According to the U.S. Bureau of Labor Statistics, in the era of great resignation, fully one-third of new employees quit after about six months. This is a high figure that must be addressed urgently if businesses want to resolve it. In particular, retail employee turnover is notoriously high, which can be frustrating for retail managers and business owners. This blog will show you four tips that will help you increase employee retention, satisfaction, and commitment.
The Cost of Retail Employee Turnover
The Society for Human Resources Management estimates that turnover for all industries in the U.S. is around 19%, while the 2018 average turnover rate in the retail sector was slightly above 60%. According to a 2020 Investopedia reports, for an hourly wage earner, in the U.S. making $8/hour can cost a business roughly $3,500.
High Employee Turnover is Expensive!
In addition, companies spend an average of $1,886 and 47.6 hours each year training hourly staff. Clearly, turnover is a waste of time, energy, and money, so retailers need to take measures to reduce employee turnover.
A retailer can reduce employee turnover by implementing the following tips:
- Provide a thorough and positive Onboarding process.
- Offer Ongoing Learning and Development opportunities.
- Promote the Right Store Employees to Manager Positions.
- Provide fair pay and benefits.
No single measure on its own will eliminate high employee turnover. However, research has shown that each of these measures will help improve employee retention!
Provide a Positive and Welcoming Onboarding Process
Onboarding is critical! During this time, a prospective employee is assessing whether or not to stay with a company. As much as 20% of a company’s turnover occurs in the first 45 days after a new employee’s start date.
Employee Onboarding Helps to Retain Employees
According to H.R. experts, employee onboarding is one of the most critical H.R. functions since it significantly impacts employee satisfaction, engagement, performance, commitment, and retention. For example, a 2022 report by Sapling H.R. noted that a positive onboarding increased the likelihood of an employee staying by 69%!
Engage Employees from the Start!
A positive onboarding process should be thorough and engaging. It should include a tour of the workplace, introductions to coworkers, a review of its policies and procedures, and a training session on the job duties. The goal of onboarding is to make the new hire feel welcomed, valued, supported, and most importantly, set up for success.
Best Practices checklist for new employee onboarding:
- Provide a warm welcome to the team
- Provide contact information of trainers and managers
- Include a schedule breakdown of their first day
- Provide a tour of the facility and their workspace
- Introduce the new employee to coworkers and managers
Key takeaway: A retailer can reduce employee turnover by simply making a new employee feel supported, welcomed, and valued.
Offer Ongoing Learning and Development
Career development and skills training opportunities contribute to motivation and job satisfaction while concurrently reducing turnover. Further, training leads to more significant employee commitment levels and a lower turnover rate. If retail employees see that the company is investing in them, they feel valued and more willing to remain.
Training and Development Will Decrease Employee Turnover
In contrast, an employer that does not focus on learning or career development will lose out on performance, engagement, and retention. According to LinkedIn’s 2018 Workforce Learning Report, 93% of employees would stay at a company longer if it invested in their professional development.
Training has two main constituents, new employee training and long-term development career development. For training and development to be successful, a company should:
- Clearly outline the goals of the training and development program.
- Ensure that all employees have access to training and development opportunities.
- Learning activities should recognize different learning styles.
- Evaluate the success of the program by measuring employee engagement, performance, and turnover rates before and after training
Key takeaway: a retailer can reduce employee turnover by taking an interest in their career development!
Promote the Right Store Employees to Manager Positions
A Gallup poll of over 1 million employed workers in the U.S. found that the top reason employees quit is due to bad bosses. What’s more, 75% of voluntary turnover was because of their bosses and not the job. Bad bosses force good employees to leave their jobs. Therefore, hiring or promoting the right people for management positions is essential.
Decrease Employee Turnover Through Leadership
Retail employees want store managers who are leaders, managers who will inspire them, who are fair and honest and will stand up for their team. At the same time, companies want focused, assertive, result-oriented managers who will act in the company’s interests.
Retail Employees Do Not expect a Manager to be Perfect.
There is no such thing as the perfect retail manager. However, on balance, a good boss is a good listener, has empathy, is a good problem solver, honest, supportive, and is a good role model.
Reduce Employee Turnover Through Trust
The key takeaway is that employees and companies need store managers and leaders who engender trust amongst the people they work for and with. When team members trust their employees and vis-versa, managers are more likely to empower their workers to make decisions about their work.
A Positive Work Environment Will Improve Employee Satisfaction
Also, a positive work environment where employees feel valued and appreciated can help reduce turnover and increase productivity. There are several things a retailer can do to create a positive work environment, including:
Retain Employees Through Empowerment
Employee empowerment reduces turnover by promoting a sense of ownership amongst employees. When employees feel a sense of ownership, they are more likely to be invested in their work and less likely to leave their job. Additionally, employee empowerment creates a positive work environment where employees feel heard and valued.
Key takeaway: A retailer can reduce employee turnover by managing employees in a way that builds trust, empowerment, and mutual respect
Provide Fair Wages, Benefits, and Perks
Research shows that in the era of great resignation, employers and employees put a new emphasis on compensation and benefits. For instance, a recent report published by Payscale research concluded that: “In 2022, organizations are worried quite a lot about attracting and retaining talent. With COVID-19 still raging, labor shortages are impacting production, and inflation has surged.”
In addition, the same report found that 66% of companies surveyed identify retention as the #1 reason to have a compelling compensation strategy.
On the employee side, a 2021 Gallup study found that 44% of employees say they would consider taking a job with a different company for a raise of 20% or less. Employees will be incentivized to stay in their roles, which saves potential expenses related to employee turnover. Employees are more likely to be invested in their work and less likely to leave their job when they feel paid fairly.
When developing your compensation strategy, consider the following:
- What are your company’s values/principles?
- What are the goals of the company?
- How do you reward individuals? How do you reward the team?
- How is value defined? How do you reward value?
- Is the current compensation strategy supporting your desired outcomes
Use the SMART Method
Use specific, measurable, achievable, and realistic, aka the “SMART” method, to evaluate your current compensation. For example, does the compensation system you have in place reduce employee turnover?
Key takeaway: Is your current compensation package reducing employee turnover? Is it reaching your desired outcomes?
To sum up, here are four tips that you can use to increase employee retention in your retail store:
- Ensure that employees feel like they are a part of the team and that their work is essential.
- Give them opportunities for growth and development.
- Create a positive work environment where employees feel supported and appreciated.
- Provide clear expectations and regular feedback, so employees know how they are doing.
If you implement these tips in your business, you’ll see a significant decrease in employee turnover rates and an increase in employee satisfaction and commitment.