Low unemployment rates may prove to be a thorn in retailers’ sides this holiday season, according to one survey.
Korn Ferry, an organizational consulting firm focused on talent acquisition, surveyed HR and compensation executives at 53 retail organizations this month. Twenty-nine percent of respondents said they’ve seen an increase in employee turnover since the beginning of the year.
Part-time hourly store employees experienced the highest turnover rate of all retail positions, with 81 percent average rate in 2018, up from 76 percent in 2017.
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Retail corporate positions, meanwhile, saw the lowest, with an average rate of 15.6 percent in 2018. This is still up, however, from 13 percent last year.
“Retailers are in a Catch-22 situation this holiday season,” said Craig Rowley, Korn Ferry senior partner, retail and consumer. “While high consumer confidence and a strong economy mean year-over-year sales are predicted to grow, low unemployment means there just won’t be enough workers to fill retail positions. To combat the situation, retailers are in a bidding war for hourly retail workers, and they are giving existing workers more hours to fulfill the need.”
The No. 1 reason for leaving? Better opportunities or promotions. This was trailed by more money and a desire for more hours.
When respondents were quizzed as to what they intend to do curb turnover, training and “career pathing” were given as the top answers. “Better communications on the employee value proposition” and “changes to compensation packages” followed.
About that compensation: Merit raises for 2018 were predicted to be around 3 percent, keeping in line with previous years. Starting wages, however, are expected to rise because of this competition. Thirty-four percent of respondents said they gave wage hikes to existing employees in 2018 to put their salaries on par with increased starting wages, and 95 percent said the issue will be addressed by the end of 2019.
Rowley offered this advice: “Retailers this holiday season have to be creative when filling vacant positions, especially at the store level. To retain top employees, employers need to lay out clear career paths, offer training and pay competitive wages. It’s critical that employees feel nurtured and that they feel part of the organization instead of just having a job.”
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