Associate wearing a face mask training on an iPad in a store

5 Strategies to Reduce Retail Employee Turnover

How To Reduce Your Turnover Rate and Keep Employees Engaged In-Store

  • By Sarah Murphy

The retail industry is notorious for having a high employee turnover rate, and COVID-19 has only exacerbated the problem, putting additional pressures on employees and employers alike during an already difficult time.

Employees are on the front line, risking their health to serve customers every day. Employers face demands for increased pay and benefits in the face of declining foot traffic and costly safety measures. And many companies are struggling to keep up with evolving local regulations while maintaining sales and satisfying customers. 

But despite all of the extra challenges presented by COVID-19, it’s still crucial for retailers to find ways to reduce employee turnover.

To help, we’ve compiled a list of strategies to help retailers combat turnover during COVID-19.

But first, let’s examine what exactly retail employee turnover is and the problems it creates.


What Is Employee Turnover?

Employee turnover refers to the number of staff who leave their employer within a specified period (e.g., one year). 

Reasons for employee turnover include termination, job transfers, resignations, and retirement, among others. In many cases, the employee who has left will need replacing immediately so that a store can continue functioning properly.


How Do You Calculate Staff Turnover?

To calculate your employee turnover rate, select a specific period, then divide the number of employees who have left during that time by the total number of employees who still work at the store. Then, multiply that number by 100 to figure out the percentage. 

For example, if you have 100 employees and 45 have left in the last year, your employee turnover rate is 45%.


Why Is Employee Turnover Bad?

Employee turnover has several detrimental effects on a retailer, including increased financial costs.

Some of the monetary costs incurred include:

  • Severance/unemployment pay to the departing employee
  • Overtime pay if other employees need to cover shifts suddenly
  • Recruiting fees to replace an employee
  • Pay for trainee shifts, as well as staff to lead the training
  • Loss of sales due to new, less experienced employees

Beyond financial repercussions, employee turnover can also cost additional resources, such as time to upskill or train new employees. Staff turnover can also affect customer loyalty, especially if someone leaves who had a great rapport with customers.


Why Is Employee Turnover So High in the Retail Industry?

Compared to other industries, retail has a high employee turnover rate, approaching or exceeding 60 percent in the last few years.

That’s a lot. 

Some of the reasons often cited for causing such high turnover in the retail industry include:

  • Relatively low wages
  • Lack of benefits programs for part-time/temporary employees
  • Unfair or unclear expectations
  • Insufficient training
  • Physical demands of retail (i.e., standing for long periods, lifting)
  • Difficult hours (i.e., weekends, evenings)
  • Lack of upward mobility/future opportunities

Luckily, there are various ways to identify and fix these problems before they lead to an increase in employee turnover. 

How to Reduce Employee Turnover in Retail
store manager training an employee to reduce turnover

Use these strategies to not just build, but retain a strong and dedicated workforce. Because when your employees are engaged and believe in the company they work for, they will be more productive, stick around for longer, and increase sales.


1. Hire the Right Person from the Get-Go

It sounds obvious, but hiring the right person for a job will make everyone’s life a lot easier. Do your due diligence, and take advantage of the recruiting resources offered by your company, be it an HR department or through recruitment software, to find the best candidate.

Come up with a list of criteria for the ideal retail employee, and ask potential hires questions that demonstrate how well they match that profile. 

Personality is a huge component of successful sales, so if someone is quiet and shy in an interview, it may indicate how they will behave on the sales floor. Another candidate may be very outgoing and enthusiastic but lack any substantive retail experience. In most instances, it’s easier to teach someone how to complete retail-related tasks than it is to change their personality entirely.

Experience does count for something, though. But remember that it’s important not to hire someone who is under-qualified or overqualified for a position. If employees are under-qualified and don’t learn quickly, productivity and sales could suffer; if they are overqualified, they may get bored and frustrated by not having enough of a challenge.


2. Provide Thorough Onboarding

Once you’ve selected the right person to fill a position in your store, it’s time to integrate them with the existing staff. 

Onboarding is key for teaching new hires rules, procedures, and best practices, but it should also make them feel part of the team. It’s in this initial phase where you can really set your new hires up for success. Thorough training will teach them the components of day-to-day tasks, and educate them about the larger, long-term vision for the company. Ensure they know how their role in the company can help further objectives and emphasize the different trajectories that their career could take.

Essentially, set out clear expectations, but don’t forget to inspire new employees by sharing your company’s greater purpose and future opportunities at your business for them to be excited about. 


3. Offer Ongoing Learning and Development

Speaking of future opportunities, employers should offer learning and development programs and encourage employees to participate. This can help them refresh existing skills, learn new ones, and gain valuable experience that can eventually help them stay with and move up through the company—from associate to shift manager, to store manager and (in some cases) even head office. 

A variety of speakers, workshops, team-building activities, and mentorship opportunities provide your staff with chances to improve their skills, network, and explore future career moves within the company. Of course, the COVID-19 pandemic has made this difficult, but there are still a lot of resources out there for retailers and their employees, whether it’s software that helps with training and sharing information or sessions over Zoom.

If you provide encouragement and tools for career progress, staff are much more likely to consider building towards a long-lasting career within your company.


4. Promote the Right Store Employees to Manager Positions

Promoting from within the company is a great tactic for ensuring retail employee retention, but you still need to make sure you’re promoting the right candidate for the job.

Just because an employee makes an awesome salesperson or is good at getting on-the-floor tasks done doesn’t mean they’ll make a great manager.

It’s often said that employees leave managers, not companies, so your store associates must be led by a manager they respect and like working with. A task-driven manager who doesn’t bother getting to know their employees personally will have a tough time making staff perform well, while a manager who tries to be more of a friend than a supervisor will have a hard time keeping productivity up.

Ultimately, a well-rounded employee who is approachable, organized, and can motivate their colleagues—and still knows how to make a sale—will likely make the best candidate for promotion to a manager role.

Take those skills into consideration when hiring internally, or test candidates out on a trial basis to see if they have what it takes for the job.


5. Provide Fair Wages, Benefits, and Perks

As the Retail Doc puts it, “No one wants to work harder so someone else gets a reward.” 

Managers and corporate employees may consider benefits and bonuses part and parcel of their job, but those kinds of rewards don’t always trickle down to frontline retail workers. 

So, if you want your employees to perform at their best and stay with the company for a long time, you need to offer them incentives.

It can be challenging to cover the costs of increasing pay or offering elaborate health benefits and paid time off, but these are often what employees want the most.

But many more affordable perks can also go a long way, such as in-store discounts, free snacks or drinks in the break room, special prizes, and flexible shift scheduling. 

And remember, praising your employees for a job well done shouldn’t be considered a “perk”—it’s a necessity. Simple verbal or written praise can make them feel appreciated by the company and encourage them to keep doing a great job.

Either way, by implementing some (or all) of these suggestions above, you can begin reducing retail employee turnover in your stores and building better teams.


About the Author

Sarah Murphy is a content marketing specialist with a background in journalism. She lives in Hamilton, ON, where she is mom to a 13-year-old wiener dog named Penny. When not watching bad reality TV, she’s probably chasing squirrels out of her garden or baking cookies.