How to Reduce Retail Turnover Rates with Better Internal Communication

Every company deals with employee turnover, but the retail industry tends to have some of the highest reported retail turnover rates among all employers. The most successful retailer in America, Wal-Mart, even faces a steep employee turnover rate – which, according to Bloomberg, could be as high as 60% annually.

When you consider it costs about $3,400 to replace a retail associate, you begin to understand why turnover is such a problem.

That’s why many retailers have been striving to find ways to reduce turnover by retaining their employees, instead of suffering through a constant churn of workers. Here are three ways retailers can reduce turnover by improving employee communication.

1. Start with Employee Onboarding

Companies with effective internal communication are 50% more likely to have employee turnover rates below their industry average. The best way to improve your internal communication is by introducing your communication philosophy during employee onboarding.

The US Chief Executive of Uniqlo, Larry Meyer, says he thinks about retaining employees constantly for the Japanese retailer. “We feel we have to enrich them,” said Meyer. “If people are happy, the retention rate is high. If not, the retention rate is low.”

Onboarding involves communication from every level. Uniqlo relies on tenured employees to train new associates. Instead of throwing new employees into the fire right away, newbies are paired with a veteran associate, or even better, a sales manager so that they can learn the ropes in a less stressful environment. Uniqlo employees are also encouraged to continue learning different skills long after training is over.

2. Communication is a Two-way Street

Internal communication among retail employees is too often a one-way street. The problem is retail associates are the first to discover problems at the store level but are rarely heard by management when they speak up which over time discourages employees from communicating issues.

Retailers should be maximizing their biggest asset by eliciting regular feedback and encouraging staff to alert management of issues they see and process improvements that could drive organizational change. Whether it’s a group messaging or monthly surveys, the wisdom of your staff is more powerful than you think.

Most importantly, show them you value their suggestions by acting on them to let them know their feedback isn’t falling on deaf ears. Starbucks did this with their My Starbucks Idea initiative, which has now been opened up to their customers as well.

3. Go Mobile to Avoid Retail Employee Turnover

Your staff is already texting one another. Why not make that style of communication inherent to your internal communications? 72% of employees already own smartphones, offering an internal communication tool to your retail associates is a perfect way improve (and track) internal communications.

This allows associates and sales managers alike to stay in regular contact, creating a feedback loop that enhances performance. Home Depot made the leap into mobile when they provided their employees with mobile devices so they can quickly locate products, relay information to customers, and more.

Internal communication initiatives aren’t just for improving your company culture or customer service. They can also make a significant impact on a retailer’s bottom line. According to CNBC, engaged and motivated retail employees contribute 69% more revenue than those who aren’t. By working toward better internal communications, your company could see performance gains that your competitors will envy and sees better retail employee turnover.

Download our free white paper, “Retail Industry Trends in 2020” to learn more about how retailers are combating high turnover rates.