Talking Turnover

High employee turnover rates in retail have been the norm for so long that it’s simply considered a cost of doing business. But industry leaders are realizing that it doesn’t have to be this way, and an aggressive training/development program coupled with a culture that fosters loyalty can keep people from jumping ship.

STORES recently caught up with Shawn Boyer, president and CEO of SnagAJob.com, the nation’s largest job site for part-time and full-time hourly positions, to discuss the state of retail industry turnover.

The industry has always had a fairly high turnover rate. Where do things stand at the moment?
I think the last report we had from NRF showed turnover at 110 percent, but it’s trended down and over the past year our major clients have seen reductions of 20 to 30 percent. So right now, it seems to be in the 75 to 80 percent range.

Is the economy the primary reason?
Definitely. This is the lowest turnover we’ve seen since 2000. People are skittish about leaving their jobs, whether or not other opportunities are out there. In the past people would leave a job if they didn’t like their schedule or had some other issue because they expected to land another one in a week or two. That’s not easy to do right now.

What happens when the economy turns around?
Turnover could go back to historic levels. I don’t think it’s going to pop back to the 110 percent level any time in the next three to six months, but we could probably be back there within a year.

How can retailers keep turnover down?
I’ve seen a number of things being done at well-run organizations that keep rates down, and in the end this has a direct impact on the bottom line. One of the main things is flexibility — this is paramount to the hourly workforce. Think about a typical salary-level position as roughly 8:30 a.m. to 5:30 p.m. If you have to go to a teacher’s meeting or take the dog to the vet, you can always get to the job an hour early or make it up later in the day. But if you’re an hourly worker in retail and scheduled to be in at 8:30, you’d better be there.

Working Mother magazine always does a study of the top 10 places to work and they just did their first for hourly workers. The flexibility piece always comes to the top, along with benefits like health care and tuition reimbursement.

Are more companies being more flexible in scheduling?
I think so. They’ve recognized that the people who are the most loyal are the ones that have the greatest need for flexible schedules. Many of them tend to be working mothers. They may be able to work until 2:30 or 3:00 p.m., but need to be home when kids get off the bus. On the other hand, they may be the ones who can work the closing shift because their spouses are home to take care of the family. If you create a flexible situation, they will stick with you because it’s so hard to find it elsewhere. Working moms often turn out to be the best employees. The same is true for high school or college students who are trying to work around class schedules.

Generally speaking, is loyalty less prevalent among younger workers?
Part of the issue is generational, but it comes down to where a person is in their life stage and what the purpose is in having that job. A “supplementer” may need the money, but their priority is to their first job or their families. If push comes to shove and an employer won’t be flexible, they will go somewhere else. It’s the same with people in school — their primary purpose is to graduate, and they won’t let anything stand in the way of that.

Are more retailers coming to recognize the cost of high turnover?
Most don’t realize the bottom significance. There are more than 14 million people working in retail. If turnover is 100 percent and a new hire costs $1,000 — at a minimum — then that’s a $14-billion-a-year problem. And a number of studies have shown that costs can be as high as $8,000 [per position]. There’s a tendency to look at these almost as soft costs, but you have to connect the dots on the financial impact. If you’re able to move the needle by 10 percent on turnover, you can move the bottom line up by $1 million.

What companies have done a good job?
One that jumps to top is The Container Store. Their turn rate has hovered between 10 and 20 percent. Think of it as 80 percent less than the national industry average. It not only benefits costs and productivity, but think what it means in terms of customer loyalty when people can talk to the same person every time they come back to the store.