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Retailers Now Face Higher Employee Turnover
Along with the other challenges facing brick-and-mortar retailers this holiday season, now there’s the issue of retaining workers. A Korn Ferry survey of HR managers at 53 major retail organizations found that 29% have seen an increase in employee turnover since the beginning of 2018.
The survey also finds that of all retail positions, part-time hourly store employees have the highest turnover rate, with an 81% average this year. That’s an increase from 76% in 2017.
“Retailers are in a Catch 22 situation this holiday season,” said Korn Ferry’s Craig Rowley. “While high consumer confidence and a strong economy mean year-over-year sales are predicted to grow, low unemployment means there just won’t be enough workers to fill retail positions. To combat the situation, retailers are in a bidding war for hourly retail workers, and they are giving existing workers more hours to fulfill the need.”
Although corporate positions saw the lowest turnover rates in the retail sector, the percentage reported by survey respondents was higher in 2018 (15.6%) than in 2017 (13%).
Respondents cited “better opportunities/promotions” as the No. 1 reason for departures in the retail industry, followed by more money and a desire for a more hours.
Asked what retailers intend to do to curb turnover moving forward, survey respondents cited “training” and “career pathing” as the top focus areas, followed by “better communications on the employee value proposition” and “changes to compensation packages.”
In terms of compensation, retailers surveyed by Korn Ferry predict around 3% merit increases, consistent with past years. However, in the face of increasing competition, many retailers are increasing starting wages for new employees.
More than a third of respondents, or 34%, said that they gave wage hikes to existing employees this year to put their salaries on par with increased starting wages. Ninety-five percent said the issue will be addressed by the end of 2019.
“Retailers this holiday season have to be creative when filling vacant positions, especially at the store level,” said Rowley. “To retain top employees, employers need to lay out clear career paths, offer training and pay competitive wages. It’s critical that employees feel nurtured and that they feel part of the organization, instead of just having a job.”
For comments, questions or concerns, please contact Paul Bubny
