It's easy to take employees we see every day for granted.
The barista at Starbucks every morning. The happy hour waiter on Friday after work. And of course, the people bagging your groceries to help you get out the door as quickly, and easily, as possible.
But why do we take them for granted? Likely because they don't last at their jobs that long.
So, what factors create this frequent rotation? Let's explore this idea from the vantage point of grocery stores, as well as the ramifications for businesses - and consumers - and potential solutions.
Grocery store employees have become an ever revolving door of employment. Given the broad hours these businesses are open, it's provides a flexible opportunity for students - both high school and college - who often have bursts of free periods at odd hours. As entry level positions, it's an ideal temporary job to help pay for tuition, or even just to have some extra spending money.
Eventually a student will graduate or move on to a new position, so it makes sense that hourly employees have a good amount of turnover, and it's backed up by exit data. Rush Buchanan notes that grocery stores found that within the average turnover rate, a large, "percent of the departures [are] voluntary."
The Cost of Doing Business
Grocery stores face an incredibly high level of turnover. The Hay Group reports that the median turnover rate for part-time retail employees is around 67% - with some claiming rates of 100% and beyond - of which the cost to replace an employee can be incredibly high.
The Center for American Progress conducted a study that concluded that to, "find, hire, and train a replacement for a $10/hour retail employee" costs around $3,300. For companies with large numbers of employees, this dollar amount adds up quickly. Keystone, an employee search firm, found that some cases can cost, "between 75 and 100 percent of the position's annual pay." Facing financial hurdles related to turnover, it's no wonder that the Canadian Grocery HR Council classifies it as, "an expense without an invoice."
With these factors in play, the fallout for businesses benefits no one. In economic downturns, customers are typically spending less, so the already narrow profit margins of supermarkets tightens even further. During financial upticks for consumers, the constant swap of employees can leave stores understaffed, decreasing service available for patrons and driving them to spend their hard-earned dollars elsewhere.
Coupled with the ever-rising minimum wage (or even voluntary spikes for shops in desperate need of staff), it's no wonder employers are focused on ways to retain team members.
Keeping all this in mind, there are many ways that retail employers can find assets better suited to stay long-term.
Naturally, it all begins with hiring. Bob Phibbs, known as The Retail Doctor, considers hiring the wrong people one of the key reasons turnover runs so high, and credits poor hires to interview fatigue for hiring managers. Incorporating a personality assessment into the application process can help weed out candidates that don't fit the requirements for the position. For these types of positions, stores typically want someone flexible, good with customer service, and patient. Approaching interviews with an understanding of what type of person you can expect streamlines your candidate pool, creating a far positive experience on both sides.
Incentives also play a key role. Providing a clear path of growth for employees gives them a tangible set of goals to achieve, and keeps their employment focused in-house, instead of wandering externally. Starting with a pay above competitor's can also be key. Whole Foods Market aims to empower its staff with wages higher than the norm, and find its turnover is much lower, about 15 percent.
Another chain, Wegman's, combines both ideas of quality pay and hiring candidates that can embrace a "high level of autonomy regarding decision making," coupling personality and incentivization to deliver a turnover rate of just 7%.
A final idea to consider is the consumer's impact on high grocery store turnover. While employers battle to retain profits by lowering turnover, the business isn't the only party that takes a hit. Increased expenses need to be made up elsewhere; often this results in small but regular price increases.
Thankfully, we're already seeing that organizations taking the time to find quality employees - and reward them well - are seeing success, and the long-term fiscal impact on consumers has been minimal.
Looking to find long-term employees that fit your exact needs? Request a demo of our visual personality assessment.