Retention Getters

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Retention Getters

By Ann Meyer - 09/15/2013

Ask, don't tell.

Those simple words might do more for a company's retention rate than boosting compensation or adding an expensive perk, experts say.

Asking workers for their input isn't just common courtesy or common sense. It's been shown to boost employee engagement.

Retailers frequently suffer from high turnover rates, but they justify it as an industrywide problem stemming from low wages and slim margins. Even as low wages have become a hot button, with protests by Walmart workers putting a spotlight on the topic, compensation isn't the only factor contributing to turnover, experts say.

"Compensation is not what keeps people at a company, and it's not why they leave. They leave because they're not engaged, not committed," says Shawn Talley, director of human resources at NovaSom in Columbus, Md.

"Compensation is not what keeps people at a company and it's not why they leave. They leave because they're not engaged, not committed."

– Shawn Talley,

NovaSom

"If my supervisor is making my life hell, if he isn't being flexible, giving me an opportunity, isn't recognizing my accomplishments or the fact I worked extra hours and every Saturday and [he] didn't say thank you to me; that's why people leave companies," says Talley, a former human resources manager at Home Depot.

Given that, retailers who feel they can't afford to pay more still can work to improve retention through communication and empowerment. "You don't have to pay them more. You don't have to give them stock in the company. But you have to give them a sense of pride, a sense of ownership," says Randi Busse, president of Workforce Development Group in Long Island, N.Y.

By making a concerted effort to improve retention, retailers can reap long-term benefits. The cost of replacing an employee is generally between 75 percent and 150 percent of the position's first-year salary, Talley says.

But high turnover also has a ripple effect on other employees and customers, Busse says. It changes the workplace culture. If employees are seeing a revolving door of people leaving, they can ask themselves, "Why am I staying?" Busse says.

Poor morale also impacts customer relations, as disgruntled employees are less likely to go out of their way to serve shoppers. "Customers are looking for continuity and relationships with people who serve them," Busse says.

Improving retention often starts with measuring morale, and human resource experts say the best way to do this is to ask employees directly for feedback and suggestions for improvement, says Beth Carvin, CEO of Nobscot Corp. in Hawaii.

Companies that don't ask and think they have the answers themselves often don't solve the problem. One company Carvin worked with had held a sales contest to generate excitement among their employees, but it backfired by hurting morale. "[The employees] felt a lot of pressure from the sales contest. Instead of enjoying that, it stressed them out, and people were quitting left and right," she says.

Carvin advises retailers to survey new employees as part of the onboarding process, to identify any miscommunication to new hires. One survey her firm offers asks, "What do you now know that you wished you knew when you first started?" The responses tend to identify misunderstandings about schedules, training, benefits or commission payments.

"After you identify your issues, it's working to craft your solutions. We usually recommend to have a cross-functional team perhaps working on what are those retention solutions going to be," Carvin says. "Then start to create a retention roadmap."

Keep in mind that what works for one employee won't motivate another. Millennial workers often value work-life balance, while baby boomer workers might prefer to work regular hours or earn overtime, says Elizabeth Cogswell Baskin, CEO of Tribe Inc., an internal communications agency.

Morale-boosters can be as simple as helping workers identify a career path within the organization so they have a goal to work toward. "It's good for the company because it wants to build leaders, but it's also good for the employee," Baskin says.

"It's good for the company because it wants to build leaders, but it's also good for the employee."

–Elizabeth Cogswell Baskin,

Tribe Inc.

Other low-cost solutions include making schedule improvements or offering flextime once a month to allow workers to schedule doctor's appointments without having to take a personal day, Busse says.

Communication costs nothing, yet it is at the core of recognition and empowerment.

At a minimum, supervisors need to say "please, hello and thank you," Talley says. But they also should be meeting with employees one-on-one on a regular basis to provide an update on the company or department, discuss any problems or potential challenges, and provide information about new hires or newly promoted workers, as well as opportunities for advancement.

While supervisors might think it's more efficient to communicate information to a large group, employees like individual attention. "As human beings, when you talk to us as a group, we don't believe you're talking to us as individuals," he says.

During the discussion, supervisors should provide positive feedback and take questions or suggestions.

Talley recommends companies make retention a long-term process, not a short-term program. An employee retention program is likely to survive only as long as its leader is active in it. But making retention part of the performance review process for managers and supervisors, and holding them accountable for it, will allow it to become part of the company's fabric.

Just as supervisors need to recognize the efforts of front-line workers, so should retail executives congratulate supervisors whose departments have above-average retention rates.

"The largest motivator for workers is recognition," Talley says, "Desired behavior that is acknowledged will be repeated."

Ann Meyer, who serves as senior editor of Retail Leader, also is president and CEO of L3C Chicago L3C, a media services firm.