigel's quickly rolled out the four-day workweek to all hourly employees across its nearly 80 stores. When asked if the four-day workweek helped improve employee retention, Disney responded without hesitation: "Absolutely."

Beyond shortening the workweek, Schlenker said convenience stores can implement a flexible scheduling model that lets employees choose their shifts, even down to the number of hours on specific dates. "They don't even have to choose a full shift," he said. "For example, if a shift runs from 8 a.m. to 2 p.m., an employee can say, 'I can work 8 to 12, but I can't stay until 2.'"

Nouria Energy, headquartered in Worcester, Massachusetts (with about 170 convenience stores along the U.S. East Coast), is exploring a similar concept. Fouad El-Nemr, the company's executive vice president, said during a recent roundtable hosted by the Convenience Leaders Vision Group under the retail knowledge-sharing network Vision Group Network that they are considering introducing short shifts of 2 to 4 hours at stores, and even allowing employees to split their work across multiple periods in a day.

"We discussed in a meeting splitting shifts for mothers who need to pick up their kids in the afternoon, take them home, and then return to work," he said.

Schlenker also suggested that convenience stores could learn from companies like Lyft and DoorDash that leverage the gig economy. Gig workers are typically independent contractors who take on short-term work for multiple businesses, collaborating on an hourly, part-time, or ongoing basis. This is especially useful for retailers that are understaffed or need extra help on a given day.

It's not just small convenience stores that can leverage gig workers. At the Convenience Leaders Vision Group roundtable, Joe Sheetz, executive vice chairman of Sheetz, a convenience store giant based in Altoona, Pennsylvania, said the company has experimented with gig workers "in a very strategic way," primarily using them to help unload trucks, organize coolers, or "do the jobs most full-time employees don't want to do."

Despite initial skepticism, Sheetz said the gig model has performed "far better than expected." "It works better in some markets, but this approach lets us handle sporadic tasks more efficiently without having to ask full-time employees to work overtime or bring in temporary staff at the last minute," he said.

Raising pay, increasing pay frequency

The latest statistics show that hourly convenience store employees earn about $24,000 per year, lower than grocery store clerks. The average hourly wage for this position is less than $12, which is less than half of the U.S. average wage (according to Bureau of Labor Statistics data).

Schlenker said convenience stores need to remain competitive on pay to attract and retain employees. However, since many convenience store retailers cannot compete with cross-channel giants like Kroger and Walmart, their benefits packages and scheduling flexibility become even more important.

Both Weigel's and Pilot Co. have raised hourly wages over the past few years. While neither company disclosed the specific increases, both said the raises were aimed at retaining employees and attracting new ones.

"We remain competitive on compensation and respond quickly to market changes," Jamie Landis, Pilot's vice president of team member experience, said in an interview.

Retailers that cannot raise hourly wages might consider allowing employees, especially those in food service roles, to accept tips. Kevin Smartt, CEO of Texas-based Born convenience stores, said at the roundtable that he has introduced tipping at some stores and was "shocked" by the amount of tips employees received—averaging about $50 to $60 per employee per week.

"I'm convinced there are benefits to this," Smartt said at the roundtable. "Our employees are very happy."

Beyond the amount of pay, the method of payment also affects recruiting and retention. About a year and a half ago, Weigel's launched same-day pay for store employees, available after they complete one week of employment. Through a mobile app connected to Weigel's payroll system, employees can access up to 50% of their earnings from any regular shift in real time.

"I think this has been very helpful for improving retention," Disney said.

Schlenker expects same-day pay to become more common in the convenience store industry as 2023 progresses, because employees increasingly want to be paid on the day they work. "We see many companies doing this because employees say, 'I want to get paid when I leave work, with funds available immediately,'" he said.

Planning growth paths for employees

For retailers, providing clear advancement opportunities can boost morale and have a significant impact on retention.

"People want to know there's a path for growth when they join," Schlenker said. "They want to start as a store associate, quickly earn certifications, and qualify for other roles in the store, which increases their pay and gives them more variety in their work."

Landis said supporting employees' career growth is one of Pilot's "most important and effective ways" to retain staff. The company offers various development opportunities, including a general manager leadership development program and rotational development programs, which include hands-on training, online learning, self-study, and classroom learning (according to its website).

"We recognize talent, loyalty, and dedication, and we provide these team members with career growth paths, offering long-term stability and opportunities," Landis said.

At Weigel's, employees in corporate or management roles are "mostly promoted from within," meaning they understand the business "from the ground up." The company has a management development program called "Weigel's University," where store district managers nominate new associates to participate.

"We have a lot of opportunities," Disney said.

As Weigel's focuses more on recruiting, retention, and career development this year, the company plans to set benchmarks to track performance in these areas. "This is our focus for the year," she said.

Meanwhile, the Pilot team is choosing to focus on controllable factors—such as how they treat team members—because the labor market outlook this year is unpredictable, Landis said.

"When team members feel valued, they become our longest-serving employees," she said. "These employees may also recommend Pilot to friends and family as a great place to work."