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Why do Retail Employees Churn?

Amy Watts
Amy Watts

Employee turnover is one of the most pressing challenges facing retailers right now. Workers in this sector actually leave their roles at a rate that’s over four times higher than the average turnover rate in all other industries.

High churn rates impact retail businesses at every organizational level, impacting productivity, engagement and morale. Without a consistently engaged and agile workforce, brands are left ill-equipped to meet growing customer demands and respond to industry changes, dragging them behind the competition.

How to Retain your Retail Employees: The Ultimate Guide

In this article, we’ll be delving deeper into the current state of retail retention, and the reasons why so many workers in this sector quit. 

Jump to:

  1. No career progression
  2. Lack of connection
  3. No flexibility
  4. Poor onboarding
  5. Lack of ongoing training

Retail employee turnover

Retail turnover statistics

According to data from the Bureau of Labor Statistics, a staggering 682,000 US retail workers quit their jobs in July of 2021. While the average industry turnover rate sits at around 63%, retention becomes even more tricky when you look at hourly employees.

In-store retail associates leave their roles at a much higher rate than those in managerial or office positions, with a turnover rate of over 81%. In fact, more than 50% leave within the first 120 days of joining.

Consistently high churn rates lead to big losses for retailers, both in terms of hiring costs and productivity. Human Resources Today actually estimates that turnover costs retail businesses around $19 billion in recruitment and training costs, as well as 230 million days of lost productivity.

Reasons why retail employees churn

So, we know that turnover is a chronic issue in retail - but why? While the so-called ‘Great Resignation’ has widely been attributed to the growing desire for flexibility and work-life balance among white collar workers, the reasons behind mass churn among retail employees are slightly more complex. 

Hourly employees experience an entirely different working day, and face a very distinct set of challenges. Failure to understand and cater to these differences puts businesses at a high risk of losing even their best talent. 

Here are some of the main drivers of churn among the retail workforce, backed up by research.

1. No career progression

Career development is top priority among today’s workforce. 91% of employees who leave do so for growth opportunities, while over a quarter of Gen Z and Millennial workers planning to change roles in the next two years blame a lack of progression and development in their current position.

One might assume that the retail sector is more suited for ‘casual’ workers, with minimal opportunities to progress and move up the career ladder. However, it’s not that there isn’t room for growth. Often, store employees simply aren’t made aware of the opportunities available to them, or given access to the tools they need to develop their skills.

Without a clear framework for progression, people feel less attachment to your business and its values. If your workers can’t visualize a long term career at your company, they become less motivated to perform at a high standard, and less likely to stick around.

2. Lack of connection

Feelings of isolation are a major driver of churn in the retail industry, where workers are often widely dispersed and feel a lack of connection to the company they work for. According to research by Nudge, 38% of retail associates don’t feel heard by their employers and 41% say their feedback to headquarters isn’t consistently heard or acknowledged. 

In a sector that’s notorious for unsociable hours, minimal benefits and difficult customers, employers need to bridge this communication gap and unify employees around a common goal or these reasons alone will be enough to quit. 41% of retail workers hardly ever look forward to going to work, while one of the top factors causing talent shortages in this industry is burnout and poor mental health. 

This lack of connection is often a result of new employees not receiving enough support from management after they’ve been onboarded. With no centralized communications or visibility of headquarters, or even other branches, many workers are left feeling completely alone in their roles and therefore more susceptible to churn. 

retail employee churn

3. No flexibility

Many people have begun to rethink their approach to work as a result of the pandemic, and the retail sector is no different. Hybrid working may have once seemed impossible in an industry that’s historically been characterized by strict shift schedules, but a flexible work setup is fast becoming a priority when it comes to retaining employees.

More than 25% of retail workers say they would take a 10-20% pay cut in exchange for a more flexible work arrangement, and 80% say they would be more loyal to their employers if they had the option to work more flexible hours. Considering that these workers have often had to work during weekends and holidays rather than spending time with their families, the attraction to a more flexible schedule is unsurprising. 

The rise of hybrid retail has led many companies to begin experimenting with flexible working arrangements for their employees, with brands such as Apple even allowing their ‘Geniuses’ to support customers remotely. Retailers who fail to listen to their employees' needs and incorporate more flexible work options into their operation run the risk of their store workers looking elsewhere for a role that better suits them, and their schedules.

4. Poor onboarding

Often overshadowed by the above factors, a poor onboarding experience can be detrimental to retention. The retail industry in particular is plagued by a lack of consistent, quality training at the beginning of the employee lifecycle which leaves employees with minimal support or information. In fact, 32% of retail workers report not receiving any formal training at all.

The retailers that do provide training at the onboarding stage still tend to rely on outdated methods such as in-person training sessions which can vary extensively in length and quality depending on the trainer. This makes it difficult to standardize information and results in inconsistencies from store to store, meaning that many employees are left uninformed and unable to perform at their best.

These onboarding methods are also failing to engage retail workers and ensure that they retain important information - 44% report that training takes too long to complete, while 26% remember less than half of their training just thirty days after the session. 

Poor onboarding ultimately leaves new starters without access to the right information and support, making them two times more likely to look for other opportunities. 

5. Lack of ongoing training

In an industry as fast-paced as retail, training must extend beyond the onboarding stage. Employers need to keep their workers up to date with new policy changes, updated product information and safety procedures if they hope to maintain productivity, yet many retail businesses fail to keep their dispersed teams informed. 

Inadequate ongoing training results in store associates being ill-equipped to provide the best possible service for their customers. 28% say they are unable to find information quickly enough to help shoppers, which not only impacts customer ratings, but also demotivates sales assistants who want to hit store targets but are held back by clunky processes. 

This also extends into other areas of operations. Many employees are often prevented from taking on extra work or covering shifts in other departments as they aren’t trained to do so, leading to increased staff shortages and frustration among workers looking to maximize their income. Lack of training also impacts safety and compliance; without regular role-play training on dealing with conflict or misconduct, workers are left vulnerable and unsupported.

Failure to combat these challenges through ongoing training risks alienating, and eventually losing, these key frontline workers.

Navigating Business Challenges in Retail and Hospitality: Insights and Strategies for 2024

How to better retain your retail workers

Curbing high turnover rates may seem like an impossible task, but there are a number of key strategies which can be implemented in order to better engage and retain your retail workforce.

The key lies in understanding your workers, and what drives them. In our comprehensive guide, How to Retain Your Retail Employees, we cover everything you need to know about retail employee retention, including:

  • The causes of high turnover rates in retail
  • How to track and monitor your retention rate
  • Effective retention strategies for the retail workforce

Download now

One of the key proven strategies for better engaging and retaining deskless workers is providing better quality onboarding and ongoing training. eduMe’s mobile training solution provides frontline workers with seamless access to relevant, bite-sized information, empowering them to learn within the flow of work and provide a consistently high quality experience for customers.

Already trusted by brands such as Uber, Marriott and Vodafone, eduMe’s mobile learning platform helps deskless businesses to better engage, inform and retain their dispersed workforce. 

Get in touch now to see how we can help improve your retention rate 👇