High attrition in retail is nothing new: annual employee turnover among frontline retail workers has been at least 60 percent for a long time. Retailers regularly face the challenge of replacing more than half of their store staff every year. But that challenge has grown amid record inflation and a continuing global pandemic: half of frontline retail employees are considering leaving their jobs in the next few months alone. Perhaps worse, 63 percent of frontline retail managers are thinking about quitting in the near future. And many of them do not want to work in retail anymore.
No other US industry is more affected by the “Great Attrition” than retail, simply because it employs more people than any other sector in the US economy. The following six charts show highlights from our research involving more than 1,000 US frontline retail workers across a range of retail formats, including grocery retailers, big-box stores, department stores, restaurants, convenience stores, and other small formats. These charts illustrate the attrition problem in US retail—but also point the way to potentially powerful solutions.
By understanding what frontline workers want in a job, retailers can create a competitive advantage. Our research shows that frontline employees at the leading retailers are twice as motivated in their day-to-day jobs and leave half as often. At the best frontline retail employers, comparative-store sales are three percentage points higher than at low performers. If retailers simply continue business-as-usual approaches to hiring and retention, they risk chronic staffing shortages for the rest of 2022 and beyond. Attracting, developing, and retaining frontline talent must become a top agenda item for retail CEOs.
This research complements our experience working alongside leading frontline retail employers. Our findings suggest four imperatives for retailers:
- Understand your frontline talent pools and build a distinctive employee value proposition. The frontline retail workforce is large and includes a diverse set of workers with a wide range of needs. Retailers must identify the talent pools that fit best with their company, determine what matters to those segments of workers, and develop an employee value proposition tailored to the unique needs of those employee segments.
- Innovate to offer differentiated flexibility. While office workers have seen an increase in flexible work, flexibility remains the most pressing issue for frontline retail employees. In pursuit of more flexibility, many have left traditional frontline jobs to take on gig work. Retailers must think more creatively about how to offer flexibility on the front lines—for instance, by providing options for employees to increase or decrease their hours to accommodate their other part-time jobs, allowing them to work at other store locations on certain days, and giving them more control over how their work gets done.
- Simplify frontline retail jobs and make them more engaging. A lack of meaningful work (boring or repetitive work, work with little social impact, or work with no connection to the mission of the organization) is a top five driver of frontline retail attrition. The most innovative frontline retail employers are investing in technology to automate activities, freeing up time and energy for more meaningful roles in the store. Retail leaders should assess frontline employees’ most mundane activities and look for ways to simplify them, which can improve productivity and help make the job more attractive.
- Invest to build strong managers and a development culture. Managers are not satisfied—they are inclined to leave their frontline retail jobs at a 75 percent higher rate than nonmanagers. Yet managers are the foundation for any improvement in frontline retail attrition. Factors in managers’ control, such as inspiring leadership and career development, matter a lot to nonmanagers. Managers can offer on-the-ground perspective to help retailers design a new employee experience. Retailers also need to rely on managers to lead the execution of any new employee strategy. Clearly, the importance of investing in the manager role cannot be overstated; it will have a cascading impact on the rest of the organization.
We expect competition for frontline retail talent to remain intense, which will spur a wave of innovations in employee experience. The best retail employers will create a new competitive advantage: a highly engaged frontline workforce that significantly improves customer experience and financial performance. More than 30 million retail workers stand ready to benefit from it.