The Retention Revolution: How Retailers Can Turn the Tide on Employee Exodus

High turnover rates and staffing challenges have long characterized the retail industry. In 2023, the Bureau of Labor Statistics (BLS) found the average rate of retail employee turnover to be around 60 percent in the U.S. — far exceeding the national average by a whopping 15 percent. The seasonality of retail work only exacerbates the fluctuations of staffing, placing incredible pressure on hiring and operations teams to fulfill the staffing needs of retail stores and the consumers shopping in them.

As the retail industry looks to build teams to support the approaching holiday season, from warehouse floors to in-person sales assistants, and strives to course correct the past year’s most significant challenge — retaining quality staff — more retailers are turning to technology as a Trojan horse solution.

Scarce Shelves, Scarce Talent Pools

With a scarcer talent pool than ever before, retailers have been left scrambling to fill vacancies at every level, creating a groundswell of issues that impact operations.

Whether competing for qualified candidates or sourcing new entrants to join the industry, wholesale trade, retail and warehousing workers cost, on average, $4,705 per hire. This is a stark and unsustainable figure when considering the staggering 60 percent turnover rate, especially for small retail businesses. The alternative, however, can be even more bleak. Should retailers not find the "right" candidate, they’re faced with even further financial strain due to the need to cover overtime costs. Eating away at already tight budgets, 30 percent of retail workers have clocked overtime to keep pace with consumer demand and place items on shelves.

Yet, when retailers finally secure talent, they can still be at odds with their employee's attendance.

In sectors like retail and warehousing, a "no call no show" is more than just an inconvenience; it’s a critical imbalance that can throw off the whole day’s operations. A "no call no show" happens when an employee misses their shift without notifying their manager or team, and depending on location, TeamSense data has found these rates to be as high as 15 percent.

Absenteeism costs more than just a single employee's day of work; it creates a ripple effect, eroding productivity and employee morale.

The time and resources spent locating and replacing no-shows lead to even greater inefficiencies, driving productivity to an all-time low. So now, not only do retail employers have to worry about the 15 percent who may not show up, but they also have to worry about the 36.6 percent productivity loss associated with an unplanned absence. A lose, lose.

For the other scheduled workers, it impacts their workload as well as their trust in their coworkers and employer. Frequent absenteeism breeds doubt and frustration, harming team morale and the workplace atmosphere. By addressing the root causes of absenteeism and investing in employee engagement, training and support, retailers can begin to mitigate these issues and foster a more resilient workforce — especially in times of urgency like the holidays.

So how can retailers adjust their strategies?

Creating an Engaged Workforce and Ending the Exodus

The best practice for retaining employees is creating an engaged workforce, and that starts with clear, direct and easy communication.

Yet having that direct connection to the hourly workforce is no easy feat. Often left with no company-sponsored emails, laptops or cell phones, employees are left to their own devices (quite literally) to contact managers and HR should they need assistance.

Empowering a retail workforce with a clear way to communicate can make a world of difference in employee experience. In fact, Gallup found that highly engaged teams experience an 81 percent difference in absenteeism, a 14 percent difference in productivity, and an 18 percent difference in turnover compared to disengaged teams. By implementing straightforward tech solutions like texting, retailers and employees can rest easy knowing that their message is delivered, as an impressive 90 percent of texts are read within the first three minutes of delivery.

Retailers adopting text-based solutions have seen their no-call no-shows decrease by 50 percent, helping accurately staff shifts.

Being flexible comes second. Offering flexible scheduling and rostering options, like approved shift swaps or varied hours, can help employees manage their personal commitments but also reduce stress and absenteeism, leading to a more reliable, connected workforce. Last but not least, reward and recognize repeat tenure. Implementing rewards programs and placing value on employees who have reliable attendance and retention within a company is a great way to spark employee experience and cultivate a sense of recognition. Points systems within attendance tracking programs offer a great and easy way for employees, managers and HR to keep track of progress and ensure every employee is seen, valued and heard.

It's clear that retail teams need better support. Adopting communication and recognition processes that are direct, easy and cater to workers’ needs will only enhance efficiency and help meet industry-wide quotas. Whether that’s production for warehouses, sales for shop assistants, or lowering retention rates for HR and operations managers, everyone stands to benefit.

Sheila Stafford is the CEO and co-founder of TeamSense, an app-free platform connecting hourly workers with their companies.