Employee turnover is a great indicator of how healthy your business truly is. A little bit of turnover is normal; too much can be an alarming sign of deeper internal issues.
After all, your employees are the glue that holds your business together — so what happens when that glue starts coming undone?
In this blog, you'll learn what's behind skyrocketing employee turnover rates, how it's affecting retailers, and four strategies to combat it:
First, What's Driving Retail Employee Turnover?
Retail employees are the unsung heroes of the industry, but their daily challenges can take a toll on their motivation, commitment, and well-being. From frustrating customer interactions to unrealistic productivity expectations, to record inflation and stagnant wages, it's no wonder why the retail and hospitality quit rate is the highest of all sectors and is outpacing the national rate by more than 70%.
For one thing, it takes skill and patience to navigate difficult customer situations diplomatically, and excessive emotional labor can quickly wear down even the most dedicated employees. Beyond dealing with unruly customers, frontline retail employees also have to juggle numerous tasks — from stocking inventory to managing returns — in a constrained time frame. The constant stress of completing tasks without sacrificing customer satisfaction often leads to feelings of burnout and frustration.
Communication difficulties within the organization play a significant role in turnover, too. Misunderstandings between employees and customers, as well as among the staff themselves, can lead to tension and disengagement. Employees may feel undervalued when their voices aren't heard, and demotivated when their contributions aren't recognized. They may also feel disconnected from the larger mission of the company or not understand how their work contributes to the overall success of the organization, pushing them to look for more meaningful work.
Then, there's a newer phenomenon driving higher turnover — The Great Attrition. Even though "quiet quitting" has been a common theme in the retail industry for a long time, the COVID-19 pandemic sparked major churn in the retail industry, underscored by low pay and feelings of being overworked and undervalued.
Now, the next question is: what's this high turnover costing retailers?
The High Cost of Low Employee Retention
Considering that the total cost to hire a new employee can be three to four times the position's salary, high employee turnover is a notoriously expensive problem for retailers. Not only are there financial costs associated with recruiting, hiring, and training new employees, but there are also productivity losses due to the time it takes new employees to become fully effective.
Think about the value of retaining employees who possess foundational knowledge about your business: experienced employees can help train new workers for quicker onboarding and a more seamless transition. Losing these employees to turnover means losing the knowledge they've acquired over time, making it extremely difficult to replace their expertise.
In addition to the financial costs, high employee turnover can also tarnish a business' reputation. Customers may be hesitant to commit to a brand that appears to have a revolving door of staff. Plus, constant turnover can lead to low morale, a sense of uncertainty about the future, and a general feeling of instability in the workplace for employees who remain with the company.
Customer experiences can suffer as well due to high employee turnover. Staff who are still learning the ropes may struggle to provide the type of personalized, knowledgeable service that customers expect. Over time, customers may begin to view the business as unreliable and inconsistent, leading to a loss of brand loyalty.
So, how can businesses avoid the high costs of low employee retention? By finding the right balance between compensation and non-financial motivators like career advancement, morale, and more, which we'll dig into deeper in the next section.
Four Strategies to Reduce Retail Employee Turnover
Retailers with high employee retention rates have a serious competitive advantage — after all, happier employees make for happier customers, which translates to more sales and repeat business.
So, here are five strategies to help you retain your top talent and create a better workplace culture:
- Offer Pay and Benefits that Reflect the Current Market
Let's face it: it's hard to stay motivated when you're not fairly compensated. With wages that haven't kept pace with the cost of living, it's more important than ever for retailers to offer compensation packages that reflect what's actually happening in the market.
But it's not just about the paycheck. Benefits like a four-day workweek, holidays off, and paid time off can make a world of difference in an employee's life. By promoting work-life balance, employers can help their staff avoid burnout and improve their overall job satisfaction.
It's also essential to check in with your employees regularly: are they feeling overworked or overwhelmed? Do they have everything they need to do their job efficiently? By providing support and resources, you can help your employees be successful while also reducing stress levels. Finally, be mindful that mobile devices used for work aren't encroaching on employees' personal time — this enforces a break from work so they can recharge their batteries and enjoy life off the clock. - Make Onboarding and Training a Priority
Investing in your employees' onboarding and training is key to building a strong and lasting relationship with them. According to a study by LinkedIn, a staggering 94% of employees say that they would stay with a company longer if it invested in their career development.
The first step? Creating a smooth and seamless onboarding process. The idea is to provide the right information at the right time, making them feel included and welcomed without overwhelming them. This can include basic information about the company culture, the products offered, and the expectations of their role. Remember, your onboarding experience is their real first impression — get it right, and it sets the tone for a positive ongoing relationship with your employees.
From there, it's important to continue the training process, helping employees grow and develop in their roles. Encourage them to take on new projects, provide them with ample training opportunities, and show them a clear career advancement path. When employees see that there is room for growth and progression within their role, they are more likely to feel motivated and excited about their future with your company. - Keep Workplace Culture in Check
When you work in retail, it's easy to feel like just another face in the crowd. But creating a sense of community within your business can help make employees feel more connected, valued, and confident.
One way to accomplish this is by regularly communicating with your employees and providing them with feedback. Provide one-on-one meetings, surveys, and open communication channels to determine what's working and what needs improvement, and ask clarifying follow-up questions to prove that their opinions matter. By taking action on this feedback, you'll demonstrate that you value your employees' thoughts and are committed to creating a supportive work environment.
Another way to create a positive workplace culture is by celebrating stellar performance. When employees go above and beyond, make sure you acknowledge their hard work and show your appreciation. This can be done through public recognition, bonuses, or other rewards that are meaningful to your team.
Finally, reinforcing employee confidence is key to building a strong and motivated team. Retail workers often feel like their jobs are unimportant or menial, so it's important to remind them that they play a vital role in providing excellent customer service, creating a positive shopping experience, and ultimately, representing your brand. - Call in Brand Rep Reinforcements
Though more and more retailers are turning to the gig economy to fill gaps in their workforce, not all freelancers and contractors are created equal.
That's where ThirdChannel comes in — we offer a network of thoroughly vetted brand representatives who act as an extension of your brand. Each rep undergoes monthly training where they can ask questions and learn tricks, techniques, and special information about your brand, so they can effectively share their knowledge with in-store employees and find ways to keep them engaged, happy, and motivated to stay.
ThirdChannel's innovative retail platform also enables comments, likes, and suggestions to flow freely between brands, brand reps, and team leadership. By pinpointing areas for improvement, ThirdChannel's brand representatives can help retailers create a more positive workplace culture and retain top talent. They can even upload before and after pictures and data collected at store locations, providing a seamless conversation and a comprehensive view of the visit and employee morale. Plus, ThirdChannel offers surveys for new, existing, and departing employees to get a pulse on how your team is feeling.
Elevate Employee Retention with ThirdChannel
In short, high employee turnover rates can have devastating consequences, impacting your bottom line and making it hard to provide excellent customer experiences. But with ThirdChannel, you can create a positive workplace culture that inspires employees to stay and grow with your business.
Don't just take our word for it — schedule a demo and see why leading retailers trust ThirdChannel's retail software and network of over 250,000 brand reps to boost retention.