Retail Turnover Rates In 2024

High turnover rates in the retail industry can hinder success and outstanding customer service. Turnover disrupts the quality of service, adds expenses to a business’s bottom line, and can impact overall workplace morale. 

As of February 2024, the average total separations rate for the retail industry was 4.3% compared to 3.5% across all sectors, according to the U.S. Bureau of Labor Statistics.¹

The separation rate is a workforce-related metric that measures the percentage of employees who leave a company within a certain period, similar to the turnover rate. However, the separation rate focuses exclusively on the total number of separations, which can include resignations, layoffs, dismissals, and retirements.

It is calculated by dividing the number of separations by the average number of employees during the period and multiplying by 100.

Retailers face high turnover rates and a competitive labor market, complicating recruiting and retaining employees. 

The Negative Impacts of High Turnover in Retail  

Low employee retention can negatively impact workplace culture and team bonding, reduce the overall company knowledge base, harm customer service and rack up a variety of costs, which may include: 

• Departure costs: Time dedicated to determining the last pay, severance benefits and securing equipment such as company computers or tools.
• Lost production: Gaps in production or project progress when experienced staff members leave. Customer service and sales can also suffer when employees who are knowledgeable and engaged with clients and prospects depart.
• Overtime costs: A loss in production may lead to overtime expenses as more experienced staff fill in gaps.
• Recruiting costs: This may include hiring a recruiting firm or advertising service to find a replacement, selecting interview candidates, conducting interviews, handling background checks and testing.
• Onboarding and training costs: Processing new employee data, integrating data into payroll and benefits systems, and training new workers on tactical job requirements, company policy and culture.

Causes of High Turnover in Retail 

According to McKinsey, the top five reasons why retail employees leave their jobs include:²

• Workplace flexibility: 34%  
• Career development: 32%  
• Health and well-being: 29% 
• Compensation: 29%  
• Meaningful work: 27%  

How to Reduce High Turnover in Retail With an Employee Retention Strategy

Every company needs to know its employee turnover rate. Understanding your turnover rate is a great starting point as the rates vary even within the industry. This information will help to project the savings and also break down the types of turnover, which can be voluntary, involuntary and retirement. Once you know your turnover rate, there are some strategies that can be applied to reduce it. 

Competitive, Modernized Pay

Attractive and competitive pay not only involves how much an employee gets paid but also how often. Forty percent of hourly workers say they would benefit from getting paid more frequently at work.³

Better access to earned wage access — also known as on-demand pay — helps employees manage and overcome their financial stress, avoiding adverse effects on productivity and morale. Sixty percent of DailyPay users surveyed say that DailyPay helps reduce their financial stress.⁴

Outstanding Employee Benefits  

In addition to the standard benefits package that employees expect, a comprehensive benefits package that goes above and beyond competitors will give a hiring edge and contribute to employee appreciation and retention. Seventy-three percent of employers who offer DailyPay say it is an important piece or cornerstone of their approach to financial wellness benefits.⁵

Support Employee Financial Wellness  

Employees are looking for ways to improve their work/life balance and reduce their stress levels. When employees are dealing with personal or financial stress, they may perform their jobs poorly or with less efficiency.

Employers can further help employees through financial wellness support. This can include personalized financial counseling, financial education courses, debt reduction programs and support groups. 

Additionally, companies can offer employee wellness programs that include fitness perks, work-life balance initiatives, and more. 

Employee Growth and Development 

Supporting employees in their career growth and development will help set them up for success. 

According to Forbes, 70% of employees would consider leaving their current job for another organization that would invest in their development and training.⁶

Employers should consider how they can assist employees in upskilling and progressing their careers within the company instead of pursuing outside opportunities to further their careers, such as leadership training courses and classes. 

Rewards and Recognition

Recognizing employees for their hard work can play an important role in motivating and retaining employees. 

According to Great Places To Work, a culture of recognition can play a significant role for companies. Employee recognition can help improve employee retention, employee engagement and job performance.⁷

Employers should consider how to improve their reward and recognition programs with meaningful rewards that tangibly help employees.

With Reward by DailyPay, you can recognize and incentivize employees with cash rewards in real-time. Reward helps employers leverage DailyPay’s power to increase retention and engagement even further while driving behaviors that matter most to their business.

Support Retail Staff and Increase Retention With On-Demand Pay  

Employers need to align their retention strategies with employees’ expectations. 

Employers must invest in their employees with competitive pay, outstanding benefit packages, opportunities for career growth and more flexibility in their work to increase engagement and employee happiness. In retail businesses, these higher levels of employee happiness and engagement lead to better customer retention.⁸

Among those in the retail industry who previously looked for a new job, 56% have stopped or slowed their search since they started using DailyPay. Forty-nine percent attribute the change in behavior to DailyPay.⁹

Learn more about how financial wellness benefits from DailyPay can help.