How can employee turnover be reduced in retail?

The retail sector, which employs more than 800,000 people in France, is usually associated with a high employee turnover rate. When controlled and used effectively, turnover can bring a breath of fresh air to a company and infuse the team with new energy. However, when talent drain is involuntary, it can have a considerable impact on the organisation, which may become destabilised. It is therefore important to understand its origins and effects and consider solutions to reduce it.

This is the goal pursued by our experts in this new article. After briefly defining the concept, they will explain its causes and consequences and, finally, invite you to reflect on possible solutions to develop according to the needs of each establishment.

Definition of turnover

Borrowed from English, the term “turnover”, which is part of the French management vocabulary, refers to employee rotation within a company. Generally calculated annually, this percentage takes into account employee departures for all reasons (namely: retirement, resignations, dismissals or non-renewed probationary periods) and arrivals following new hires during a defined period. It therefore indicates the renewal of the workforce throughout that period.

It is calculated by adding the number of departures during the period studied to the number of arrivals during the same period. We obtain an average by dividing this result by two. We then divide this figure by the number of employees the company had at the beginning of the given period, then multiply the result by 100 to obtain the percentage.

Turnover rate = [(Number of departures during year N + Number of arrivals during year N)/2]
/ Workforce on 1 January of year N x100

The effects of turnover in retail

Depending on the sector in which a company operates, the turnover rate can indicate its social climate, although this is not always the case. Take the example of public administration, where the rate is close to 0%.

In retail, a high rate generally reveals dysfunction and has consequences for the company. On the one hand, there is an economic impact that must be taken into account from the day an employee begins to reduce their productivity until the day their replacement becomes operational and efficient. The actual costs are therefore related to the employee’s departure, the recruitment of the new candidate, as well as their onboarding and training. On the other hand, the psychological impact should not be overlooked, as any departure can affect the morale of the rest of the team and their daily work. Finally, there may also be an organisational or structural impact due to the loss of the resigning employee’s skills and efficiency, where applicable.

Causes of a high workforce turnover rate

There can be many reasons for a high turnover percentage, but in retail, they are usually the following:

• Work overload due to staff shortages.
• Lack of recognition of skills and performance.
• Lack of career development prospects.
• Low pay.
• Few team activities and limited social involvement.

These reasons, which are often interconnected, in turn lead to a lack of motivation, which directly affects employee involvement and undermines team spirit. 

Solutions to reduce turnover in retail

Attract candidates and retain talent, yes—but how ? The first changes must be made upstream. To spark the interest of potential talent, companies must use their employer brand to showcase the value proposition that sets them apart from their competitors. They must then focus on quality recruitment that makes it possible to assign the right person to the right position.

To retain your teams, it is essential to identify and understand the origin of the problem in order to make relevant changes. Since job satisfaction is directly linked to quality of working life, here are some possible solutions  to consider that we recommend to retail brands seeking to reduce their turnover rate.

• Improve onboarding to support the integration of new recruits so that they become effective more quickly.
• Improve working conditions : increase salaries or offer benefits, vary assignments or consider a rotation system for more demanding positions, and define a risk-prevention policy that adapts positions to prevent workplace accidents and occupational illnesses.
• Offer personal development opportunities, particularly career development : expanding knowledge and skills in order to progress through the ranks is a factor in professional satisfaction.
• Recognise and reward skills and achievements.
• Organise team-building activities to create a genuine team spirit and help your employees get to know one another.

As a leader in slip-resistant work shoes, Shoes For Crews can support any retail company in developing its risk-prevention policy by offering shoes equipped with patented technology and adapted to the needs of its employees. We invite you to contact our team of experts, who will help you choose the best solution for your staff.