Retail employees are finding it harder to stay put this year--forcing employers to focus more on retention.
Employee turnover in the industry is picking up as stores and e-commerce sites report solid first-quarter sales and boost their hiring, according to the latest survey from global consulting firm Hay Group.
Blame the rising turnover on the confidence factor: as more jobs become available, workers feel better about ditching their current jobs for more rewarding work.
Most of the retail turnover has been occurring among hourly workers at stores and distribution centers. The turnover rate among part-time store workers is now at 67%, up from 51% in the first quarter of 2011. The turnover rate among part-time distribution workers is now at 22%, up from 17% in the first quarter of 2011.
Another area of heightened turnover is salaried e-commerce positions. The turnover rate at e-commerce corporate offices has nearly doubled from the first quarter of 2011. The rate is now at 18%, up from 10% in the same period last year.
In the retail business, more available job opportunities inevitably means more turnover, said Maryam Morse, national reward practice leader of Hay Group's retail practice. U.S. retailers added 29,300 jobs in April, according to the Bureau of Labor Statistics.
"With more part-time store and more e-commerce jobs becoming available, it's not as scary to jump ship and seek out better employment," Morse said.
For the remainder of 2012, 82% of the retailers surveyed expect to see the most turnover among their hourly store workers. That could lead to a shift to more full-time opportunities in the industry, she said.
Turnover concerns among retailers have led to a greater focus on retention, according to the survey. The majority of retailers surveyed consider improved training and the availability of more career opportunities as a better means of retention than pay increases or other compensation perks.
"Pay is an important factor, but it's a hygiene factor. It needs to be there and feel equitable," Morse said. "Once that's done, pay doesn't really drive engagement. What employees are looking for in the long term is a career promise--'tell me what my opportunities are and how I can grow here.'"
The Home Depot's vice president of talent management, Arlette Guthrie, said the Atlanta, Ga.-based home improvement retailer puts an equal emphasis on training, career opportunities and pay increases to retain talent. In 2006, Home Depot paid its hourly employees a combined $25 million in bonuses as part of its "Success Sharing" program. It increased that bonus program throughout the recession and up to $142 million in 2011.
"One of our core values is taking care of our people," Guthrie said. "We look to connect to them to the organization and make sure there are opportunities for growth. But we also look to make sure we are paying our employees competitively and giving them the best benefits."
Turnover rates among managers and assistant store managers in the retail industry have remained relatively flat in the first quarter of 2012, the Hay Group found. The rate of executive turnover in the retail sector has declined so far this year, now at 3%, down from 5% in the first quarter of 2011.
The Hay Group surveyed 54 major U.S. retailers including OfficeMax, PetSmart, Ross Stores, The Limited and Zale Corporation to determine the rate of turnover for key positions within their organizations.
Write to Damian Ghigliotty at Damian.Ghigliotty@dowjones.com
