Retailers are seeing high employee turnover
Nearly a third (29%) of human resources and compensation professionals at 53 major retailers, with more than 2 million employees together, told consulting firm Korn Ferry said they've seen employee turnover increase since the beginning of the year, especially among part-time hourly store workers — 81% on average compared to 76% in 2017.
Corporate turnover in retail is slower, but has also risen, to 15.6% this year from 13% last year, according to the survey. Employees are most often leaving for "better opportunities/promotions," followed by a desire for more money or hours.
When asked what retailers are doing about it, most said, "training" and "career pathing," followed by "better communications on the employee value proposition" and "changes to compensation packages."
Most retailers are getting the benefit of an economy with record levels of employment when it comes to revenue, but as employers they're having to open their own wallets and get creative, both for full time workers and for the extra hires they need headed into the all important holiday season.
Seasonal hiring has flipped the previous 2014 record of some 696,000 seasonal jobs, reaching 704,000 jobs this year, according to an October report from global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc. emailed to Retail Dive.
"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," Craig Rowley, Korn Ferry Senior Partner, Retail and Consumer, said in a statement. "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."
Those existing workers are also looking to get the treatment that incoming workers are, Korn Ferry also found. Most retail employers give out annual merit increases of about 3%, for example, but more than a third (34%) said that they hiked wages for existing employees to put their salaries on par with their starting pay boost, and 95% say they'll be doing that by the end of next year.
Some retailers are going beyond wage hikes and bonuses to attract and keep workers, especially at the holidays, when they need extra help to support sales. Target, whose 120,000 temporary holiday jobs marks the highest number at a legacy retailer tracked by Challenger this year, is offering workers gift cards, for example. J.C. Penney is offering vacations and "prize packages," and Kohl's is hosting a special shopping day with employee discounts, according to the Challenger report.
Starbucks, meanwhile, has added a childcare benefit to its compensation package, Challenger noted in another report sent to Retail Dive. While that may seem radical for a coffeehouse chain, many experts in the field are no longer surprised in light of the scarcity of workers and the enticements at competitors, according to a statement from Andrew Challenger, vice president at the firm. "It's no wonder companies are getting creative in their benefits packages."
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