The labor shortage has captured a lot of attention—it's a big issue for our independent retailers, prompting IGA to commission a study examining the real reasons for the shortage in our industry. And with 49 percent of small business owners reporting that in July, they had job openings they couldn't fill, the shortage goes beyond the grocery industry.
As retailers struggle to attract new talent, it's imperative that they retain the talent they currently have, as they risk losing their best staff to competition offering incentives employees are seeking, including: flexible work arrangements, benefits, professional development opportunities, advancement opportunities, strong corporate culture, and higher pay.
While hiring has been an issue in the grocery industry long before the pandemic, historically IGA's turnover rate has been low, with some employees having spent 20, 30, and even 40 years or more working in our stores. But all that's changed since the pandemic. Today's average turnover rate is 57.3 percent—up 12-15 percent from the previous four years—and no one is immune.
"We're seeing employees come on board quickly and then leave just as quickly over the smallest of issues, like being told not to use their cell phone while on the floor," IGA CEO John Ross has said. "If we're going to turn around labor issues in the grocery industry, it's going to take a major change—not just in the way we market and talk about our jobs, but also in the way we work to keep the employees we hire."
With so many available jobs and such steep competition to attract employees, how can IGA retailers retain their best talent? First, retailers must identify and understand the most common reasons for employee turnover, which we will reveal based on the research findings from our study. Then retailers can use the recommended best practices for dealing with each of those reasons.
Reason #1: Pay
The first and most obvious factor is pay. Many retailers face labor shortages despite an increase in hourly wages. Compensation is not necessarily a reason employees stay—they might stay for the flexible hours or the strong camaraderie with co-workers—but it can be a major reason they leave.
Best Practice: Regularly Adjust Your Compensation
There are multiple employment opportunities available now, and individuals can easily find out how much they might be paid elsewhere. And while new recruits may be offered current market rates, long-term employees may still be receiving last year's rates if their pay has not been adjusted accordingly. Ensure all of your employees are earning this year's market rates to ensure fair pay.
Reason #2: Management
In retail, the relationships between employees and managers are critical to employee retention. You've probably heard the saying, "Employees don't quit companies; they quit their bosses." Management matters, but leadership is generally what matters most. Many of the other significant causes of attrition identified in our research originate from the leadership category.
Consider that the most important decision you make at your store is who you select for your management team. Nothing can undo a terrible consequence of designating the wrong person as a supervisor.
Best Practice: Develop Your Managers & Supervisors Early
Leadership training for managers and supervisors should be an ongoing process. The transition from employee to supervisor is particularly hard for many people. When selecting a new leader, take into account established leadership attributes such as integrity, vision, judgment, passion, courage, empathy, and emotional intelligence.
Reason #3: Training
Almost a third of retail workers quit their jobs within the first 90 days of employment. Employees who had a bad onboarding experience as a new recruit are twice as likely to search for other jobs in the near future. According to Glassdoor, standardized employee onboarding boosts retention by 82 percent and productivity by more than 70 percent. The fact that onboarding and retention are linked is no longer a rhetorical question—it is a fact. Basically, we start retaining employees from the moment we hire them.
Best Practice: Standardize Your Onboarding Processes & Involve Your Team
When you implement a standardized onboarding process, every new hire knows what to expect. Hybrid programs (on-the-job training + e-learning, for example) produce the best results, so use the IGA Coca-Cola Institute, which provides many online training classes for free with your IGA membership. The programs offer self-paced training on mobile or desktop with student compliance tracking, learning plans, and a built-in library of 250 supermarket-specific courses. Assign a mentor to a new employee for an excellent addition to your extended onboarding process. Mentors provide direction and serve as a sounding board.
Reason #4: Burnout
Many of the best workers avoid letting their employers know they are being stretched too thin because they don't want to look bad in the eyes of their superiors or because they think they would be letting down their peers.
Best Practice: Look for Stressors & Train Your Leaders To Help Their Teams In Challenging Times
As a result of public outrage and employee pressure, some retailers updated their policies to allow for paid sick leave. Consider the elderly, immunocompromised individuals, those with underlying illnesses, or those who care for senior family members in your updated policies. In addition, the pandemic highlighted the value of workplace communication. Their thoughts, questions, and concerns should be welcomed at any time.
Gather employee insights and listen to your teams. When it comes to employee retention, you don’t have to guess at what will work. Find out from your current and former employees! Employee satisfaction surveys and interviews allow you to ask people exactly what it would take to make them stay, while exit surveys can help you learn exactly why they’re leaving.
Need more resources? Read How to Attract New Talent and purchase "Now Hiring" signage here.
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