Turnover up among retail employees as holiday season gets in gear

23 November 2018 Consulting.us 3 min. read

In a recent survey from HR consultancy Korn Ferry, almost a third of retailers said that they’ve experienced increased employee turnover since 2018. The study also found that retailers are giving wage hikes to existing employees as firms are forced to boost starting pay amid low unemployment.

The Korn Ferry survey, which drew on responses from HR and compensation professionals at 53 major retailers, found that 29% of respondents reported an increase in turnover this year. ‘Better opportunities/promotions’ was the number one reason for departures in retail, follow by ‘more money’ and ‘more hours.’

Meanwhile, the survey unsurprisingly found that part-time hourly store employees had the highest turnover rate among retail positions (81% in 2018), an increase of 5% from 2017. On the other hand, retail corporate rates had the lowest turnover rates in the industry, though turnover was higher in 2018 (15.6%) than in 2017 (13%).

To combat turnover going forward, retailers identified ‘training’ and ‘career pathing’ as the top focus areas, followed by ‘better communications on the employee value proposition’ and ‘changes to compensation packages.’Turnover among retail employees up as holiday season gears upCommenting on the survey findings, Craig Rowley, Korn Ferry Senior Partner, Retail and Consumer, said: “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. 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.”

Korn Ferry’s study also found that retailers have been hiking wages of existing workers to retain them, as well as to bring their compensation in line with the higher starting wages of employees – which have risen due to heightened competition/record low unemployment. 34% of retail respondents said they gave wage hikes to existing employees as a response to increased starting wages.

The consultancy recommends that retailers reinforce other aspects of the employment experience aside from simple compensation (though it remains central) to cut turnover. “To retain top employees, employers need to lay out clear career paths, offer training and pay competitive wages, added Rowley. “It’s critical that employees feel nurtured and that they feel part of the organization instead of just having a job.” The above-mentioned elements are especially imperative as retail employees enter the sometimes disillusioning hellscape of the frenzied holiday season.

In other human capital research news, Korn Ferry has found that entry-level workers have seen their real wages decline in the last decade. Another study from the consultancy has found that there is an increasing proportion of gig professionals working at companies.