How can the retail industry overcome its retention problem?
The retail industry has long been associated with higher-than-average employee turnover. The British Retail Consortium’s quarterly survey for Q1 2023, which accounts for one in five jobs across multiple sectors within retail, reported an average turnover rate of just over 50%. And the retail businesses we speak to are still struggling with retention.
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What are some of the challenges retail businesses are facing, and what can employers do differently to improve retention?
The average staff turnover rate in the retail industry in Q1 2023 stands at over 50%.
Retail's retention challenges:
Skillset vs mindset
In a candidate-short market where retail businesses can’t always hire the skills they need, it is important to develop existing talent. But retailers often lack ideas for how best to develop talent, and the mindset is one that fails to place enough value on skills development for employees at every level.
This mindset means that line managers are not given the training, resources and incentives to engage employees and support their career progression. As a result, workers on lower pay may not see a long-term career within the business and leave to secure more pay and improved benefits in a similar role elsewhere.
An 'us and them' culture and mentality
An ‘us and them’ mentality can exist within retail, with ‘us’ being the lower paid shop or warehouse floor worker and ‘them’ being the managers and leaders inside the store and business’ headquarters. If there is a gulf between retail leaders and employees, employees will not feel they can ask for professional development, and if there is no clear career path for employees, they will leave.
Judging workers on job titles alone
Many retail businesses struggle to see the medium to longer-term benefits of employee mobility, redeployment and reskilling. This is because they fail to see beyond an individual’s job title and the confines of what that role involves, and only see the risks associated with investing time and money in training people who then leave.
What can retail businesses do differently to retain talent?
Secure senior leadership buy-in for internal talent investment
There are costs associated with reskilling and retraining employees, but those costs are generally lower than recruiting new skills externally. For any mobility strategy to be successful, senior leader buy-in is essential.
Explore how leaders can provide mentoring or sponsorship to support employee engagement and career development. If employees are engaged and see a future with their current employer, the business is more likely to retain them.
Use data-driven insights to structure a mobility strategy
Use exit interview insights and employee survey data to learn what employees need to feel valued and inspired. What causes them to leave? Do they want more opportunities for career progression? Is there an issue with workplace culture?
Do they want more flexible working options than are available? Use data-driven insights to steer a mobility strategy and/or redeployment programme where employees can build skills and a fulfilling career within the business.
Invest in line managers as the enablers of mobility
Businesses will largely rely on managers to lead the execution of an employee mobility strategy, but managers will require support to do this. Give managers the training, time and resources to perform this role effectively. Incentivise managers to drive employee mobility and host regular career conversations with employees. Individual coaching can support managers to structure career conversations and maximise their impact for both the business and employee.
Inspire career development activism among employees
Encourage career development activism from the moment a new employee is onboarded. Show employees how they can achieve their career and skills goals within the business and help them build a career plan – use role models so employees can see this happening. By encouraging employees to develop their careers inside the business, they will be more engaged and easier to retain.
Invest in existing employees
Invest in employees who have the aptitude and mindset to succeed and want to develop their career within retail but lack the required skills – the right upskilling and training will allow them to develop these skills.
Many employees will know the business well, understand how things are done and have built solid relationships with colleagues across teams and departments, while customer-facing employees will have valuable insight into customer behaviour that can be leveraged. This cohort represent a strong talent pool who can be upskilled and redeployed to more senior roles within the business through a structured internal mobility programme.