Employee Retention in Retail: 5 Ways to Keep Your Best People
Most people would probably agree: employee retention in retail leaves something to be desired.
Two years after the Great Resignation, the retail industry is still reeling. (See August 2021 when 721,000 retail workers resigned in a single month, more than any other industry.) Retail hasn't seen that shock of resignations in over 20 years. And employee retention in retail is still the worst of all industries.
But there is always room for a graceful recovery.
Based on our years of experience helping companies retain their employees, we’ve put together five employee retention strategies for the retail sector, geared toward helping you keep your best people.
How to improve employee retention in retail: 5 data-driven strategies
Improving employee retention in retail is a unique problem with a unique set of challenges. This is not a contained office job. Retail roles are the public-facing side of the business; every day is different and employees are faced with juggling multiple tasks and personalities in a constantly evolving environment.
As you work to improve retail employee retention at your company, consider these five, data-driven strategies.
1. Increase employee involvement
Since retail roles are typically lower-paying, entry level jobs, people tend to see them as a last resort or as temporary income en route to a 'real' job.
It’s time to change the idea of retail roles as a stepping stone towards a meaningful career of growth. But in order to do this, we need to give retail jobs their own purpose and fulfillment.
This means changing the involvement level of retail employees from people who show up at work until they get their university degree into valued company members with an active voice in the organization’s decision-making processes.
Everyone benefits in this situation because retail positions provide unique and useful first-hand insight into how your products land with your customers. Look for ways to involve retail employees by leveraging their deep knowledge of your products and customers.
Placing a higher value on this knowledge usually has a positive domino effect: improving the engagement of your retail employees trickles into improved customer satisfaction — they enjoy an engaged employee’s service. It’s a win-win.
2. Manage risk proactively with talent intelligence
Because your employees are out on the floor engaging with customers all day, it can be difficult to keep in touch with them in the same way that you can with office workers sitting in close quarters. This is especially true if you manage retail employees at multiple locations.
But this doesn’t mean retail employees are any less susceptible to the same attrition risks that affect office workers. Burnout, bias, disconnection, career stagnation, lack of recognition, compensation deficits: all of these can play a role in an employee’s decision to leave.
Using employee data you already have on hand, talent intelligence gives you detailed insights into each individual employee: who is most at risk of attrition, why they are at risk, and what you can do to fix the problem.
All of this takes place long before an employee gives notice, so you can take proactive steps based on each individual employee’s needs.
Praisidio, a leading talent intelligence platform, commonly helps companies reduce employee attrition costs by $10 million for every 2,000 employees.
3. Keep tabs on pay scale
Some retail roles, like cashier workers, are the lowest paying positions in America. In fact, 64% of retail workers don't earn a living wage. This reality makes holding a retail position unsustainable in the long run.
If the idea of raising wages for your retail employees makes you break out in a cold sweat, we get it. Margins are slim enough as it is. But think about it from the other angle: replacing employees who leave is costly.
Factoring in hiring, onboarding, and training, it costs an average of 50-60% of an employee’s entire annual salary to replace a single worker. Many companies with great retail retention rates have recognized this issue and raised their wages accordingly.
For example, Sheetz, a convenience store chain, increased their retail employee wages by over $78 million. This was done in incremental increases over the period of a few years.
A Sheetz employee told Great Place To Work, “Being able to stay working and get bonuses and raises is amazing. A lot of people have not had that with their jobs. I love working here and I would love to continue to move up in my position here at Sheetz.”
Here’s another place where talent intelligence can help. With talent intelligence, you can keep tabs on where each individual retail employee’s pay rate falls compared to similar employees within the company and within the industry as a whole.
With this type of real-time information at your fingertips, you can make strategic, data-backed pay increases that help retain your most valuable retail employees.
4. Improve onboarding
Employees unsatisfied with their onboarding are twice as likely to look for work elsewhere. But when onboarding goes, employee retention in retail increases by 82%.
Despite this, 49% of retailer workers say they felt unprepared by their onboarding. Improving onboarding for your retail employees is a great way to give you a competitive edge in the retention game.
What this looks like: take the time to figure out how your employees learn best and train them accordingly. They might be doers, or they might need materials to take home and study in peace.
Also, they're not just joining a list of tasks and skill sets, they're joining a team of people. Involving them socially or onboarding in small groups allows them to bond with co-workers. Combine this with mentoring for a sandwich of connection and support while they learn the ropes.
Lastly, remove any confusing, disorganized, or mixed messages from your onboarding process. Starting a new job is overwhelming enough without juggling guesswork and worrying about making mistakes.
5. Invest in training
We're used to hearing the warning, careful you don't want to be stuck in a retail role for life. But the reality is that staying in a retail role doesn't have to equate with being stuck. Retail roles can be dynamic positions where your employees develop valuable professional skills as their career develops upwards through your organization.
This is why training and development is so important (for retail workers as well as the rest of your workforce), because it flushes out any stagnation.
Unfortunately, according to Deloitte, the typical employee only gets 1% of a standard workweek to spend on training and development. Retail employees get significantly less.
Retail roles are incompatible with traditional learning. It takes half an hour to settle into a focused state, ready to learn. And juggling jobs and customers is incredibly disruptive.
Therefore, learning needs to be built into the retail workflow.
Try easy-to-access mobile learning that takes no more than 2 minutes to complete. Microlearning is easier to squeeze in between customers; it’s also easier to retain.
This may come in different formats depending on your employees’ learning styles. For example, retail workers are usually hired for their extroverted social skills, so making the learning social and connection-based could increase engagement.
Why employee retention in retail is so important
The national retail federation measured the average turnover rate for retail employees at over 60%. This turnover rate converts into over 230 million days of forfeited productivity and $19 billion in recruiting and training costs.
These are massive industry figures, but the daily implications on your retail workforce are no less stark. High turnover causes disruptions in your company and a poor customer experience. Understaffed teams create overworked employees who have less bandwidth for customers and the job.
This can quickly become a vicious cycle of employees quitting in waves.
How to retain employees in the retail sector with talent intelligence
Bottom line: improving employee retention in retail is critical. Retail employees leave at a higher rate than any other industry, and this costs companies a lot of money.
There are a number of strategies to help you improve retail employee retention. But the most important thing to remember is that to be successful, you have to be proactive. It doesn’t do a lot of good to address employee attrition after the fact.
Talent intelligence gives you the tools you need to stay ahead of the curve and solve employee retention issues before they become a problem.
Companies that use Praisidio’s talent intelligence platform have all the real-time information they need to improve employee retention in retail at even the largest companies. Praisidio clients commonly reduce employee attrition costs by $10 million for every 2,000 employees.
Book a demo to see how Praisidio can help your company retain its retail employees.