How to Reduce Churn Among Retail Employees

Posted by Penn Foster on February 27, 2019

The retail sector is under siege. Ecommerce is invading the retail space and not even industry giants are immune to their attacks. Consider the fall of Sears and Toys R Us. While retailers can't prevent the rise of ecommerce, there is one threat they can control, employee churn.

Unfortunately, retail is notorious for high turnover rates and some business leaders are resigned to the idea that there's nothing they can do to buck the status quo. That assumption is just plain wrong. You can reduce churn among retail employees if you give employees what they need to succeed. That means quality training and a clear path forward.

The scope of the problem

Even though many companies are transitioning to at least a partial online presence, that doesn't remove the need for workers in brick and mortar stores. If anything, customer service is more important than ever. When customers can shop from the comfort of their couch, you have to offer them something special to get them to walk through your door. That something is a positive experience built on strong customer service. Your retail employees are on the front lines of the battle against ecommerce domination.

While some sources claim retail churn is as high as 60%, the most recent research from LinkedIn says that the real number is closer to 16.2%. While much lower than non-seasonally adjusted numbers, that rate is still worrying. It's more than 6 percentage points above the average churn rate for all industries. Of course, entry-level and seasonal jobs are at the highest risk.

When employees leave a retail job, many of them will abandon the industry. Of those who leave jobs in retail, only 35% get another retail position. The remainder transition to work in other industries.

Aside from the customer service problem, high employee churn also presents another obstacle for retail businesses. Onboarding new workers is expensive. Replacing an $8 per hour employee costs about $5,506, and the cost rises with the rate of pay.

If retailers want to succeed, they need to find ways to reduce churn among retail employees. The first step is understanding why employees leave.

Why churn is so high

Again, common knowledge is doing more harm than good here. Everybody knows that churn is high among retail workers and many people assume they know the reason. Seasonal work, unpredictable schedules, and difficult customers are all cited as reasons for high employee churn among retail workers.

While those factors certainly can play a role, research suggests a more universal culprit. Across all industries, career development is the number one reason employees leave a job. If they don't feel like they have a path forward, they won't stay. Employees in every industry crave growth, achievement, and security. If your company offers those things, employees are more likely to stick around for the long haul.

You might think that your retail employees are just clocking hours to get a paycheck, but they have the same wants and needs as employees in any industry. Knowing that, you should be discouraged to learn that only 50 percent of employees say their employer provides adequate career development opportunities.

Millennials in particular feel that training is important. In a survey by PwC millennials named opportunities for career progression and excellent training and development programs among the top three characteristics that make an organization attractive to them. With millennials making up the largest portion of the labor force, more and better training is a powerful retention technique.

How to offer quality training

Training should start from day one. A study by IBM found that new employees are 42% more likely to stay if they receive adequate training up front. So take a look at your onboarding process. Are you giving employees all the training they need to deal with everyday situations? What about less common issues? For example: Do they know how to deal with an unhappy customer? What to do if someone wants to make a return without a receipt? How to order something you don't have in the store?

Perhaps more importantly, do they have the soft skills they need to do the job well. Communication skills, teamwork skills and personal responsibility all make them better (and happier) employees. Instead of waiting for a performance review to talk about opportunities for growth, ask managers to flag these areas immediately and have resources ready for them to offer retail employees.

One of these resources is RISE Up, the partnership between the National Retail Federation Foundation and Penn Foster. The initiative encompasses a self-paced, mobile-optimized program designed for entry-level retail workers who want to pursue training and credentialing. Covering topics like customer care, sales and merchandising, and workplace safety, it serves as a wide-ranging introduction to the essential skills retail workers need.

Another great way to find out what training retail employees want is to ask them. When you consult employees on their skills development, they feel heard and valued. Ask them what they feel like they need to do their job. Is it conflict resolution skills, technical knowledge, or a better understanding of the safety rules and why they exist? A skills playlist can help you meet employee training needs as they arise.

Other ways to reduce churn among retail employees

You'll recall that career development was the number one reason why employees left a job. By offering clear career pathways for employees, you can show them that they have the potential for growth and advancement within your company. They don't have to look to other jobs or other industries.

While employees may all start on the sales floor or in the stock room, they can take many paths from that starting point. Find out what their interests are and provided training and educational opportunities that help set them up for success in:

  • Logistics and supply chain management
  • Merchandising and sales
  • Marketing
  • Operations management
  • General corporate
  • Franchise ownership

If you want to reduce churn among retail employees in your business, Penn Foster is here to help. We're a trusted partner of the National Retail Federation and we have a catalog of training options for retail employees at all levels. Contact us today to get started.