DailyPay Platform
Small Business 
Cycle
Tips 
Perks 
High turnover rates in the retail industry can hinder success and outstanding customer service. Turnover disrupts the quality of service, adds expenses to a business’s bottom line, and can impact overall workplace morale.
With an outstanding customer experience being key to success, losing staff isn’t just an HR issue but instead company-wide.
Retailers are finding that traditional retention methods are no longer enough to satisfy a workforce seeking flexibility and immediate financial security.
As of March 2026, the average total separations rate for the retail industry was 4.1% compared to 3.0% across all sectors, according to the U.S. Bureau of Labor Statistics (BLS).
What Is Employee Turnover In Retail?
Employee turnover refers to the total number of workers leaving an organization over a specific period. In retail, it is essential to distinguish between the different types of separations to understand where your retention strategy might be failing:
- Voluntary Turnover: When an employee chooses to leave (e.g., for a better offer or personal reasons). This is the most common and controllable form of retail churn.
- Involuntary Turnover: When an employer terminates an employee due to performance or policy violations.
- Retirement: Natural exits from the workforce.
While often used interchangeably with “attrition,” turnover specifically refers to the cycle of losing and replacing employees, whereas attrition occurs when a position remains unfilled after an employee departs.
The separation rate is a workforce-related metric that measures the percentage of employees who leave a company within a certain period, similar to the turnover rate.
However, the separation rate focuses exclusively on the total number of separations, which can include resignations, layoffs, dismissals, and retirements.
Retailers face high turnover rates and a competitive labor market, complicating recruiting and retaining employees.
The Real Cost of Retail Employee Turnover
Low employee retention can negatively impact workplace culture and team bonding, reduce the overall company knowledge base, harm customer service, and rack up a variety of costs, which may include:
- Departure costs: Time dedicated to determining the last pay, severance benefits, and securing equipment such as company computers or tools.
- Lost production: Gaps in production or project progress when experienced staff members leave. Customer service and sales can also suffer when employees who are knowledgeable and engaged with clients and prospects depart.
- Overtime costs: A loss in production may lead to overtime expenses as more experienced staff fill in gaps.
- Recruiting costs: This may include hiring a recruiting firm or advertising service to find a replacement, selecting interview candidates, conducting interviews, handling background checks, and testing.
- Onboarding and training costs: Processing new employee data, integrating data into payroll and benefits systems, and training new workers on tactical job requirements, company policy, and culture.
Low employee retention can hurt your company’s culture, impact the company knowledge base, and possibly hurt your customer service.
Beyond these impacts, the financial impact can be even bigger. DailyPay’s employee turnover calculator can help you estimate your specific financial impact.
Retail Turnover Rate Statistics (2021–2025)
Retail continues to see higher-than-average churn compared to the national average. While the “Great Resignation” peak has leveled off, recent data from BLS shows the retail industry continues to outpace the average across all industries.
How To Calculate Your Retail Turnover Rate
To solve the problem, you must first measure it. To calculate your turnover rate, use the following formula:
Top Causes of High Turnover in Retail (and What Employees Really Want)
According to a 2026 Gallup survey, the top actions managers can take to retain employees include:
- Provide additional compensation/benefits: 30%
- More positive interpersonal interactions with manager: 21%
- Organizational issues: 13%
- Career advancement: 11%
- Improved staffing/workload/scheduling: 9%
- Less negative interpersonal interactions with manager: 8%
- Work location: 3%
- Other: 3%
How To Reduce High Turnover in Retail With an Employee Retention Strategy
Every company should know its employee turnover rate. Understanding your turnover rate is a great starting point as the rates vary even within the retail industry. This information will help to project the savings and also break down the types of turnover, which can be voluntary, involuntary, or retirement. Once you know your turnover rate, there are some strategies that can be applied to reduce it.
Competitive, Modernized Pay
Attractive and competitive pay not only involves how much an employee gets paid but also when employees can access their earned pay. In fact, 59% of DailyPay users stated if they were considering a new job, the availability of On-Demand Pay would influence their decision to accept the offer.
The availability of On-Demand Pay — also known as earned wage access — helps employees manage and overcome their financial stress, avoiding adverse effects on productivity and morale. Nearly three in four (72%) users say DailyPay helps reduce their stress.
Outstanding Employee Benefits
educe thIn addition to the standard benefits package that employees expect, a comprehensive benefits package that goes above and beyond competitors will give a hiring edge and contribute to employee appreciation and retention. Notably, 91% of users state DailyPay is one of their top three most-used workplace benefits.
Support Employee Financial Wellness
Employees are looking for ways to improve their work/life balance and reduce their stress levels. When employees are dealing with personal or financial stress, they may perform their jobs poorly or with less efficiency.
Employers can further help employees through financial wellness support. This can include personalized financial counseling, financial education courses, debt reduction programs, and support groups.
Additionally, companies can offer employee wellness programs that include fitness perks, work-life balance initiatives, and more.
Employee Growth and Development
Supporting employees in their career growth and development will help set them up for success.
According to Workday, a lack of growth opportunities contributes to why employees leave their job, with the biggest increase being in retail.
Employers should consider how they can assist employees in upskilling and progressing their careers within the company instead of pursuing outside opportunities to further their careers, such as leadership training courses and classes.
Rewards and Recognition
Recognizing employees for their hard work can play an important role in motivating and retaining employees.
Employers should consider how to improve their reward and recognition programs with meaningful rewards that tangibly help employees.
With Reward by DailyPay, you can recognize and incentivize employees with cash rewards in real-time. Reward helps employers leverage DailyPay’s power to increase retention and engagement even further while driving behaviors that matter most to their business.
Support Retail Staff and Increase Retention With On-Demand Pay
Employers must align their retention strategies with employees’ expectations.
Employers must invest in their employees with competitive pay, outstanding benefit packages, opportunities for career growth, and more flexibility in their work to increase engagement and employee happiness. In retail businesses, these higher levels of employee happiness and engagement lead to better customer retention.
Among those in the retail industry who previously looked for a new job, 56% have stopped or slowed their search since they started using DailyPay. Forty-nine percent attribute the change in behavior to DailyPay.Learn more about how financial wellness benefits from DailyPay can help. Book a demo.
All information herein is for educational purposes only and should not be relied upon for any other use. The information herein does not constitute the rendering of professional advice by DailyPay. DailyPay does not warrant the completeness or accuracy of any information provided to you.
1 BLS, 2026:DailyPay, 2020
1 https://www.bls.gov/news.release/jolts.t20.htm:DailyPay, 2020
2 Gallup, 2026:DailyPay, 2020
4|5|6 DailyPay Employee Experience Research, Arizent study commissioned by DailyPay, January 2026:DailyPay, 2020
7 Workday, 2025:DailyPay, 2020
8 Nasdaq, 2023:DailyPay, 2020
9 DailyPay Employee Experience Research, Arizent study commissioned by DailyPay, September 2023 :DailyPay, 2020
