February 2017
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February 2017
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Turnover Is Tremendously Costly in Retail

Tuesday, January 24, 2017

Several major retail chains, including Walmart, Lowe’s, and J.C. Penney, are redirecting resources to accommodate their customers' experiences. In what might be considered a return to traditional retail values, these companies are redirecting money from store numbers and operations to training the staff that deals directly with shoppers. The move is designed to improve sales, but the efforts are also designed to boost recruitment and retention during the economic upswing, which has created more competition in the labor market. While sales is a driver, the root of the challenge is employee turnover. Retailers, in a fight for good talent, are trying to create better places to work. And for good reason. The price of replacing a worker who makes less than $30,000 a year is about 16 percent of that employee’s salary, according to the Center for American Progress. With the average retail employee in the United States making right around $21,000, the cost for one employee leaving is $3,400, according to the Bureau of Labor Statistics. The average turnover rate for retailers was 5 percent in 2015, according to Bloomberg, which would translate to roughly $170 million per month for Walmart, given the average rate. 

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