Why Retail Turnover Rates are So High and How to Improve Them

May 7, 2021

There’s a reason that employee turnover is a crucial metric for organizations to track. It’s costly, disrupts customer experiences, and interrupts productivity. Every employer is concerned with minimizing turnover, but that’s especially true in the retail sector, where turnover often exceeds 60%, compared to just 15% across the rest of the U.S. economy.

So why are retail turnover rates so high, and what can we do about it? 

The retail sector faces a series of unique, built-in obstacles that lends itself to poor employee retention and a high staff turnover.

Low Wages and High Competition

It’s no secret that the retail industry doesn’t often pay well. The retail industry is known for relatively low salaries and a competitive job market. Of course, money isn’t everything to store associates, but it can be an effective motivator for staff to leave, particularly in a space with high burnout and competitive employment opportunities available.

Of course the obvious answer to this challenge is bonuses and salary bumps to reward excellent employee performance… But that isn’t always an option in the retail sector industry, an industry where margins can be low and sales can be volatile. Perks and discounts are great offerings, but there are a bunch of competitive rewards available from other employers.

That’s why it’s important to make sure you hire the right people from the onset, and commit to their onboarding and training. Finding the right match, and then maintaining a channel of communication with those workers will keep employees engaged and loyal. 

Lack of Development

Retail is the most populous job in the continent. The retail workforce is an incredibly diverse, multi-generational community.

Your frontline workers and the teams at HQ all have something in common: they want to learn and grow in their careers.  We love that the industry is a huge stepping stone for absolutely anyone to gain work experience, make meaningful connections, and accelerate business and career goals.  From first-time, entry-level workers to lifelong retail leaders, your employees are showing up for more than just a paycheck. 

That’s why it’s so important to make it a priority to define clear career paths for every level of your organization and invest in professional development. 

Lack of Recognition

Beyond discounts, perks, and the occasional team coffee run to brighten a team’s Monday morning, a cheaper alternative to boost the morale of retail staff is public recognition. 

Recognition of a job well done is an effective way to increase productivity, and a simple “thank you” from a manager can go a long way to making retail employees feel valued and respected. 

In addition to making sure your staff feels appreciated at work, it’s crucial to communicate a sense of purpose. We know that the most successful retail companies ensure that their employees know the deeper meaning of their work, and how even the most mundane tasks ladder up to a greater mission. 

Keeping a pulse on the happiness of your retail employees, communicating how their work translates into something bigger, and recognizing their good work will go a long way. 

Misalignment

Your store employees are juggling countless tasks, especially in the wake of a year of the pandemic. There is a huge amount of information hitting stores, all while handing the usual tasks that are necessary to keep the store running and serve customers well. Today, only 29% of the direction sent from HQ stores is executed correctly, across the entire retail industry. 

This misalignment of store directions can lead to frustration and burnout. Engaging employees requires a complete organizational alignment. We’ve been there in the trenches, too, and we understand that this lack of execution isn’t the fault of stores. Most retailers just haven’t given store teams the right tools and information that they need to be successful. 

We have seen, time and time again, that misalignment and inconsistent store execution always comes down to unclear communication.

Retail leaders must not only recognize their employees, but also to listen to their frontlines and commit to empowering their staff. This requires a leadership philosophy of being in service to stores and listening to what people need in order to get the job done better. Retail companies must learn what’s working and what’s not. 

Setting up your teams for success means empowering stores to effectively prioritize and plan. That  could mean providing information to the right role or location, or making information more accessible and available so that employees can spend less time searching, and more time executing. 

Employee Engagement is Critical

At Zipline, we believe that there is a magic sauce that fosters the growth and success of retail store associates. With effective task management and communication, you can keep employees engaged, aligned, and ultimately, happy. 

It’s no secret that happy employees result in happy customers. Once you set your retail employees up for success, you can ultimately provide your customers with great shopping experiences. 

An engaged workforce results in more productive employees, more satisfied customers, and  reduced turnover. 

That’s why Zipline cares so deeply about employee engagement. By communicating clearly with the field, retailers can connect to-do’s with a deeper brand story that tells associates in stores why their work matters and how they contribute to the success of the company as a whole.
Zipline was built to solve the unique challenges of communication in retail organizations. Reach out to learn more about how you can stop communicating with your stores and start communicating with your people today.

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