Nov 02, 2017

How Retailers Can Reduce the Negative Effects of Turnover

Without effective workforce management, retail turnover can be hard to avoid.

Encouraging engagement and its byproduct, loyalty, among hourly retail associates has always been an uphill battle for employers. But turnover rates have risen sharply in recent years as the demand for hourly employees has increased. As of February 2017, the U.S. retail trade separation rate alone stood at nearly 5 percent. With big chains like Walmart offering more lucrative pay packages and on-demand services like Uber drawing workers away from traditional service jobs, retailers face higher attrition as workers weigh their many options.

For retailers, the challenge becomes how to effectively reverse this trend and eliminate its repercussions within their own organizations.

The Business Impact of Frequent Hourly Employee Attrition

Retail turnover is never good for business – and the most significant consequence is the direct cost.

According to our study of retail stores, district and regional leaders, 92 percent agree that preventing the loss of even one hourly associate per month would drive meaningful profits. Further, 63 percent of managers feel the retention of that single employee could bolster monthly revenues by 6 percent or more. We also found that eight out of 10 managers cite turnover as a roadblock to achieving sales goals.

But costs aren’t the only repercussion of employee turnover. In an industry where efficient scheduling is imperative, high employee attrition can make this challenging. For retailers with high turnover rates, the constant influx of new workers and outflow of old ones makes it difficult for employers to easily manage schedules that accommodate their workers. Inefficient scheduling practices lead to dissatisfied workers, understaffing and additional turnover. Compounding the issue, high attrition means employees are less familiar with their company’s brand, products, and services. This lack of knowledge results in a diminished customer experience, causing business profitability and growth to suffer.

Minimizing Turnover and Mitigating the Fallout

The most sustainable way businesses can mitigate turnover is by prioritizing employee engagement and retention. By following these three strategic steps for managing turnover, retailers can significantly reduce the fallout that stems from it:

  • Simplify scheduling: Scheduling complexity is one of the main reasons retailers lose employees. As our research shows, 62 percent of retail managers have lost employees due to scheduling conflicts. But by implementing a centralized, modern digital shift management and communication platform, employers can turn scheduling into a transparent and collaborative process. With tools and processes that give associates a voice in scheduling (i.e., letting them share their shift preferences and volunteer for unfilled hours), retailers can boost morale and drive up retention. 
  • Optimize the onboarding process: In a turnover-heavy sector, retailers with cumbersome onboarding and training procedures will quickly increase their hiring expenses. Store leaders should examine the processes they have in place and look for ways to streamline them. Whenever possible, automate onboarding with videos, assessment quizzes and other tools. This allows employees the opportunity to more quickly and effectively learn and develop the knowledge and skills necessary to deliver an optimal level of customer service.
  • Prioritize clear top-down communication: Too often, retailers’ corporate teams are detached from frontline associates. Failing to forge relationships across both sides of the organization (through collaboration and recognition) can leave associates feeling undervalued, giving them little reason to stay for the long term. By prioritizing more direct communication with the frontline, retailers can not only show they’re invested in their workforce but also capture on-the-ground feedback to address strengths and flaws in-store processes.

For retailers, it’s all too easy to fall into a turnover trap: A few employees leave, others follow suit, and soon you have a reputation for attrition. While retailers can take steps to increase employee retention, they should also prioritize better turnover management. Employers that roll out a strategic plan that includes a digital workplace platform can successfully manage turnover and reduce its negative impact, minimizing unnecessary expenses and setting employees up for more rewarding long-term careers while driving up the customer experience and the bottom line.

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