Finding great retail employees isn't easy. So when you have an employee who's dedicated, hardworking, and customer service oriented, you want to keep them as long as possible. Retaining employees for the long term is possible if you give them clear career pathways.
Opportunities to grow and develop their careers let employees know that there is room for them inside your business. They won't feel the need to look outside for new opportunities.
Turnover rates in retail
A survey by LinkedIn found that retail has the second highest turnover rate of any industry at 13%. Only software technology loses more employees each year at 13.2%. Certain roles within the retail industry have even higher rates. Retail salespeople turnover at a rate of 19.3% according to the survey. Worse still, a survey from 2016 found that hourly store employees have turnover rates as high as 65%.
While the trend toward online shopping may mean some retailers need fewer customer-facing employees, there are still many roles to fill. This task is made more difficult by the competitive job market.
It costs about $5,506 to replace an $8 per hour employee and the cost rises with rate of pay. Since replacing an employee is expensive and good employees are hard to find, it's in your best interest to keep them as long as possible.
Keeping entry-level retail employees gets harder when they can make the same salary with a clearer career pathway elsewhere. Some retailers, like Target, have increased their internal minimum wage in an effort to attract and keep great employees. Higher hourly rates might be a good start, but they're not the only solution. Pay is just one of the benefits employees consider when deciding whether to stay in their current job or look for something new.
According to the Work Institute's 2017 Retention Report, 22% of employees leave for career development reasons. It was the number one reason employees cited for leaving their jobs. By mapping out a clear career pathway, you can remove one of the biggest drivers of employee turnover.
A path for every employee
Having just one career path for your employees doesn't make much sense. First of all, there may be only one or a handful of management positions but there are dozens or hundreds of front-line retail workers. It's clear that they can't all become floor managers. Second, employees have different skills and interests.
Even if everyone starts in the same place, you can create customized paths that allow employees to use their skills and pursue their interests. Employees will be more likely to stick around and they'll do a better job in the position. Everybody wins.
Here are some pathways that employees might travel:
- Logistics and supply chain management
- Merchandising and sales
- Operations management
- General corporate
- Franchise owner/district manager
Your employees may all start as salespeople or stock associates but they can choose many pathways from that starting point. By giving entry level employees training and educational opportunities, you can set them on a pathway to a more responsible job in retail.
Sure, you could hire people from outside your organization to fill management and supervisory level roles, but why would you want to? Your existing employees already know the company and are committed to your success. Having started in an entry-level position, they have a deep understanding of the company that would take an outside applicant months or years to build.
Creating customized career pathways doesn't mean you need a completely unique path for each and every employee. It just means that you have a path for every employee to follow. The paths you lay out should help them move from an entry level position as a part-time sales clerk or stocker to a more responsible and higher-paying role.
Mapping the path
A well-mapped career pathway provides a long-term strategy and short term milestones. Every employee can create their own pathway with the help of their managers and the human resources department. Together employees and leadership should follow this four-step process:
Start by helping employees to assess their own level of knowledge, skills and abilities. Invite them to share their goals and interests with you. Managers can also weigh in with their observation of the employee's abilities and areas of expertise.
Help employees understand what positions might be available and what possible career pathways they might want to pursue. Then Identify positions within the organization that align with the employee's interests. These might result in a lateral move or promotion. It's likely that the employee will need new skills or additional training to make this shift.
Connect the employee with the training and education necessary to pursue the positions you've identified together.
Repeat steps one through three yearly. Check in regularly throughout the year to find out how the employee is progressing through their training or education. Offer guidance and resources to keep everyone on track.
Yearly re-assessments are important because employees' interests and desires may change over time. By giving them the chance to redraw their map, you're allowing them to grow without feeling like they've outgrown your organization.
How to prepare employees for new opportunities
Your employees may have little education when they take their first job with your company. Many retail employees are working part time while in high school or college. According to research by Emsi, 40 percent of retail workers are enrolled in school. Rather than seeing this as a detriment, you can view it as an opportunity.
You have a whole workforce of employees ready to learn and eager for new opportunities. If you can connect them with the education and training that will help them pursue a career path, their retail job could become a life-long career -- and you could have a life-time employee.
Penn Foster can help. Our selection of career diplomas, courses, and certificates can help every employee build their skills on their timeline. Your retail employees can access courses like English Comprehensive Skills in Reading and Writing or Public Relations. They can prepare for a leadership role with a Retail Supervisor career diploma or earn an associate's degree in marketing, human resources management, or retail management.
Contact Penn Foster to start mapping out retail career pathways for your employees.