Recruiting employees to work in retail stores is the easy part; it’s convincing them to stay that can be grueling.

Turnover in the retail industry is notoriously high. For myriad reasons — everything from long hours and tedious tasks to the chance to earn a dime more per hour at the shop across the mall — retail employees suffer from a collective case of retention deficit disorder. Statistics reported earlier this year by the National Retail Federation estimate industry turnover at 58 percent for full-time associates and 114 percent for part-time employees.

Given the cost of recruiting, hiring, onboarding and training, retailers are understandably frustrated when an employee who has been with the company just a few short weeks or months decides to move on. The prospect of investing in an employee who departs before the season changes is unsettling at best, but return on investment is not the only concern: Customer service suffers when there are not enough associates to assist shoppers, process transactions or provide the knowledgeable insight that a seasoned employee can offer.

What can retailers do to increase the likelihood of employees sticking around for awhile? Some provide flexible scheduling or job sharing; others offer affordable health care, online training — even free snacks in the break room.

In this report, STORES looks at the approaches three retail companies have taken to keep employee turnover low.

Company: BURGERVILLE
Headquarters: Vancouver, Wash.
Employees: 1,400
Retention Strategy: Affordable Health Care

A 2005 employee survey spelled it out in black and white: The No. 1 concern of Burgerville workers was affordable health care.

“We bet that if we could find a way to make health care affordable for all our employees — most of whom are hourly employees — we could alleviate a huge concern and win their loyalty,” chief cultural officer Jack Graves says.

It was a sizeable bet — approximately $1.5 million — but it has paid off handsomely. Since it began offering an extended and improved health insurance plan, Burgerville has achieved a dramatic increase in employee retention and loyalty.

Prior to implementing the new plan, turnover rates hovered around 128 percent. In 2006, the first full year of the health care initiative, turnover dropped to 54 percent; today the rate is holding steady at 52 percent. Productivity and employee confidence are up, absenteeism is down and, by reducing turnover, Burgerville has conservatively saved more than $500,000 — capital the quick-serve chain would have had to invest in recruiting, training and onboarding.

Under Burgerville’s plan, employees who have been with the company for at least six months and work 20 hours a week are eligible for health insurance; it costs each employee $15 per month, or $90 monthly for family coverage. Burgerville’s parent company, The Holland, pays more than 90 percent of the premium for employees and their dependents.

The package, put together in partnership with Kaiser Permanente, has no deductible — a tipping point for employee acceptance, according to Graves. High school and college students, retirees and young moms working part time “are often on a tight budget,” Graves says. “What we learned, however, was that these employees were less likely to go to the doctor — even if they had some insurance — because they couldn’t afford the deductible.

“Offering affordable health care with a zero deductible was a game changer,” he says.

It didn’t happen overnight, however. “The program was so outside the box that people didn’t believe it at first,” Graves says. “We actually set up a field trip of sorts to a Kaiser clinic to demonstrate how it worked.”

Employee retention isn’t the only metric Burgerville uses to measure its return on investment. “With more skilled employees, our restaurants are running better and they look better,” Graves says. “The food is hotter and it’s served faster, too. There’s a renewed sense of pride and commitment.”

The changes are having a healthy effect on the bottom line, too; Burgerville reports a year-over-year increase in guest counts and a lift in sales.

“Being a local company, word spread quickly of our commitment to providing health care, and guests have rewarded us for that,” Graves says. The company has received substantial feedback from guests indicating that the care showed to its employees separates Burgerville from the pack.

“Many guests have written to us saying that it is this sort of program that keeps them committed to the Burgerville brand,” Graves says. “I’ve got the e-mails to prove it.”

Company: FINISH LINE
Headquarters: Indianapolis
Employees: 13,000
Retention Strategy: Hire Efficiently

Finish Line executives know a thing or two about winning. When it comes to hiring associates, the game plan is simple: pick the right people and give them the tools they need to learn.

Still, there’s a secret to the company’s winning ways that’s not so simple: Executives have a keen understanding of Generation Y, and they’ve developed recruiting and training initiatives that are in step with the values and expectations of this youthful demographic.

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