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With the holiday shopping season here, U.S. retailers are dealing with a revolving door of employees.
Korn Ferry found that 29% of the 53 retailers it surveyed said they’ve seen an increase in employee turnover since the beginning of 2018. The survey also finds that of all retail positions, part-time hourly store employees have the highest turnover rate, with 81% average rate in 2018. That’s an increase from 76% in 2017.
“Retailers are in a Catch-22 situation this holiday season. While high consumer confidence and a strong economy mean year-over-year sales are predicted to grow, low unemployment means there just won’t be enough workers to fill retail positions,” said Craig Rowley, Korn Ferry Senior Partner, Retail and Consumer. “To combat the situation, retailers are in a bidding war for hourly retail workers, and they are giving existing workers more hours to fulfill the need.”
While retail corporate positions saw the lowest turnover rates in the industry, the percentage was higher in 2018 (15.6%) than in 2017 (13%).
Respondents cited “better opportunities/promotions” as the No. 1 reason for departures in the retail industry, followed by more money and a desire for a more hours.
When asked what retailers will be looking to do to curb turnover moving forward, “training” and “career pathing” were cited as the top focus areas, followed by “better communications on the employee value proposition” and “changes to compensation packages.”
In terms of compensation, retailers predict around 3% merit increases, which is consistent with past years. However, due to competition, many retailers are increasing starting wages. More than a third of respondents (34%) said that in 2018 they gave wage hikes to existing employees to put their salaries on par with increased starting wages, and 95% said the issue will be addressed by the end of 2019.
“Retailers this holiday season have to be creative when filling vacant positions, especially at the store level,” Rowley said. “To retain top employees, employers need to lay out clear career paths, offer training and pay competitive wages. It’s critical that employees feel nurtured and that they feel part of the organization instead of just having a job.”