Every business faces the arduous task of hiring and keeping great employees, but it’s especially difficult in an industry with naturally high turnover like retail.
In fact, Bloomberg found that retail has been experiencing staff turnover at a rate of about 5% per month. Not only is that stressful, but it’s also expensive given that it costs almost $3,400 to find, hire and train a replacement every time a worker leaves.
In other words, employee turnover costs you time and money.
Part of the difficulty is that retail is a unique workforce. There are often part-time employees, full-time employees, seasonal workers, managers, and everything in between. Minimizing turnover across all these positions is important to grow your best talent and keep your business running smoothly.
While employees move on for a variety of reasons—some of which are out of your control—there are certain things you can do to minimize employee turnover and increasing employee retention.
According to a study on employee retention by Willis Towers Watson, more than 25% of employees fall within a high-risk retention category in the workforce. That means the beginning of the process—hiring—sets the scene for the weeks and years to come.
When you need employees sooner rather than later, it can be tempting to fill an empty seat or get someone behind the register as quickly as possible. But 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.”
Take advice from retail expert Anne. M. Obarski, who suggests this as a starting point:
“Great employees are not born, they are developed in a business atmosphere where training is stressed, individuality is encouraged and personalities are respected. Word travels about the work environment in all sizes of stores. The key to recruiting quality employees is promoting and possessing a positive work environment no matter how large or small you are.”
Be sure to create a concrete retail job title and job description so you know exactly what you’re looking for. Once you’ve gone through the process and found the perfect number of employees you need, it’s time to move onto training and retaining them.
Ensure Proper Training
Great training makes for great associates and managers, but unfortunately, training is often completed on the fly in a lot of retail environments. A successful onboarding program should provide trainees with an experienced mentor who can help them enhance their customer service skills in real time—during those critical first few days on the store floor.
If this is a manager, remember they also need to be properly trained and adequately supported in the role. While it might take a little more time to ensure everyone is on the same page, it will save you the headache of unsatisfied customers and inadequate staff.
Offer Career Advancement
Once you have that adequate staff, ensure they don’t feel stuck in their role with no chance for career advancement—unless they leave your business and find work elsewhere.
According to Willis Towers Watson, more than 70% of high-risk retention employees believe that they have to leave their organization to advance their careers. It’s key that you have regular discussions about opportunities within your organization, make a concerted effort to promote from within the business, and consider offering employees programs so they can learn new skills.
If your retail business offers opportunities for career advancement and education, it creates an opportunity to not only keep your employees, but also pick up those who are leaving previous companies for greener pastures.
Recognize Efforts and Reward Accordingly
According to CNBC, engaged and motivated retail employees bring in 69% more revenue than those who are not. According to the article, “Retailers that treat their employees as more than just an expense on the balance sheet tend to have higher retention rates, higher sales per square foot and lower store return rates.”
Consider offering sales incentives, adopting rewards for top hours worked, and acknowledging perfect attendance or safety as ways to show appreciation for employees. The point is to make them feel valued, because the more valued they feel, the more likely they are to stick around.
And while it sounds obvious, money can be a big motivator.
If more money is involved, employees are more likely to stay at their current job. Gallup found that “44% of employees say they would consider taking a job with a different company for a raise of 20% or less.” Increasing pay and offering bonuses are an important way to keep your best employees happy and decrease the chance of them looking for more money in other stores.
Maintain an Open Dialogue
It’s important to keep an open dialogue with your employees to determine their satisfaction and see if your efforts to increase employee retention are effective. This starts with regular one-on-one meetings to check in, get a feel for what’s going on and provide a way for employees to give valuable feedback and discussion.
Next, consider employee surveys, which have been done by large corporations for years.
These questionnaires—often conducted by outside surveyors—give employees an anonymous way to truly express how they feel about working for you. The caveat is that you have to be prepared to listen and have an open mind about the responses and suggestions from your employees.
And finally, it’s just a fact of retail that employees are going to leave. But it can be helpful to conduct an exit interview when they do to learn about their experiences with your store. It’s the perfect time to ask why they’re leaving, what they liked and disliked about working there and what they would have done differently.
The Final Word
In an ideal world, you would have a 0% turnover rate, but that’s not realistic for any business—especially a retail storefront. That’s why it’s important to focus on hiring and training the right people, rewarding the talent you have and offering your hard-working employees a way to advance within your business.
Remember to keep an open dialogue, as any information you gather from your staff will help create a better environment for current and future employees—which will help minimize employee turnover in the future.