Tackling the increase in retail employee churn: Is Recognition the answer?

By Mark Barling

A recent article titled “Retail employee churn rate on the rise.” featured on Inside Retail Australia suggests that retail workers leave their jobs after 10 months and the average annual industry turnover is running at 41%. But did you know lack of recognition just happens to be the number one reason why employees quit (The Ultimate Guide To Employee Recognition, Achievers).

The article goes on to quote Roger Simpson, a retail expert and commentator with over 19 years’ experience in the sector, as saying “I have heard estimates of the cost of staff turnover being approximately a person’s salary, sometimes higher” It’s therefore in your company’s best interest to find out ways to address employee attrition head-on.

Many of your company’s expenses are unavoidable, but employee attrition doesn’t need to be one of them. The average salary for a retail employee in Australia is over $33k per annum. If we take a retailer with 1,000 employees as an example only (with a churn rate of 41%), the annual re-recruitment, induction and training costs would be more than $13.5million. Imagine if that logic was applied to a big retailer like Myer or Bunnings!

The impact of employee churn as a result of low employee engagement is not just confined to costs associated with re-hiring and re-training, but also on customer experience. The logic being if 41% of your staff is churning at any one point in time, only 59% of your staff have the appropriate training and company knowledge to adequately service your customers. A brand promise, at the end of the day, is only as good as the people who are employed to deliver it.

One of the factors highlighted in the article was “poor management of staff resulting in reduced engagement and therefore people looking for another job.”

Harvard Business Review, in conjunction with Achievers, conducted research and found that 72% of respondents rank recognition as having a significant impact on employee engagement.

In talking with some of Australia’s largest retailers, we know that management can sometimes struggle to connect with all employees from the simple point that all their employees may not have a company email address.

Instead of thinking this as a barrier, what about if we thought of this as an opportunity?

Social Recognition platforms have helped revolutionise how people can more freely and democratically recognise good work that is happening every day in organisations. When that recognition is aligned to company values and vision it can positively reinforce what is good about a company. And from our analysis of almost 700,000 recognitions, it appears the most effective way to get someone to recognise is to expose them to recognition. The single most significant thing that influenced employees’ willingness to recognise another was whether they had been recognised themselves. Employees within our data sample were twice as likely to recognise someone else if they had been recognised themselves.

A Social Recognition program can then be both a demonstration as well as a driver of change in helping organisations better engage their people.

Social Recognition technology has many advantages – but one of the biggest is the ability to connect employees across an organisation. Whether they have an email address or not, employees can recognise, and be recognised, for good work. Executives and Store Managers can use social recognition as a communication channel to reinforce good behaviours. Social Recognition can therefore be used to help increase employee engagement, and in turn, help organisations reduce employee turnover, leading to stronger business results.

The solutions to reducing employee churn are some of the same actions that will strengthen every aspect of your business. When you make internal cultural changes that bring your staff a greater sense of well-being and a feeling of being supported, you’ll not only retain them but also attract top talent and deliver better customer service as a result. To learn more, email Mark Barling to discuss ways you can unite your workforce with a positive company culture.

This article was first seen on Grass Roots Australia blog

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