High turnover rates can negatively impact the success of retailers. If retail employers have to constantly hire and train new staff members, this can hurt their bottom line and quality of customer service.
Retaining talented staff members can help retailers deliver consistent and outstanding customer service that leads to repeat business and sets them apart from competitors.
To help bolster their employee retention strategy, retailers must invest in their employees with valuable pay and benefits packages that align with employees’ needs.
Employee Retention Trends in Retail
Retail employers continue to struggle with retaining talent. According to the U.S. Bureau of Labor Statistics, the annual separation rate for retail in 2021 was 64.6% in comparison to the average rate of 47.2% across industries.
High turnover rates can quickly rack up costs for retail employers. According to benchmarking data from SHRM, the average cost per hire in 2022 was nearly $4,700.1
According to Mckinsey, a couple of the top reasons retail employees leave their employers include health & well-being and compensation.2 To complicate matters further, retail employees are considering leaving the industry altogether. Sixty-three percent of retail managers were thinking about quitting their jobs in the near future and many of them do not want to work in retail anymore, according to an August 2022 study by McKinsey3. Retailers should consider investments to improve manager satisfaction, benefitting both managers and non-managers alike.
Improve Benefits to Support Staff and Increase Retention
It’s important for employers to align their retention strategies with employees’ expectations.
Employers must invest in their employees with valuable pay and benefit packages, opportunities for career growth and more flexibility in their work to increase engagement and employee happiness. In retail businesses, higher levels of employee happiness and engagement lead to better customer retention.4
Retail employers should consider enticing employees with benefits other than increased pay, as even the proposed federal minimum wage of $15/hour is not attractive enough to entice applicants to open jobs, according to research conducted by Mercer.5
According to a DailyPay sponsored survey done by the Mercator Advisory Group, the annualized improvement in turnover rate in the retail industry was 24% for employees who use DailyPay vs those who don’t.6
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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 financial advice or other professional advice by DailyPay. No fiduciary obligation or duty exists, or is created, between you and DailyPay. DailyPay does not warrant the completeness or accuracy of any information provided to you.
1 https://www.shrm.org/resourcesandtools/hr-topics/talent-acquisition/pages/the-real-costs-of-recruitment.aspx:DailyPay, 2020
2 https://www.mckinsey.com/industries/retail/our-insights/how-retailers-can-attract-and-retain-frontline-talent-amid-the-great-attrition:DailyPay, 2020
3 https://www.mckinsey.com/industries/retail/our-insights/how-retailers-can-attract-and-retain-frontline-talent-amid-the-great-attrition:DailyPay, 2020
4 https://enterprise.plus.shopify.com/rs/932-KRM-548/images/FOC_PDF_FA.pdf:DailyPay, 2020
5 https://www.marshmclennan.com/insights/publications/2021/september/retail-talent-shortage-or-labor-shift.html:DailyPay, 2020
6 https://www.dailypay.com/mercator-report-2021/:DailyPay, 2020