Escaping the vicious cycle of employee turnover
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It's all too easy for retailers to fall into the turnover trap — a few employees leave, some others follow suit and suddenly you have a reputation for employee attrition. Without effective workforce management, employee attrition can become detrimental to an organization.
As demand for hourly workers has increased over the last five years, employee turnover rates have spiked. With major retailers like Walmart offering more generous packages to part-time associates and the rise of the gig economy with on-demand services like Uber, workers have more hourly work options than ever before. Retailers who rely on hourly workers now find themselves cycling through four phases of constant turnover:
Phase 1: Experienced and knowledgeable employees leave
Perhaps they're tired of the inconveniences caused by outdated scheduling practices. Maybe they didn't get enough training and feel like they aren't developing, or maybe they've found more lucrative hourly work. Either way, some of your most experienced employees are leaving to pursue other opportunities.
Phase 2: Replacing and onboarding new employees
In order to replace these more experienced team members, your managers expend weeks' worth of effort recruiting, hiring, and training their replacements. The price tag of hourly employee attrition cannot be understated: research shows that the cost of replacing a worker who earns $30,000 a year or less equates to around 16 percent of their annual salary.
Phase 3: Scheduling new employees
Now that your new hires are onboarded, you schedule them for shifts only to realize that they're available to work far less often than expected. Those who are available to work don't have all the training they need to fill every role — your staff is less agile. Even though you hired new team members, you're still understaffed.
Phase 4: Revenues suffer
Your new employees are less familiar with the company's products or services, and they're less likely to be effective brand ambassadors. Until your new employees become as knowledgeable as the experienced ones you lost, customer experience is impacted, leading to lost sales opportunities and missing revenue targets.
And so, back to Phase 1:
Understaffing then occurs because new associates aren't able to cover all the needed shifts until they are fully trained. This means your most experienced team members take on more work and face increased stress. This often leads to frustration or burnout and causes your most veteran employees to leave. Again.
The costs of this cycle are direct and tangible. According to a recent study by WorkJam, 92 percent of district and regional retail leaders agree that preventing the loss of even one hourly associate per month would drive meaningful profits. Over half (63 percent) of managers believe the retention of a single employee could bolster monthly revenues by 6 percent or more and that employee turnover perpetuates poor returns for retailers.
The reason it is so hard to escape this cycle is that each effect of turnover can contribute to more turnover. The top four reasons that retail employees leave their jobs — poor management, scheduling difficulties, lack of training, falling wages — are all side effects of losing and hiring employees.
Fortunately, there is a silver lining: reducing the effects of turnover can also help to reduce turnover itself. The very same strategies that mitigate the fallout from losing employees will help boost employee retention.
Here are three strategies that retailers can implement with a Digital Workplace to halt the vicious cycle of employee turnover:
Scheduling complexity is one of the top reasons that retail employees leave: 62 percent of retail managers say they have lost employees due to scheduling conflicts. By implementing a centralized mobile shift management platform, managers can transform scheduling into a collaborative and transparent process. By letting associates share their shift preferences and volunteer for unfilled hours, retailers can boost morale and drive up retention.
HR leaders should look to streamline onboarding with mobile training, including the use of videos, online documents and quizzes, reducing the pressure of training new employees for management staff. Effective onboarding will ensure that employees are more quickly prepared for the job they're taking, enabling them to handle more work and encouraging them to continue to train for more advanced positions.
Failing to effectively communicate between the corporate team, managers, and frontline workers can leave everyone feeling frustrated, unproductive and disengaged. Improving employee engagement is proven to result in lower attrition. By prioritizing direct communication in all aspects of the business, including the frontline, retailers can not only increase engagement by showing that they're invested in their workforce, but also capture feedback to address strengths and flaws in in-store processes, products and services and customer experiences.
Topics: Workforce Management