This Problem is Costing Businesses a Fortune

I was staggered by a recent post from Gallup, stating that voluntary turnover is costing US businesses $1 trillion dollars. That number has too many zeros for me to even contemplate. Sure their annual turnover rate is higher than ours at 26.3% compared to 8.1% (as reported by the ABS last year). However hospitality is right up there with 16% turnover and retail is just below the average at 7.6%. I blogged a while ago that the cost of lost productivity in Australia costs businesses $3.8 billion (source PWC), which is an incredibly large number.

No business can afford to lose their best people, yet unfortunately that is happening. With competition at an all-time high, and getting tougher, retailers have to do everything they can to retain their best people. Losing your best people impacts internally by breaking down team morale, and externally through lost customer relationships. Customers dislike it when they build strong relationships with sales staff and they are no longer there.

What can you do as a business owner or store manager to reduce the number of staff who are leaving? Some might think not much, yet a large part of the reason people leave is controllable and therefore can be improved.

According to data from a recent LinkedIn survey the main reason (45%) why people leave is because of the lack of opportunity to advance in the organisation. This can be challenging for some retailers with fairly flat structures, however, just talking with your team about their ambitions and goals could help to unlock opportunities.

The next two highest reasons for staff wanting to leave are all to do with the organisation. 41% stated that they left because they were unsatisfied with the leadership and 36% because of the environment and culture. Wow, very controllable and critical to get right unless you want your turnover to continue to climb.

I have mentioned many times about the importance of great leadership and developing a positive culture and this is reinforced by the turnover percentages. Gallup also found a direct correlation with leadership and turnover. In their survey 52% of voluntary exiting employees say their manager or organisation could have done something to prevent them from leaving their job. Great leadership plays such an important part in recruiting and retaining the best people.

Furthermore, a staggering 51% of exiting employees said that in the three months before they left, neither their manager nor any other leader spoke with them about their job satisfaction or future with the organisation. I know it takes time to talk with our team, when we are so busy already, yet if we don’t find the time to have meaningful conversations on a regular basis we are going to be even busier trying to plug the holes when our best people leave us.

Please find the time to have a conversation with your team members about what matters to them, if you do you may have a shot at keeping your best people and beating your competition.

Roger Simpson – CEO, The Retail Solution and Author of “The Ultimate Retail Sales Experience” With over 35 years’ industry experience, Roger Simpson is recognized as Australia’s #1 Authority on customer ROI in the retail industry and as a global expert on staff coaching, customer service, and selling skills.