How to Build a Powerful Employees Retention Strategy

The retail industry is experiencing an unprecedented churn of turnover. Learn how to build a powerful retention strategy with this article.

Retail workers are leaving their jobs at a historic rate, but how can you keep up with the unprecedented churn of turnover? By strengthening your retention strategy, you have the power to boost retention and keep the best talent within your organization.

Understanding turnover and why it happens is key to building a strategy that helps slow its effects. This guide explores the importance of improving the employee experience, including the onboarding process, workforce communication and the overall culture of your organization.

Key Takeaways:

• 83% of retailers said they’re heavily investing in recruiting and retaining employees.
• Cultivate a positive culture within your organization, as employees are 10 times more likely to quit because of a toxic environment than a compensation-related issue.
• Equip your employees with tools that help them communicate from a mobile device and allow them to stay connected.
• Evaluate your retention strategy regularly to make sure your organization is aligned to meet its goals.

Content Summary

Overview
Understanding Turnover
Developing a Retention Strategy
Implementation
Best Practices

Overview

Attracting top talent is a constant challenge for most retailers. But maintaining their engagement, committing to a strategy of long-term professional development and ultimately securing them are higher hurdles to overcome.

In the current labor market, exceptional candidates needn’t look very far to find employers eager to harness their burgeoning skill set. Historically high job openings have triggered a greater — and more creative — emphasis on talent acquisition.

Retention can fluctuate due to any number of factors, but consistent variance is traceable across industries. For instance, apparel retailers, on average, lost employees at three times the rate of airlines and health care systems. Coaching organization The Great Game of Business (GGOB) finds that, generally, an employee attention rate of 90% or higher is ideal for most organizations.

While new unexpected developments can make that goal difficult, if not unrealistic, for some businesses, the cost of replacing an employee remains consistent. According to Gallup, the costs associated with replacing an employee can be as much as 200% of that employee’s salary.

And HR professionals are intimately familiar with this battle. Unlike recruitment or other strategic initiatives, the success of a business’s retention efforts takes significantly longer to measure, forcing employers to be as vigilant as they are adaptive in combating employee disengagement and promoting long-term growth.

Managing employee retention is vital to the successful development of your workforce and the sustained prosperity of your business. Crafting and maintaining a comprehensive retention program is critical to attracting and keeping your best employees while mitigating turnover and its associated costs. After all, the Society for Human Resource Management (SHRM) finds it typically far more efficient to keep an exceptional employee than to recruit, train and orient a new hire of the same caliber.

Cultivating a sense of job satisfaction and engagement may seem like obvious areas of focus, but they can be routinely neglected for more urgent matters. However, many of these urgent issues — such as low morale, weakened productivity and stagnant performance — are the symptoms of a weak or nonexistent retention strategy. By addressing retention head on, you can protect your investment and foster an organization where your employees are just as excited by and committed to its success as you are.

Understanding Turnover

Retail workers are leaving their jobs at the highest rate the Department of Labor has seen in more than two decades. However, resignation is never without cause. In order to meaningfully address retention, it’s important to identify the different kinds of turnover and consider what may lead to them.

VOLUNTARY

This form of turnover is defined by the number of employees who leave an organization on their own accord, often to accept a position with another company. High voluntary turnover could be the result of problematic workplace culture, a lack of opportunities for growth, cumbersome and outdated technology or other pain points that yield low job satisfaction.

INVOLUNTARY

This kind of turnover represents the number of employees who leave a business not by their choice. Most analyses will distinguish between uncontrollable and controllable involuntary turnover:

• Uncontrollable involuntary turnover could be attributed to events such as death, injury, retirement or forced reductions to the workforce, such as through legislation or fiscal reasons.
• Controllable involuntary turnover is often the result of work-related accidents or illness or termination pursuant to poor performance or disciplinary action.

Though uncontrollable involuntary turnover is an inevitable part of an employee’s journey, high controllable involuntary turnover may point toward severe organizational issues.

ATTRITION

Turnover and attrition both occur when an employee leaves. However, turnover leaves an open position within an organization, be it through termination, resignation or abandonment. Attrition, on the other hand, leaves no vacancy in place of an employee; this can occur due to retirement, reconfiguration or by an employer eliminating a position outright.

The key difference between the two is that turnover is proceeded by a need for new personnel, whereas attrition is not.

WHY EMPLOYEES LEAVE

Voluntary turnover cannot be attributed to a single cause, but there are several common scenarios that lead to employee resignation. Indeed identified the following explanations among the most prevalent reasons workers quit:

• lack of challenge
• better pay
• no sense of belonging
• disconnect with leadership
• career advancement
• need more feedback
• unclear company vision
• inadequate work-life balance

WHY EMPLOYEES STAY

Similarly, the ability to keep employees isn’t predicated on one aspect, but several that make an organization enticing and worthwhile. GGOB outlined the following pieces of a successful retention strategy:

• strong culture
• purposeful work
• collaboration
• recognition
• encouraging mentors
• transparent and trustworthy leadership
• emotional investment
• financial security

All businesses eventually experience some form of turnover, but identifying the preventable causes and addressing them directly can help you prevent an isolated reason from becoming a trend. Exit interviews and anonymous employee surveys can be invaluable for your organization in obtaining candid and specific explanations for resignation.

Developing a Retention Strategy

Due to the number of possibilities for an employee to leave an organization, your approach to retaining them should be appropriately comprehensive. Implementing both broad and targeted methods help you cast a wide net, and addressing more than just the early stages of an employee’s experience can allow you to exchange quick fixes for sustained solutions. The following areas of focus, in tandem with our suggestions, may help your business drive down turnover and extinguish popular resignation scenarios.

ONBOARDING

The moment a candidate becomes your employee, your focus for them shifts from acquisition to retention. Though they may still be experiencing the luster of a recent career change or at the very least, a fresh start with your organization, they are likely already scanning for signs of your business’s longevity.

A strong, structured onboarding program instills a sense of confidence in your newest talent, proving to them that your commitment to development is more than just surface level. The opportunity to tap into the phase for retention is huge. In fact, 83% of retailers Deloitte surveyed said they are most heavily investing in recruiting new employees and retaining them. An effective process will familiarize your new hires with your business’s strategies, goals and mission in addition to the day-today functions that help facilitate them.

Going a step further, onboarding that begins before an employee’s first day on the job reduces the time spent on procedural, housekeeping items, allowing you a greater opportunity to engage them in areas unique to your business earlier than before. Self-service onboarding tools allow employees to enter their basic information, complete tax forms and upload important documents safely and securely so they can focus on their role and development immediately.

83% of retailers said they’re heavily investing in recruiting and retaining new employees.

CULTURE

Establishing an environment that invigorates employees and gives them purpose makes it easier for them to envision a future with your business. However, a company’s culture isn’t always determined by deliberate actions. In an article for Forbes, Brent Gleeson explained culture is “either decisively defined, nurtured and protected from the inception of an organization” or more often, “comes about haphazardly as a collective sum of the beliefs, experiences and behaviors of those on the team.” While the former category can give you some control in shaping your culture, the latter may be built on a narrative you are not necessarily aware of.

Workplace culture is pervasive. As such, addressing a problematic culture becomes exponentially more challenging the longer it operates unchecked. In fact, a toxic workplace culture is more than 10 times more likely to contribute to an employee quitting than a compensation-related issue. Therefore, cultivating a positive environment in your business early is crucial, as your eventual leaders and managers will inevitably reflect this culture — for better or worse.

LEADERSHIP

The key to retention may lie within the individuals your employees interact with most: their supervisors. Pursuant to developing a positive culture, effective leaders echo the best parts of your business while encouraging hungry personnel to join their ranks. SHRM found among several studies they have examined that clear communication from and “fair treatment by a supervisor [are] the most important determinant of retention.” An ineffective or toxic leader risks pushing away employees before they have a chance to meaningfully consider their potential growth within your business.

Similarly, mentoring is an up-and-coming vehicle for retention. In a report from HR.com, it is projected that mentoring will grow significantly over the next year as businesses seek to drive deliberate “interpersonal connections” in place of the “informal relationships” that occur spontaneously. In tandem with this, Neal Goodman, contributor for Training magazine, found mentees are 50% more likely to stay with an organization longer than employees who were not mentored.

Continual leadership development can help ensure that your presumably most loyal employees don’t become stagnant in their crucial position, spurring a negative domino effect throughout the staff they oversee. An engaged and motivated leader will, accordingly, lead their fellow employees to long-term satisfaction and growth.

COMPENSATION

There are likely numerous reasons why someone would seek your employment, but ultimately, at least one of those reasons will be synonymous with any job they consider: to make a living. A positive culture and influential leaders can help narrow a small disparity between pay, but if your employees know they can earn significantly more with a competitor, they may leave even with the knowledge the employee experience they enter could be weaker.

By keeping a close eye on the average compensation of employees in your industry, you can adapt your wages to level the playing field. And if pay increases aren’t an option for your business, Robert Half, an industrial consultant, recommends bolstering your compensation elsewhere, such as through opportune bonuses. When your employees see a competitor as fiscally lateral, they have one less — and very important — reason to go elsewhere.

BENEFITS

According to The Washington Post, labor experts believe some retailers continue to struggle filling job openings because they are not meeting the demand for basic industry needs, including stable schedules, safer working conditions and paid leave. Going a step further, addressing these structural problems is no longer enough to separate retail businesses from the pack. Unconventional benefits — such as pet insurance, telemedicine or financial wellness programs — can give your employees more perks and allow your company to be more accommodating without requiring a steep financial investment.

Thinking outside the box with your benefits while identifying what your employees actually want can ensure your business is in tune with their needs and proactive in its efforts to address them. And committing to your workforce’s well-being readily translates to their stronger commitment to your organization.

COMMUNICATION

Even the most inspiring company culture can be stifled if it is not conveyed properly. Implementing open and continuous lines of communication can encourage employees to build relationships, ask questions early and boost their overall engagement.

Whether your employees are working on the floor or stocking inventory in the back, tools that help them communicate from a mobile device, such as an internal, instant messaging platform, allow them to stay connected. Additionally, frequent updates through emails or channels enable your workforce to see your business’s commitment to its culture. For a more personal touch, periodic updates from your leadership remind employees that upper management isn’t faceless and is sincere in proving your organization is one worth staying at permanently.

FEEDBACK

Providing your employees with constructive feedback is more than just a way to maintain smooth operations. When wielded correctly, consistent feedback makes a persistent argument for burgeoning talent to stay with you. Though the annual performance review is virtually necessary for a business’s fundamental upkeep, SHRM found they are most effective when leveraged by ongoing peer feedback.

Of course, feedback is a two-way street. Though certain employees may thrive on consistent guidance alone, others may feel more empowered by an opportunity to share their thoughts. Likewise, while gathering feedback is important, it’s more crucial to prove your organization is willing to act on it. And when employees provide their feedback, they are telegraphing a potential cause for turnover, giving you a chance to address an issue before it’s too late.

PROFESSIONAL DEVELOPMENT

Without the opportunity to grow at their current organization, eager employees will look elsewhere. By offering evolving development tracks and recurring skill-building options, employees have a greater chance to see their trajectory within your business rather than outside it.

Your most valuable, hardworking employees may run the risk of turnover if they feel their professional education is stagnant. In an article for Forbes, Meghan Biro explained that by weaving learning into the employee experience through intuitive, handson training, employees refine their abilities while generating a greater sense of purpose.

In addition to obtaining general feedback, asking specific questions about how your staff envisions their growth and what skills they believe facilitate it enable you to implement new opportunities before the knowledge well runs dry.

RECOGNITION

Acknowledgment leads to belonging. When employees’ contributions to your organization are recognized, it’s easier for them to consider their work worthwhile and, by extension, worth continuing.

Employees who feel underappreciated or otherwise passed up will likely seek work elsewhere. In a survey conducted by LinkedIn across 32 million user profiles, the website found that individuals who did not change their position within an organization only have a 45% chance of staying after three years.

But creating new, higher-level positions may not always be reasonable. A clear system of reward could be more viable, provided it parallels your business strategy. In a study by Deloitte of 9,400 entities, 38% of employees said their companies’ reward structures were “somewhat aligned” with organizational strategy, and 14% found their rewards weren’t aligned whatsoever. Thus, employees are increasingly keen to whether or not recognition is sincere or an afterthought.

This isn’t to suggest that all recognition needs to be monetary or accompanied by a new title. Small, easy-to-implement acknowledgments like companywide shoutouts or kudos can drive home appreciation for employees without affecting your immediate bottom line. Even small, periodic expressions of thanks can compel a disengaged employee to think twice before researching a new employer.

CHANGE MANAGEMENT

The loss of an important employee or leader can feel like the first snowball in an avalanche of resignations without a plan of succession in place. However, even if the abrupt loss of a key player or an organizational shift doesn’t allow you to implement a contingency plan, transparency can help address your workforce’s concerns as the dust settles.

38% of employees said their companies’ reward structures were “somewhat aligned” with organizational strategy, and 14% found their rewards weren’t aligned whatsoever.

“If your organization is going through a big shift, keeping your teams as informed as possible helps ease anxieties and manage the rumor mill,” said Half. “Make big announcements either individually or in a group call or meeting, and allow time for questions.”

BRAND

Increasing retention is already an uphill battle, and any negative stigma your business carries makes each step forward exponentially more difficult. For a highly visible organization, routine reputation management, such as through social media, helps highlight your company as a place where people want to be. Hosting events and attending industry conferences can also position your business as a leader. Likewise, charitable actions and other philanthropic initiatives demonstrate your organization’s commitment to its community while showing employees that their contributions have a noticeable, positive impact.

Additionally, your employees may be your greatest internal advocates. Encouraging them to refer their friends — and incentivizing them to do so through referral bonuses or other rewards — can help build morale and ultimately, a stronger, more connected team.

Implementation

With the knowledge of where to begin addressing retention, you can focus on how to do so. Just as a retention rate is calculated over time, the impact of any solution will likely not be immediate. However, the following processes can help your HR professionals quickly establish trends and better consider an appropriate remedy.

BENCHMARKING

An effective retention strategy should be built on as much knowledge and research as possible. These two forms of benchmarking can provide you with the insight you need to make sound and practical decisions:

• External benchmarking allows an organization to determine if its level of turnover is unusual when placed against others. This can be as specific as direct competitors or broadened to related industries and beyond. Data like this can be found through resources like the U.S. Bureau of Labor Statistics’ annual Job Openings and Labor Turnover Survey.
• Internal benchmarking tracks the turnover for an organization both comprehensively and throughout certain departments or groups. This tactic can help you determine if a specific area needs to be addressed or if the key to your retention is broader and more systemic.

INVESTMENT

The price of high turnover may often be more severe than the cost of repairing it, but that doesn’t mean your plan of attack shouldn’t be considered alongside your organization’s budget. While it may be difficult to quantify the impact of some strategies, the effectiveness of many solutions can be measured over time.

SHRM suggests a financial return can be estimated by applying certain metrics, like turnover data itself, against the cost of recruiting, the frequency of absenteeism and other factors. In most scenarios, easier-to-implement initiatives, and the return that follows them, can serve as a platform to justify more effective and substantial solutions.

On average, 557,200 retail sales job openings are projected each year.

EVALUATION

Addressing retention requires a constant effort. Additionally, the causes of turnover now may not be the same down the road. Even the most innovative program risks becoming obsolete if it isn’t continually vetted and adapted.

Whereas benchmarking can enable you to see what groups are moving away from your organization, regular evaluation allows you to determine if there’s a common thread and if it can be tackled with a new or more specific initiative. Likewise, auditing what seems to work in addition to what doesn’t gives you a proactive edge against your organization’s turnover. Not unlike exit interviews, some organizations are conducting “stay interviews,” or regular talks with employees to determine what compels them most about their employer, as well as the avenues they have for improvement.

Just because challenges can emerge at any moment, that doesn’t mean your organization can’t be ready to overcome an unforeseen hurdle thoroughly and responsively.

Best Practices

Cracking the riddle of turnover isn’t an easy feat, but with the right preparation and approach, you can ensure your business’s long-term prosperity. You can craft an impactful employee retention strategy by:

• understanding why your employees quit and what turnover means
• identifying specific areas of your business that are ripe for improvement
• maintaining your strategy through regular evaluation and adaptation