Hiring and keeping the right employees can be hard for any business — but it’s especially difficult in an industry with naturally high turnover like retail.
Last year, Bloomberg found that turnover in the retail sector is 5% per month. And it costs almost $3,400 every time a worker leaves to find, hire, and train their replacement. In short, employee turnover costs you time and money.
Retail is a unique workforce, made up of part-time retail employees, full-time head office employees, contract distribution channel workers, and everything in between. Minimizing turnover across all these departments is important to grow your best talent and keep your operation running smoothly. Employees move on for a variety of reasons, some of which are out of your control, but minimizing employee turnover where you can is all about identifying at-risk employees and increasing employee retention.
Increasing Employee Retention
A study on employee retention by Willis Towers Watson found that more than 25% of employees fall within a high-risk retention category in the workforce. And they also found that “retention risks do not drop dramatically until employees have been with their organization over a decade,” making it important to identify what makes employees happy and what makes them stay with an organization long term. Let’s take a closer look at what you can do to address these high-risk retention employees and what they need to stay.
1. Hire Carefully
It can be tempting to fill an empty seat or get someone behind the register as quickly as possible, but taking your time to find the right person saves time, money, and headaches down the road. The Wall Street Journal recommends that employers “interview and vet candidates carefully, not just to ensure they have the right skills but also that they fit well with the company culture, managers, and co-workers.”
For some additional help with hiring and keeping the right retail employees, read our detailed hiring strategies in Retail Staffing 101: How to Hire, Train, and Retrain the Right Employees.
2. Offer Career Advancement
Employees thinking about leaving an organization often state that they feel stuck in their current role. In fact, Willis Towers Watson found that over 70% of high-risk retention employees believe that they have to leave their organization to advance their careers.
Without a clear career path or opportunities to develop skills, employees look outward to other companies for a promotion or role change.
This is especially prevalent with millennials — young workers born between 1980 and 1996. In a recent study, Gallup uncovered that 93% of this critical workforce left an employer the last time they changed roles. So give your employees a clear path to climb the proverbial ladder. Have regular discussions about opportunities within your organization, make a sustained effort to promote internally, and consider offering mentorship programs to pair up employees so they can learn new skills.
If your retail business offers these and similar opportunities for career advancement and education, encourages an open dialogue about promotions, and rewards employees for performance, it creates an opportunity to pick up millennials who are leaving previous companies for greener pastures.
3. Increase Responsibility
When any kind of employee proves their reliability, consider giving them a promotion or position of leadership. Offering retail workers more responsibility can make them feel more empowered and engaged, which helps curb that dreaded turnover rate.
According to When I Work, scheduling software for retail and service organizations: “Increasing responsibilities with an...employee demonstrates that you trust and value them.”
That trust can go a long way to help ensure your employees stay put.
Learn More: What is customer retention and why is it important?
4. Money Talks
This might seem obvious, but often employees are looking for more money to stay at their current organization. Gallup found that “44% of employees say they would consider taking a job with a different company for a raise of 20% or less.” Regular raises and bonuses are an important way to keep your best employees happy and decrease the chance of them looking externally for more money.
Now, what you might find surprising is how many employees worry about finances and the effect that might have on your business. Willis Tower Watson noted that 22% of employees believe that money concerns affect their productivity. With this in mind, some exceptional employers now offer financial planning workshops or assistance to increase productivity and ease the concerns of employees. This can be a great way to differentiate yourself as an employer that goes above and beyond.
5. Keep Things Interesting
Boredom is dangerous for any business — bored employees are less engaged, less productive, and are complacent with the status quo. Offering employees the opportunity to learn new skills, participate in workshops, attend educational classes, shadow a co-worker, or lead a new project increases the engagement and passion that they have about coming to work. Plus, unhappy employees are more likely to start looking for a new gig, with Willis Towers Watson reporting that employees who are at a high risk of leaving are over four times more likely to look for a new job to cope with work stress.
Of the employees that think about leaving, the ones most likely to follow through with it are the risk takers in the group. These workers love change, love trying new things, and are a valuable part of any business — driving movement and momentum within the organization.
Most employees in the high-retention-risk group say they enjoy new experiences, embrace change and are happy to take risks to get more out of life.
6. Perks and Company Culture
Nowadays many of the world’s top employers offer company perks and rewards, including free food, gym memberships, parties, flex-time, techy tools, and even nap rooms. But what is the benefit of these brag-worthy company perks? Aside from helping you attract the best talent and differentiate yourself from all the noise — a great company culture helps you retain talent and increase productivity as well.
Research from Gallup found that engaged employees did better than their less engaged co-workers in the areas of attendance, safety, performance, and employee turnover rates. These employees that were more engaged were also more productive and less likely to leave, but “just 32% of U.S. workers are engaged in their jobs.” The key to increasing engagement at work is to promote employee well-being in all aspects of their lives, and you can measure that wellbeing through an employee’s sense of purpose, social relationships, financial security, community involvement, and physical health.
Not every company is the same and can offer the same perks, but there are ways to increase employee engagement and well-being big and small. From holidays get-togethers to employee of the month programs and team-building sporting events, there’s an infinite number of ways to reward your employees that work so hard.
And how do you know if your efforts are working?
How to Measure Happiness
It’s important to have a dialogue with your employees to determine their satisfaction and see if your efforts to increase employee retention are working. Plus, you don’t ever want to feel blindsided by losing employees that you otherwise thought were happy.
Regular one-on-one meetings between employees and supervisors are a great way to check in, get a feel for what’s going on, and provide a platform where employees feel like they can have a discussion. Starting a conversation about wages, hours, or advancement can feel daunting, and just having a set time to talk with their supervisor can put employees at ease and prevent built-up frustration.
Regular huddles or stand-ups with small teams can also be a great way to check in on employee morale.
Large companies have used employee surveys to gauge employee satisfaction for years. Conducted by outside surveyors, these questionnaires provide employees with the anonymity to be honest and forthcoming in their answers. An issue with employee surveys is how often organizations write off the negative responses as bad apples exaggerating their unhappiness. So if you’re interested in starting an employee survey, prepare to listen and have an open mind about the responses and suggestions from your employees.
Not all turnover is avoidable. While it’s hard to say goodbye to someone who has chosen to move on, it’s also a great opportunity to learn about their experiences at your company in an open dialogue. Exit interviews are the perfect time to ask why an employee is leaving, what they liked and disliked about working there, and what they would have done differently.
Any information you gather from your workforce is invaluable to creating a better environment for current and future employees — helping you minimize employee turnover in the future. But it’s not realistic to expect a 0% turnover rate for any business, especially a retail storefront. Remember to also focus on hiring and training the right people, and growing a great all-around organization that will organically attract the talented, hard-working employees you’re looking for.
Employee Retention FAQ
What are the 5 main drivers of employee retention?
- Competitive compensation: Employees need to feel that their salary and benefits are competitive and fair in comparison to other companies in the market.
- Positive work environment: Employees need to feel supported, valued, and respected in order to stay with a company.
- Career development opportunities: Providing employees with the opportunity to learn, grow, and advance in their career can help a company to retain its top talent.
- Flexible work arrangements: Offering flexible work arrangements such as telecommuting, flexible hours, and job sharing can help employees to better manage their work and personal lives.
- Recognition and rewards: Recognizing and rewarding employees for their efforts and accomplishments can help to show employees that their hard work is appreciated and valued.