Employee turnover is the rate at which a company loses employees and is forced to hire new ones.
Some turnover is normal—good, even. It’s natural for people to move on to new opportunities, or for companies to prune employees who aren’t fulfilling their roles. The rate of turnover can vary by industry, but generally, low turnover can signal a healthier and more profitable organization.
High turnover, on the other hand, can point to specific issues within a company, and it comes with a lot of drawbacks.
Unfortunately for retailers and SMBs, the retail trade industry tends to have higher-than-average employee turnover rates: 3.9% in 2024, compared with the national average of 3.6% for all industries.
In this guide, you’ll learn why employee retention strategies are crucial when it comes to fixing this problem. You’ll also learn how to put these strategies to work so you can build a more stable and engaged workforce.
Retail employees are voluntarily leaving their jobs at alarmingly high rates as we march into 2025.
According to a report published in December of 2024 by the U.S. Bureau of Labor Statistics, there’s a higher-than-average increase in both quits and terminations.
This is a big problem for retailers.
Having to constantly recruit, hire, and train new employees is costly on time, resources, and budget.
Changing your staff constantly can cause your customer service to suffer in a way shoppers notice. Big turnover can leave you shorthanded during the most profitable times, like weekends and holidays.
Worst of all, high turnover can dampen employee morale and give your brand a bad reputation. Some things can’t really be changed, like the demanding nature of retail jobs and the reality that the retail hiring market is highly competitive for employers.
The good news is there are plenty of ways to reduce retail employee turnover.
Every retail store manager struggling with high turnover asks themselves this burning question: “How do you reduce employee turnover in the retail industry?”
The answer is simpler than you might think.
All you have to do is go back to the basics: provide good pay, competitive benefits, and a friendly work environment.
That’s what researchers from Northcentral University found when they set out to study why retail turnover was so low in an unnamed retail establishment in a Northwestern state.
The team ran a case study surveying 18 of the store’s non-managerial employees. Using transcripts from the open-ended, qualitative interviews analyzed with the NVivo qualitative data analysis system, the team identified five core characteristics driving the low-turnover workplace:
Of course, this is a case study, not a major study surveying thousands of employees. But it rings true: who wouldn’t want to work for a company that delivered on all five of these points?
If you’re dealing with high rates of attrition, now’s the time to take a good, hard look at your company.
Here are three steps you can take ASAP to make your workplace somewhere employees want to stay.
Ready to learn how to increase employee retention in retail? Let’s get started.
As a retail manager or SMB owner, you have a lot of influence on the work environment.
Think about ways to build team camaraderie. This doesn't have to be anything too fancy or forced.
Really, all you need to do is make sure employees feel acknowledged and supported. Open the lines of communication as far as they'll go. Regularly ask about your employees' lives outside of work, and be genuinely interested and supportive of them as people. Not just employees.
Plan laid-back pizza parties or catered lunches once a month—not as a reward for anything, but simply to give everyone a chance to socialize. Celebrate birthdays, employee anniversaries, and milestones together with your team.
Before long, your workplace will begin to feel more friendly, positive, and social.
Life does not fit into a rigid, 9-to-5 box, and your employees' work schedules shouldn't either.
That's why flexibility is so important to the health of your workplace.
Some of your employees are probably parents to young children. Others may be caring for aging parents or facing health challenges of their own. Still others might be students juggling classes and exams, or pursuing personal passions outside of work.
When you offer flexible scheduling options, you empower employees to live balanced lives.
Creating flexible retail schedules is easier to do today than it’s ever been. With tools like Shiftlab’s Employee Scheduling Software, you can automate the schedule, forecast labor demand, and even put shift scheduling into employees’ hands with our Shift Swaps and Open Shifts features.
Next, make sure you offer paid time off (PTO). Not all states require PTO, but the number is increasing every year, and offering PTO for retail employees means you get to tap into the documented benefits of PTO. Like higher productivity, better morale, increased job satisfaction, and reduced turnover.
Why not get ahead of the legislation and give your employees much-needed paid breaks?
Just make sure you actively encourage employees to use their time off and stay unplugged the whole time. Assure them that you'll help pick up the slack when they're gone so they won't face a mountain of work when they return.
Finally, make sure you give employees a way to learn new skills and challenge themselves. This could mean offering extra training programs, providing tuition assistance, or establishing clear pathways for advancement within your organization.
Good compensation and good benefits might seem expensive, but trust us: they’re huge players when it comes to employee retention.
If you offer your retail employees competitive pay and a quality benefits package with health insurance, retirement savings plans, tuition reimbursement, and paid time off, you’re far more likely to retain employees than your competitors who don’t offer these things.
Yes, there are upfront costs to contend with. But as a result of investing in competitive pay and benefits, you’ll spend less on recruiting, hiring, and training new employees.
Plus, you might just get a reputation as an excellent retailer to work for. Which, in turn, can boost your overall brand image and keep customers coming back for more.
Shiftlab can give you the tools you need to drive employee retention. Our scheduling, time clock, and store management tools help you give employees flexibility and ownership of their role in your store. On the managerial side, you’ll enjoy an easy way to track the health of your store, manage shifts, and make sure employees are taking breaks at the right times.
Book a demo to see how we can help you create a more collaborative and flexible workspace.