receives compensation from some of the companies listed on this page. Advertising Disclosure


Managing Retail Employees: How to Keep the Good Ones editorial staff editorial staff

Retail has high turnover, but here are six ways to retain the ones you want.

  • The current turnover rate is 58.3%; the factors that determine these rates are low pay, few opportunities, young workers and lower personal fulfillment.
  • Correctly calculating your current turnover rates will help determine where you stand with the successful hiring of employees.
  • You can retain your best employees by getting to know them, fully training them, trusting them, learning from them, and a variety of other techniques.

It may seem impossible to retain good employees in the retail industry. It's common for good employees to get snatched away for a little extra pay or a promotion. Your business needs to find ways to keep your good employees right where they are meant to be – with you!

So how exactly can you do that? It starts with good leadership. Good employees need good leaders. Good leaders bring out the best in their employees. They challenge their employees to rise above their self-imposed limitations. They encourage their employees to grow, both as employees and as people.

Why is the turnover for retail increasing?

Retail turnover is high due to:

  • Low pay and little to no benefits
  • Opportunities for advancement
  • Young workers
  • Personal fulfillment 

Pay and benefits

Low pay and little to no job benefits are primary reasons for any industry, especially the retail sector. Retail workers describe a broad spectrum of workers, including salespeople, cashiers, managers, and stockroom workers. The wages these workers receive are at or below minimum wage, and they have little control of their schedules. In some situations, retail workers may be scheduled to work too many hours, while at other times, workers may not have enough hours. Due to these factors, many retail workers quit their jobs to pursue jobs in other industries that pay more and offer benefits.

Opportunities for advancement

When workers know they can advance to better paying job opportunities in a company, they work harder to achieve goals. A lack of promotion within a company causes workers to value their jobs less and eventually quit.

Young workers

Many retail employees are teenagers and young adults who are interested in becoming employed as a means to earn money for the summer. Teenagers and young adults are not seeking long-term employment, which leads to higher turnover rates.

Personal fulfillment

Retail work entails a variety of duties and responsibilities, but workers till may not find this type of work fulfilling. Workers who are seeking long-term careers are looking for jobs that are intellectually stimulating, lucrative, and offers some kind of employee benefits.

What is a reasonable turnover rate for retail?

The retail industry is one of many industries with a high turnover rate of 58.3%, according to Credit Donkey. The leisure and hospitality sector has the highest turnover rate – 87.4%. Other industries with high turnover rates include food service, arts and entertainment, and professional and business services.

In 2018, the average turnover rate for all U.S. industries was 15%, according to DailyPay. The retail sector alone had an average turnover rate that exceeded 55%. The ideal turnover rate is 3.5%, according to Chron. According to the U.S. Bureau of Labor Statistics, the separations from December 2019 to January 2020 increased from 748 to 961.

It's clear the retail turnover rate is growing steadily, and problems that are complicating this problem are maintaining store processes during increased turnover times and a lack of consistency with employee productivity and store execution. Problems with attracting and hiring good workers are another factor that negatively impacts retail turnover rates.

How do you calculate your turnover rate? 

If you want to retain your best employees, then keep the following in mind.

1. Cultivate a culture of teamwork, not competition.

Your good employees are often motivated and ready to show they have what it takes to move up. This sort of energy can be hard for some leaders to deal with. Some co-workers may even sabotage the new employee from the beginning. Resist this urge, and stop anyone else's efforts to derail the new employee. This is the quickest way to lose talent. Remember, these types of employees are assets, and they'll help you look good as well.

2. Fully train employees.

Just because they are meant to be superstars doesn't mean they don't need to be trained. A big mistake is assuming they'll know how to do everything. They might, but don't assume that they do. It's also important to remember that they probably won't be perfect at everything the first time you show them. A great training program isn't just a requirement for good employees; it could turn average employees into stars as well.

3. Get to know your workers.

You don't have to be their BFF, but it's a good idea to know what their professional aspirations are. Be the person who helps them reach their goals. If their goal is to be a manager one day, then start grooming them for that. Does it mean that they won't be with you forever? Maybe. It also means that you are helping them succeed, and they will work harder for you because of it.

4. Trust them.

It's important that they feel trusted. Your trust in them increases their confidence in their abilities as an employee. It also gives them the confidence to take initiative.

5. Give them room to make mistakes.

A quote by Thomas Watson sums this up: "Recently, I was asked if I was going to fire an employee who made a mistake that cost the company $600,000. 'No,' I replied, 'I just spent $600,000 training him. Why would I want somebody to hire his experience?'" 

6. Learn from them.

Your employees each have unique perspectives and experiences that can help you grow your business. Don't be afraid to capitalize on this. They will feel respected and valued. It will encourage them to invest in the success of the business as well.

Retaining good employees should not be difficult. If you provide them with a safe and challenging work environment and help them reach their goals, they will be less tempted by that other job with a 50-cent raise.

Image Credit: Monkey Business Images/Shutterstock editorial staff editorial staff Member
The purpose of our community is to connect small business owners with experienced industry experts who can address their questions, offer direction, and share best practices.