High turnover is a given on the frontlines. In grocery, estimates put the annual associate turnover between 40% and 50%. In retail, it’s higher at 81%. Both figures dwarf the US’s average annual turnover rate of 23.4% across workers in all industries.
Even still, these numbers probably don’t shock you. For a long time, high associate turnover has been accepted by the industry as ‘just the way it is.’ The constant cycle of recruiting, hiring, onboarding (and then doing it all over again) is accepted as the status quo.
But this kind of thinking is on its way out.
The disruption of the past year has accelerated change on the frontlines and called into question many of the things we took for granted. Rising customer expectations, coupled with ever-tightening profit margins, means that it’s worth taking a closer look at your frontline employee retention strategy.
The compounding costs of employee turnover
Replacing a part-time retail worker costs about 16% of their annual salary—for an associate making $10 an hour, that adds up to over $3,000 per associate.
On an organizational scale, the price tag of turnover is steep. But that’s not the only reason you should be thinking about how to reduce employee turnover.
The fallout of high turnover trickles down to the customer, leading to gaps in the customer experience and inconsistencies in the in-store experience. Meanwhile, customers are becoming less and less forgiving of service missteps: 73% of consumers will stop doing business with a brand after three or fewer poor customer service experiences.
On top of all that, high turnover is a canary in the coal mine of bigger employee engagement challenges. There’s a clear correlation between high employee engagement, low turnover and better business outcomes. In fact, in a study of frontline convenience store employees, the Coca-Cola Retailing Research Council (CCRRC) found that stores in the top 20% of employee engagement also scored significantly higher across key dimensions of customer service than those in the bottom 20%.
Engaged employees stick around longer, saving the costs associated with turnover. But they also deliver better, faster customer service and serve as your best brand ambassadors. It’s a win-win.
See how you can boost frontline employee engagement with a tool they love to use.
Essentials of frontline employee retention
How do you improve employee retention and boost engagement?
There are the foundational components, of course, like wages, hours and benefits. But it doesn’t end there. There are many other components that go into an employee’s decision to stick around or leave a job.
Based on our experiences working with some of the world’s largest frontline employers, here are three critical factors:
A focus on employee well-being
When the CCRC asked convenience store employees what matters most to them in their job, the number one answer was: “My employer cares about my well-being.”
The COVID-19 pandemic put a spotlight on frontline employee well-being. They dealt with greater risk of exposure to the virus as well as stress and burnout due to challenging working conditions.
One employer who has seen firsthand the impact of a focus on employee well-being is Longo’s, a premium Canadian grocer with a workforce of 6,000. Prior to the pandemic, their turnover was around 26%. Now, it’s around 19%. They also saw their employee net promoter score improve by 300% during that same time frame.
Liz Volk, CHRO of Longo’s, attributes these impressive results to the increased care and investment that Longo’s put into frontline employee health and wellness over the past year.
They acted early to safeguard frontline employees’ safety with mask mandates and rapid testing. As the pandemic progressed, they turned their attention to well-being, promoting their employee assistance plan and hosting special sessions to encourage various aspects of well-being. They communicated with the frontline regularly to share resources, recognition and updates.
The dramatic drop in turnover and increase in employee satisfaction, especially during such a challenging and turbulent time, is a powerful illustration of what happens when employees know that their employer cares for their well-being.
“I think that’s really given our teams confidence,” said Volk. “Because if they feel confident and secure in their roles, then they’re going to deliver that exceptional service for our guests.”
Hear more about how Longo’s supported their frontline right through the pandemic.
A sense of mastery
The vast majority of people want to do good work, and frontline employees are no exception. And on the flipside, there’s nothing more demotivating than feeling like you’re failing at your job.
Helping employees master their role is critical to sustained engagement. Harvard Business Review reports that new hires are 69% more likely to stay longer than three years with good onboarding. Given the pace of change on the frontlines, ongoing training and communications are also critical to helping employees perform their best.
Demond Winfree, a store manager with At Home, has seen this play out in his store. After At Home partnered with Axonify to deliver ongoing training to associates in 3-5 minute sessions each shift, he saw a big change:
“Axonify has helped reduce turnover because my team is learning on an ongoing basis, so they have more confidence in their role,” he explained. His store’s annual turnover rate dropped from 71% to 25%.
In Winfree’s experience, it all comes down to helping people do their best work.
“I tell my leadership teams that no one comes to work to do a bad job. Most people want to do well, so it’s our job to create an environment where we inspire and give them the tools and resources to achieve their best.”
Opportunities for growth and development
One of the best predictors of turnover, according to Gallup Research, is whether an employee has the opportunity to learn and grow at work. They found that 92% of employees who felt they had these growth and learning opportunities planned to be with their companies a year later.
Unfortunately, that’s not the reality in many frontline jobs, where training stops after onboarding. It’s no wonder many associates feel they’re in a dead end job, from which they’ll have no choice but to move on.
Leading frontline employers are changing things up to provide more opportunities for career paths that keep associates growing in their organizations.
Take Wakefern’s People on the Move program, for example. This program takes associates from various departments and gets them involved in growth and development across the store. They also showcase newly promoted associates in short videos, where they share their experiences firsthand. This is changing associates’ perceptions about what a career at Wakefern can mean.
“I see that there’s a huge opportunity for career-pathing and job rotation for associates in our industry,” says Jessica Gasser, VP of HR, Retail Operations at Wakefern. “As the business is shifting in some capacity, and technology is introduced more and more into the ways we do everything, I think it provides tremendous opportunities for associates to learn and grow, contribute and use skills that are very relevant to the population today at all age levels.”
Wakefern’s investment in ongoing training and development for their frontline pays off, not just for employee retention but also in their customer satisfaction. They’ve observed firsthand that high engagement in training correlates with higher associate engagement and higher CSAT scores.
Employee engagement—without taking them off the floor
Identifying the key factors for frontline employee retention is one thing. But making them happen within the constraints of the frontline environment is a whole different story.
The frontline works staggered shifts across multiple locations, and they’re on the floor for the majority of their shift. This means that many of the traditional channels for team communications and training (think team huddles or day-long training sessions) just don’t work.
A frontline-first employee retention strategy prioritizes:
- Focused onboarding that gives employees only the things they need to know to feel confident performing in their new roles
- Short bursts of ongoing training in the flow of work, to sustain and grow their knowledge
- Flexibility to pursue additional training activities they can complete at their own pace
- Consistent, timely communications to keep them in the loop about company news, mission and values, promotions, kudos and more
Learn more about how frontline-first training and communications can turn your turnover problems around.