Is your business’ growth stagnant or decreasing? Are you seeing lower customer satisfaction and higher costs? The solution to these issues may lie in improving employee retention.
With the constant introduction of new technologies, the need to develop an efficient omnichannel presence, and the economic challenges facing the market as a whole, the priority list of any retailer seems to only be getting longer and more complex. But one focus area with a clear potential for positive impact is the store experience. A high-quality store experience results in loyal customers—and higher sales.
There are many factors that contribute to a store experience that keeps shoppers coming back, but one of the most important is the service your employees deliver. Engaged employees provide customers with a shopping experience that leaves them feeling taken care of and highly motivated to return. They’re the foundation of an environment that results in decreased shrink—the difference between inventory and what’s on hand due to damage, theft, etc.—and increased ROI. Employees that are well trained don’t leave money on the table.
Investing in initiatives that improve employee performance, morale, and engagement, then, is an investment in your store experience and beyond. So while it may seem like a significant upfront and ongoing cost, as you’ll see below, retention pays off.
3 Benefits of Improving Employee Retention
Employee turnover has always been high in retail and industry pundits accept it.
I’ve heard this statement more times in my career than I can count, and it simply isn’t true. High turnover is a signal that there’s an opportunity for major improvements.
If you don’t believe me, take this story for example: I recently met a member of the board of directors of a major big box retailer. This person shared with me that their stores have a turnover rate of 7 percent. The industry average is 50 percent! This illustrates that not only is low turnover possible, but achievable.
There are three key benefits—aside from simply reducing onboarding costs—that come from retaining your employees: an improvement in customer service, an increase in sales, and a decrease in shrink. Although each can be accomplished, their growth is exponentially greater with a labor force that sticks around.
Excellent Customer Service is Good for Business
Costco, like many other successful retailers, prides itself on its culture of service. Their associates are attentive, the checkout lines are fast, and there’s always someone nearby when you’re looking for help. Lululemon, another high performing business, achieves the same—the employees are highly educated about the merchandise and are excited to share that knowledge with customers. These environments exist because their employees are well-trained, knowledgeable, and happy to be there.
There are many other stores, on the other hand, that don’t provide this level of customer service. They have too few employees manning checkout lines, team members who clearly don’t want to be there, and no one to be found when everything you need is out of stock or hard to find. This is the result of a churn-and-burn culture that we see all too often.
Where do you think customers are going to shop?
There’s a lot of lip service paid to customer service as a crucial part of the store experience, but very few retailers get it right. Fortunately, those that do—by focusing on employee engagement and retention—see an immediate return, while those that neglect retention see a significant decrease in customer satisfaction and foot traffic.
Engaged Employees Make Sales
Working at a brick-and-mortar store is more complicated than ever. It’s not just putting stock on the floor, interacting with customers, and managing the checkout lines. Now, we’ve charged store employees with many other things: preparing and executing curbside pickup, talking to customers about BNPL platforms, getting shoppers to sign up for private label credit cards and loyalty programs—the list goes on and on.
These are all very important parts of running a successful retail business today, and they aren’t achieved by employees who have one foot out the door.
Training and retaining employees who are empowered to be successful in their jobs improves their ability and likelihood to make these sales, collect important data, and improve your bottom line.
Staffing Reduces Shrink
Shrink is a multifaceted problem, but it’s certainly helped by proper staffing levels.
Think of the last time you went to a department store (or even some of the big box stores). You likely wandered around for quite some time without coming across a single employee. This is the perfect environment for theft.
Stores that are staffed with engaged employees reduce shrink with their presence alone—and have the opportunity to discourage it among their peers.
The bottom line: when a customer thinks, “I could take whatever I wanted, and no one would even know I was here,” you have more than a shrink problem—you have an employee retention problem.
Increased Employee Retention Means Increased ROI
At Getzler Henrich & Associates, our industry specialization and individual touch means we’ve watched the retail business change, and change, and change again. We’ve seen that the companies that recognize—and invest in—the value of the people they employ can survive any storm, while those that fail to see this major asset often collapse.
But how can companies develop initiatives to successfully target employee engagement? What tools are available to employers to track employee satisfaction, performance, and retention?
For starters, technology platforms that focus on tracking employee engagement can help.
Axonify–a tech platform that focuses on fostering connections, improving communication channels, and targeting engagement of frontline employees around the world–is just one example. When I ran retail brands, using such platforms to gain insights on company morale was integral to our companies’ employee retention.
Fixing the balance sheet is another part of the solution. Fixing the business through performance improvement initiatives powered by technology and reenergizing your team will round out the strategy for making your business thrive.
There’s a wealth of resources available to employers who are serious about making employee retention a priority. Follow me as I share some of the key initiatives I’ve seen businesses take to target employee retention–and how those initiatives have successfully set their companies apart from the rest.
To connect with Michael, please visit here.