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Labor turnover in the retail industry

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Retail salespeople tend to cycle through jobs at a pretty good clip, quitting or changing jobs at a higher-than-average rate. However, in this slow-to-recover economy, some workers are reluctant to leave their jobs, and some companies are trying to reduce the high costs of employee turnover by providing incentives for them to stay on over the long term.

For many workers, retail is a way station -- a job that provides a little extra money while they're in school, working another full-time job or caring for a family. The vast majority of retail salespeople worked hours other than Monday through Friday, 9 to 5, according to the U.S. Bureau of Labor Statistics. About 34 percent worked part time.

But even though retail jobs have atypical hours, they aren't always flexible when an employee needs to leave work for a child's illness, a doctor's appointment or other pressing obligation. That combined with the modest pay (a median $9.94 per hour in May 2010, according to the BLS) and limited advancement opportunities at many companies make these jobs tough to hang on to.

Turnover rates in retail sales are predictably high compared to other sectors. According to an analysis of BLS data by the National Retail Federation, nearly a quarter (24.6 percent) of retail workers voluntarily left a job in 2010, substantially above the national average of 16.4 percent.

However, retail employees have been less likely to quit their jobs since the recession hit in 2008, according to the BLS. The monthly quit rate hovered between 2.5 and 3.9 percent from 2001 to the early part of 2008. After the recession hit, the rate sank, falling below 2 percent for much of 2009. It has recovered somewhat since then, reaching as high as 2.4 percent in May 2011. But retail workers still appear to be less willing to jump ship than in the pre-recession economy.

That's OK with some companies, who factor in the turnover rate as one of the costs of doing business. However, those costs can be steep, even when the workers are at the bottom end of the pay scale. The cost of turning over an $8-per-hour job ranges from $3,500 to $25,000, according to a roundup of industry studies by the Sasha Corporation, a Cincinnati-based human resources and consulting firm.   

To reduce those costs, some companies offer a range of incentives to keep full- and part-time workers around for the longer term.

The Container Store has been particularly proactive about retaining employees. According to its job listings, part-time employees are eligible for benefits, including paid vacations, 401(k) plans and medical, dental and vision insurance -- even pet insurance. Full-time workers can also get paid maternity and paternity leave, among other perks. Other retailers offering benefits to both full- and part-time employees include Starbucks and Wegmans, a Rochester, N.Y.-based grocery chain that has a fanatically loyal base of customers and employees. 

Not every worker needs an employer like Wegmans or The Container Store. Sometimes a short-term, low-commitment job without benefits or long-term career prospects fills the bill. And these people will doubtless find plenty of opportunities. The number of retail sales jobs is expected to grow 8 percent between 2008 and 2018, about as fast as average for all occupations, according to the BLS. But the agency is projecting a disproportionately huge number of job openings during that period: about 374,700, more than in almost any other occupation.

Last Updated: 14/11/2011 - 11:57 AM

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