Employee Engagement Employee Retention

How to reduce employee turnover in retail: 11 actionable strategies

The retail industry is at a crossroads right now.

The effects of the pandemic and the Great Resignation have been more keenly felt in the sector than almost any other industry, with employees leaving their jobs in droves for other opportunities. 

Even as the economy has slowed down, retail has continued to struggle, with monthly quit rates as high as 4.1 percent as recently as January – a higher rate than before the pandemic.

While retail is traditionally a high turnover industry, it’s quite clear that the current churn cannot continue, and people leaders in the field need to work harder to retain staff in order to maintain a sustainable talent pool.

In this post, we’re going to explore some actionable steps you can take to not just reduce retail employee turnover, but to encourage the employees you have to grow and thrive in long-term careers.

Why is retail employee retention important?

As most people leaders know, the cost of turnover in any company is huge, and retail is no exception. It’s estimated that the current staff shortages are costing the sector as much as 230 days of lost productivity.

Of course, the employee turnover rate in the retail industry has traditionally been quite high, due to the short-term and seasonal nature of certain positions. 

Because of this, a lot of retail HR teams tend to see turnover as something that comes with the territory, and will often focus more on putting processes in place to high and train new staff more efficiently rather than retention strategies.

But just because turnover in the sector is naturally fairly high, doesn’t mean you shouldn’t work to reduce it. Having to constantly find, hire, and train new staff still costs thousands of dollars a year and hours of time, and improving your retention rates could yield massive gains for your company.

What’s more, what the industry has faced over the last few years goes far beyond normal retail attrition. In the US alone, quit rates outpaced other industries by more than 70 percent, and over 1 million retail jobs were left unfilled as of last year.

Put plainly, if retailers can’t find the staff to fill open positions, retaining the staff they have becomes a lot more crucial.

What is a good retail employee turnover rate?

Before we continue, you might be wondering how your own turnover rate compares to others in the industry.

Statistics on retail turnover can vary, with some sources reporting the average rate to be as high as 75.8% for hourly in-store employees. Even when adjusted to take into account the seasonal nature of some positions, turnover in the sector is still in excess of 60%.

While it’s important to be realistic about your chances of retaining staff – some, especially younger employees in entry-level positions, will simply reach a natural end point with your company – shooting for a turnover rate lower than the industry average is still an achievable goal with the right strategies. 

11 actionable strategies to reduce retail employee turnover

So, how do you reduce employee turnover in the retail industry?

In the current climate, it’s about more than just offering better pay and benefits. To really turn the tide, retail people leaders need to change their mindset, and work to create cultures that are more in line with the expectations of today’s employees, prioritizing wellbeing, experience and long-term growth. 

Here’s a few practical ways to introduce this kind of culture shift at your company.

1. Make sure your ‘table stakes’ are competitive

It might seem obvious, but one of the first things you should do when trying to figure out how to retain employees in retail is evaluate your table stakes. How do your basic pay, benefits, and work environment measure up to others in the sector?

While retail wages are traditionally at the lower end of the spectrum, you should at least be trying to offer pay ranges that are competitive within the industry itself. You should also look at what kind of benefits you can offer in areas that really matter to employees, such as health, RRSP matching, and PTO. 

Considering other, less traditional rewards options like recognition programs, EAPs, L&D stipends, and other perks that employees in other industries enjoy could also help reduce your retail turnover rate.

If the overall package you offer employees is better than others in your industry, you’ll have a serious edge in the market when it comes to attracting and retaining talent.

2. Sell retail as a long-term career

One of the biggest challenges that people leaders face when trying to curb employee turnover in the retail industry is perception. A lot of people tend to see working in retail as a short-term gig – a stopgap job with little long-term potential.

In reality, of course, there are lots of opportunities for growth in retail, with pathways to management across every department, and even potential to move into head office roles. As a people leader, it’s crucial to make these opportunities clear to staff. Highlight and showcase employees who have advanced to prominent positions in the company, and make sure every staff member is aware of the possibilities for long-term growth.

3. Treat in-person work as an pro, not a con

One of the biggest misconceptions about the current retail employee turnover crisis, and the frontline labour shortage in general, is that it’s largely caused by younger employees preferring to work remotely.

This isn’t actually true. In fact, Generation Z have been found to be the least interested in remote work of all generations, with a survey finding that 74% worried about missing the sense of community that an in-person work environment would provide. 

When you think about it, this makes a lot of sense. While older employees with families and other responsibilities are likely attracted to the freedom of working from home, younger workers are more likely to value the social aspect and connections that they build with co-workers. The fact that many in this generation spent their teens/early twenties in social isolation is likely to make them value in-person interaction more, not less.

Retailers can use this to their advantage, leaning into the camaraderie that employees have in the sector and using it as a selling point to both recruit and retain staff.

4. Treat every hire like a long-term hire

Retailers take on a lot of employees who tend to be more short-term hires, such as seasonal staff during the summer and the holidays, as well younger part-time workers who might work evenings and weekends while at school.

While most of these employees will have a natural end-point with your company, you should still make the effort to treat them the same way as you would long-term staff. Give them proper onboarding and training, offer opportunities to learn different skills and roles, and let them know about the long-term career options your company offers.

You might find that a few of these short-term hires come to see retail as more of a long-term possibility. Even if they don’t, you’re more likely to retain part-time staff for longer tenures, or have seasonal employees return next year, vastly improving the pool of knowledge and skills in your team. 

Not only that, but creating this kind of positive employee experience will help your employer brand, and allow you to attract more talent through word-of-mouth.

5. Create opportunities to learn all the time

One of the best ways to keep retail staff engaged and invested in their jobs is to keep giving them opportunities to learn new skills. 

You can work with store managers to try and ensure that staff aren’t just tied to one specific department or role, but given opportunities to cross-train and learn to handle different tasks and responsibilities. For example, make sure all of your floor staff are trained to work as cashiers, or give warehouse employees the chance to work in more customer-facing positions.

This will help make jobs less repetitive for staff and give their roles more variety, while also making your team more versatile and providing better preparation for employees who might move into management roles. It’s a win-win for both your team and your company.

6. Give managers the soft skills to succeed

While many people leaders are rightly concerned about retail employee turnover among more entry-level staff, they should also be looking at strategies to better retain managers. According to a 2022 McKinsey survey, two-thirds of managers in the sector were considering leaving their jobs, and were 1.75 times more likely to leave than those in non-manager roles.

This clearly points to issues regarding the level of support being given to managers in the sector, and a lot of that may come down to training. Too often, high-performing retail employees are promoted to management positions because they do their jobs well, but aren’t given sufficient training in the soft skills they need to be an effective leader.

Investing in training and resources to help your managers lead more effectively could make it easier to retain both them and the employees they manage, and help you create a better culture and work environment on the frontline as a whole. 

7. Give employees ownership and autonomy

The McKinsey survey mentioned above also highlighted a few specific drivers that were causing retail industry employee turnover. One interesting point brought up by staff was a feeling that they have a lack of control in how work gets done.

People leaders with experience in the sector might not be surprised that this is a problem. Retailers can often be very prescriptive in assigning tasks and directing how specific roles are fulfilled, leaving little room for both managers and other staff to take ownership of their jobs.

This is arguably in part because of the levels of turnover, as having very precise instructions for specific jobs makes it easier to train new staff more quickly.

If you really want to retain staff in today’s marketplace, though, offering them some autonomy in how they manage their own workloads, deal with customer issues, and collaborate with colleagues will be key to keeping them engaged. Today’s employees want more responsibility and room to find their own way, rather than micromanagement.

Changing your approach to give employees a bit more freedom can have some added benefits for your company, too. For one thing, frontline staff in stores are the ones who actually do the work on a day-to-day basis, and may have a better idea of what works in practice than those in head office. Giving them a little room might result in them finding more efficient processes and creative solutions to challenges.

Another benefit of a more autonomous working culture is that it will help you identify staff with leadership potential, who you can then fast-track towards advancement opportunities.

8. Offer as much flexibility as you can

One of the biggest challenges in retaining staff for retailers is that they can’t offer the same flexibility as jobs in other sectors. Where remote positions can allow people to work when they choose, retailers need to make sure they are sufficiently staffed at specific times, which can mean that employees have limited choice in how they set their hours.

However, limited flexibility doesn’t have to mean no flexibility. While you can’t allow staff to simply turn up whenever they feel like it, you can use flexible scheduling tools to make it easier for them to choose shifts, swap days with other employees, and create a schedule that fits in with their lives.

In some cases, retailers may even have advantages in this area, and be able to offer flexible working options that aren’t possible in other sectors. For instance, an employee who wants to do a 4-day work week but still work a full 40 hours might be able to do that much more easily in a retailer than in a traditional 9-5 office job.

9. Prioritize work-life balance for retail staff

Further to the previous point, one of the biggest untapped advantages retailers have is that, because it’s not a strict 9-5 job, employees have more room to prioritize their own work-life balance, and fit their work around their personal lives rather than the other way around.

For instance, working parents might find it easier to fit retail shifts around their child’s daycare hours, or around their partners’ work schedules. Staff who enjoy particular hobbies, such as team sports or events, can also schedule their work around them so they are free to pursue their passions. Once you allow a little flexibility, the possibilities are endless.

People leaders can also work to prioritize work-life balance for retail staff in other ways. For one thing, making sure staff are working a reasonable schedule, and not being overworked or forced to do overtime when they don’t want it, can have a tremendous impact on your employee’s wellbeing, and go a long way towards improving retention.

10. Set reasonable expectations for staff

On that subject, it’s also crucial to make sure that when your employees are working, they’re not being run ragged. Retail can be challenging, with employees often asked to work at a very fast pace, deal with difficult customer interactions, and even engage in very physically taxing work in some roles. All of this becomes even more difficult when stores are short staffed and existing employees have to pick up the slack.

As a people leader, you need to keep your employees’ wellbeing at the centre of your thoughts, and work with managers to ensure employees have reasonable workloads, are being given adequate time to rest and recover, and have enough teammates to shoulder the burden during busy periods.

11. Make your staff feel appreciated

Last but not least, one of the easiest ways to reduce employee turnover in retail is to make sure staff feel recognized and valued for the hard work they do. 

Retail can sometimes be perceived as a thankless job, especially among frontline staff, who don’t feel that management and head office understand just how tough their roles are and the challenges they face to keep everything running smoothly. 

Making sure your leaders are showing appreciation regularly, whether through a recognition program or by other means, can go a long way towards making employees want to stay at your company.

What’s more, recognition can also be a way to motivate frontline retail staff to go above and beyond in their roles, whether that’s by being more productive, helping other team members, or providing better customer service. 

In most retail environments, there are no incentives except at manager level, and this can often mean employees aren’t motivated to really excel. By recognizing them for doing so, you can make them more interested and engaged in their work. And if they feel like the rewards are there for their extra effort, they’ll be more likely to want to stick around.

Start your retail employee recognition journey with our free guide

Want to learn more about how to reduce employee turnover in retail using recognition? Check out Employee Recognition for Retail: The Complete Guide, where we detail:

  • Some of the key challenges facing retailers today
  • How employee recognition can help
  • Why most recognition programs don’t work for retail
  • How to build an impactful program for a retail environment

Click here to download your copy today:

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Transform your culture to retain employees in retail

Reducing employee turnover in the retail industry is no easy task. For many companies, it will require rethinking your company culture and approach to employee experience entirely.

For those that are willing to do the work, though, the rewards are there. Focusing on culture can improve retention, productivity, innovation, and countless other areas, and give you a sustainable competitive advantage to help move your company forward in the next decade.

In Culture is the Ultimate Advantage, we talk about how to drive this transformation at your company, and how recognition can help you do it. Download your copy here:

Culture is the Ultimate Advantage

Set yourself apart using the power of company culture. Stand out to new applicants and motivate your team to do their best work.

Skai Dalziel

Written by Skai Dalziel

Skai is the Co-Founder of Guusto. He leads the Customer Success Team, and loves helping HR leaders build workplace culture by sharing his experiences from working with thousands of companies.

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