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Tackling retail turnover: HR strategies for attracting and retaining talent

The retail industry has long been associated with higher-than-average staff turnover. In the UK, the average annual rate of employee turnover is around 15% but in the retail sector, it soars to 50.8%

A study by Oxford Economics and Unum found the average cost of turnover per employee (earning £25,000 or more) is around £30,614. What’s more, new hires take an estimated 12 months to become fully productive, during which, the high turnover rate within the retail sector suggests that several more people will have likely moved on.

High staff turnover disrupts operations, strains existing employees and ultimately leads to a decline in customer service. In today’s dynamic retail environment, attracting and retaining skilled talent is no longer a luxury, it’s a necessity to stay competitive. In this article, we’ll dive into the root causes of high employee turnover in the sector and outline HR strategies the industry can use to help mitigate these challenges. 

What causes high staff turnover in retail?

1. Mental health and managing stress

A staggering 80% of UK retail employees have reported increased stress in the past year, while 50% of managers have witnessed an increase in people leaving due to psychological problems. Hostile customer interactions including confrontation, abuse or theft are major contributors to this stress, with some cases resulting in PTSD. In 2023, 70% of retail employees had experienced verbal abuse and 46% received threats. 

2. Pay and the cost of living

In 2023, the wholesale and retail sector was also revealed to have the second-highest number of jobs paying below the Living Wage. Somewhat unsurprisingly, 52% of retail workers reported struggling with their wellbeing due to the cost of living crisis. 

Notably, however, some retailers have bucked this trend. Aldi has set a benchmark for equitable pay, increasing their hourly rates twice within the first half of 2024, investing £79 million. This increase brought their entry-level hourly wage to £12.40, (40p above the new Living Wage) which they claim is the highest entry-level pay offered by a British supermarket.

3. Skillset deficit

As reported by Lucy Crowther, Director for the British Retail Consortium, digital skills have become necessary for 79% of retail jobs, yet 62% of leaders struggle to find workers with the experience needed.

As Ailsa Forbes, Retail Impact Fellow, puts it – “retailers must never forget that their staff are their superpower.” Investing in your employees’ well-being isn’t just the right thing to do, it’s a strategic move with a significant return on investment. Gallup’s latest report underscores this point stating that companies prioritising employee well-being outperform their competitors by a staggering 147%

But how can HR translate this philosophy into action?

HR strategies for a thriving workforce

By implementing tailored HR strategies, retailers can enhance employee satisfaction and retention, creating a more stable and motivated workforce. As leading HR recruiters, we’ll explore the strategies HR professionals can implement, to help mitigate issues associated with a high staff turnover while supporting the wider aims of retail businesses. 

1. Engaging employees and protecting their wellbeing 

Employees who feel valued and supported are more likely to stay with the company. With many retail workers feeling overworked and undervalued, simple measures like positive recognition during performance reviews can make a significant difference. Research shows that such recognition can make employees 63% more likely to stay with a company. Further, investing in internal development and career progression programmes demonstrates commitment to employee growth, fostering loyalty and opportunity to align individual goals with company objectives.

2. Facilitating a culture of equal opportunity

A 2023 report by MBS Intelligence and the British Retail Consortium shows that more work is being done for diversity and inclusion in the sector than ever before, with 93% of retailers now having a D&I strategy. However, implementation remains a challenge. Nearly half of these businesses lack specific initiatives to advance their strategies and two-thirds have no targets or goals due to insufficient data.

Moreover, in 2022, most retail employees from Black, Asian or minority ethnic backgrounds were in shop floor roles rather than senior or head office positions.

HR professionals can address this by gathering diversity and inclusion data to set measurable goals, such as closing gender pay gaps and promoting diversity through responsible hiring.

3. Upskilling retail staff for high performance 

The retail sector has traditionally offered entry-level opportunities but that doesn’t have to limit employee growth. Investing in upskilling programs can significantly boost retention, with 94% of workers more likely to stay with a company that invests in their careers. By offering training and development opportunities, retailers can bridge the skills gap, adapt to evolving trends like livestreaming and recommerce and create a more competitive workforce. 

This not only benefits employees by enhancing their skills and career prospects, but also positions the retailer for success in a rapidly changing environment.

By implementing these comprehensive HR strategies; fostering employee well-being, promoting diversity and inclusion, and investing in upskilling, HR professionals can play a pivotal role in reducing staff turnover. By building a more engaged and motivated workforce, they will ultimately contribute to the success of their retail businesses.

Work with Distinct

We pride ourselves on acting as a trusted liaison between ambitious retail companies and exceptional HR professionals. Our services cover permanent and temporary HR recruitment across the Midlands. 

Whether you wish to discuss your next HR role, your retail recruitment needs or the current market, contact Distinct today.


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