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4 Tips for Identifying Employee Turnover Issues in Retail

Sep 28, 2021

How to Identify Employee Turnover Issues in Retail
Marc Gingras

Marc Gingras

SVP, Employee Experience Strategy

Creating a positive employee experience that helps in retaining long-term staff is difficult in the retail industry. That’s why it’s crucial to know how to identify employee turnover issues in retail early on and nip them in the bud.
Employee turnover refers to the number of workers who leave a company in a specified amount of time (i.e., one month, one year). The rate is calculated by dividing the number of employees who leave during a specific period by the total number of employees.
If the turnover rate gets too high, stores can start to notice a dip in sales, productivity, and engagement. There’s no magic number for an ideal turnover rate, but the lower the percentage, the better.
Having a low employee turnover rate means that you are retaining employees who have completed training and have gained experience at your stores over an extended period.
By retaining retail employees, you create a more knowledgeable and productive staff, and sales should increase at your stores the longer they stay.
But before you can identify the issues causing employee turnover in your stores, you need to be familiar with some of the reasons turnover rates are so high in the retail industry.

Why Is Employee Turnover So High in Retail?

Turnover rates include employees who leave a company for various reasons, including termination, retirement, relocation, resignation, or, in some sad circumstances, even death.

The most common reasons an employee leaves a retail position voluntarily are:

Pay: Many retail workers make minimum wage and seek opportunities where they can earn more.

Scheduling: Retail often requires employees to work weekends, evenings, and even holidays, making it difficult to accommodate personal circumstances.

Managers: If employees don’t get along with their superiors or feel mistreated, they are unlikely to have a positive work experience and more likely to seek other employment.

That said, it can be difficult and expensive to raise wages, give everyone flexible work schedules, and hire managers that everybody gets along with in-store—and certainly, nobody was expecting a pandemic.

COVID-19 brought the turnover issue into the spotlight, as many retailers grappled with forced closures and layoffs, while essential retailers that remained opened were faced with supply chain issues, surging customer demand, and employee health concerns. And as the world shifted to e-commerce in unprecedented numbers during lockdowns, outbreaks of the virus in warehouses reached terrifying numbers.

Data from the pandemic will continue to shape the workforce for years to come, but it’s understood that it has already spawned new turnover issues as retail workers have left in droves to seek less stressful jobs, return to school, or focus on caring for family.

Nevertheless, there are some straightforward steps you can take to find balance, improve the employee experience, and decrease your employee turnover rate.

How to Identify Employee Turnover Issues in Retail Stores

Once you’ve determined that your employee turnover rate needs to be improved, it’s important to weed out the issues that are causing the problem.

But where do you start?

Here are some tips for identifying the specific issues that might be leading to high employee turnover in your stores.

1. Run the Numbers

Start by taking a look at the hard data. Calculate a variety of turnover rates for your store by comparing different time frames (i.e., month, quarter, year) and different positions (i.e., salespeople, warehouse workers, managers, corporate). This way, you can see which positions are experiencing the most turnover.

(Spoiler alert: it’s part-time hourly sales employees. According to data from the Bureau of Labor Statistics, quit rates reached an all-time high in April 2021, and retail was the industry that showed the steepest increase.)

Once you’ve calculated turnover rates for specific periods, analyze any major events that occurred within a particular date range of the highest turnover rates. Events like the COVID-19 pandemic, the end of a school term, or the hiring of a new manager can all have a big effect on staff retention.

Paid sick leave and health benefits are crucial to retaining retail workers during COVID-19, so if you’re unable to offer these during the pandemic, prepare to find other ways to incentivize them. If you hire college student employees, keep in mind that they may be moving home for months-long periods of time in the summer. And if several store associates resign shortly after a new manager is brought in, it’s worth re-examining your process for hiring or assigning internal promotions.

2. Conduct Exit Interviews

There are mixed opinions on exit interviews, especially at the store level. Still, they can provide valuable information if the departing employee is willing to speak openly and honestly about their decision to leave the company.

Of course, challenges arise if an employee is leaving on negative terms. An employee who has had a bad experience with a company won’t want to devote additional time or effort to help their former employer.

But for employees who are leaving due to reasons like relocation, retirement, or a promotion, exit interviews can provide insight into the culture at the store level.

For these interviews to work, employees must know that they can speak freely without compromising future employment or references. Even then, prepare for the fact that many employees who decide to exit a job have probably already checked out mentally.

If multiple employees are leaving at the same time, anonymous written or digital surveys may also be useful. Though, keeping answers anonymous may prove tricky if only one or a few employees are leaving.

Be sure to review and analyze exit interview documentation regularly to see if there are persistent issues that staff bring up and need to be addressed at a store level.

3. Check In Regularly with Current Staff

It’s easier and much more useful to talk to your staff before they even think about leaving.

Check in with your existing store associates and managers on a regular basis, and really listen to the feedback they give. If action isn’t taken to improve the problems they bring to you, then they will be less inclined to provide valuable feedback in the future.

Allow your staff to speak with their colleagues and managers weekly (at a minimum) and iron out any issues as they arise.

If associates are shy to come forward, let them submit anonymously written suggestions to the manager, who can collect them into a weekly report to pass along to headquarters.

Solutions can often be reached that satisfy store associates, managers, and corporate, but for this to happen, there need to be open lines of communication between all levels of employees. Capturing real-time employee sentiment and being able to enact change in the moment can prevent potential problems from festering and strengthen the bond between employers and their employees.

4. Update and Rotate Responsibilities on a Regular Basis

If you’ve gone over your store’s employee turnover data and found that certain positions regularly need filling more than others, consider what can be improved about certain roles to encourage employee retention.

Take, for example, a store where the manager works Monday to Friday and always leaves an assistant manager or keyholder to open and close on weekends. That assistant manager or keyholder will likely become annoyed that they are left running the store during the busiest shopping times and are never given a weekend off. A store manager can solve a situation like this relatively easily by switching up schedules and making sure everyone takes on occasional weekend responsibilities.

In another example, a store might have trouble retaining receivers who process incoming product orders, enter them into the store’s system, and sticker them before reaching the sales floor. A manager who is always on the floor might not realize that the back room where the receivers work is poorly insulated, badly lit, damp, or just unpleasant in general.

By making slight improvements to the work environment or rotating staff members, so one person isn’t always stuck in the back for long periods of time, employees may be more likely to stay with your company for longer.

Final Thoughts on Identifying Employee Turnover Issues in Retail

Figuring out exactly why retail employee turnover is happening can be an arduous task, and there isn’t an exact science to figuring it out.

There will always be an element of trial and error when perfecting a system that works for your team. But the sooner you use these tips to identify the problems, the sooner you can get to work on finding solutions to reduce employee turnover.

By focusing on improving employee experience and keeping the lines of communication easy and open, employers will close the gap between corporate needs and employee expectations, while also creating an engaging work environment that employees are excited to be a part of.


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