Understanding retail turnover rate
Measuring turnover helps you track how frequently employees leave your business. You can use this information to make decisions about pay rates, company culture, scheduling practices and employee support.
Definition and importance
The retail turnover rate is the percentage of employees who leave your business during a set period. To calculate it:
- Divide the number of employees who left by the average number of employees during that time.
- Multiply that number by 100.
Knowing your retention rate helps you understand how stable your workforce is. As inverse measures, a low retention rate and a high turnover rate may suggest problems with hiring, training or working conditions.
Average employee turnover rate in retail
According to a recent BLS report, the average turnover rate in retail is over 60% each year, which is higher than in most other industries. Many roles are part-time or seasonal, making many retail positions temporary.
Knowing the industry average helps you compare your own results and decide where to focus your efforts.
Key differences between turnover and retention rates
Employee turnover shows how many employees are leaving. Retention shows how many are staying. Looking at both can help you understand what’s working and what needs to change:
- Turnover tracks the number of employees who leave during a specific period—highlighting when staffing gaps may affect your business.
- Retention focuses on the number of employees who stay, showing how well your current practices support long-term employment.
Tracking both offers a complete view. For example, if turnover improves in one department but retention drops elsewhere, you may need to adjust strategies across teams.
Factors that contribute to high retail turnover
Retail jobs can be fast-paced and demanding. Many employees leave because their experiences do not match their expectations. Others leave because the work isn’t sustainable over time. Understanding these causes can help you make better staffing decisions.
Compensation considerations
Pay is a common reason retail employees explore other opportunities. While increasing wages isn’t always possible, creative incentives can show appreciation and encourage employees to stay with your company long-term.
Options include transportation support, store discounts, paid meals during long shifts or rewards tied to performance or attendance. These small gestures can increase satisfaction and reduce the likelihood of early departures.
Growth and development opportunities
Some employees leave when they don’t have a clear path forward. Offering structured development, such as mentoring, cross-training or growth plans, can help employees see a future with your company.
For example, assigning team leads or setting six-month performance goals can help employees feel supported and motivated to grow while introducing opportunities for advancement and professional development.
Work environment and scheduling issues
Inconsistent shifts and demanding schedules can lead to stress and disengagement. A positive work environment, paired with predictable scheduling, supports long-term retention.
Providing schedules in advance, rotating weekend shifts and allowing input on availability can reduce strain and make employees feel valued. A respectful, team-focused culture also plays a key role in daily satisfaction by improving morale and benefiting peer relationships.
The impact of high turnover on retail businesses
While turnover creates challenges, it also highlights areas where your business can improve. Addressing the causes helps you build stronger teams, improve customer service and reduce operating costs.
Increased recruitment and training costs
Replacing employees takes time and money. Hiring new workers, providing onboarding and training them take resources away from other business tasks. If you frequently replace staff, these costs add up quickly, totaling anywhere from 50-200% of the employee’s annual salary.
Improving retention means hiring less often, saving money by keeping employees who already know the job.
Customer service consistency
Experienced employees understand your products, customers and store operations. They can provide faster, more personalized service. Retaining skilled staff leads to smoother daily operations and a better experience for shoppers.
Operational stability
High turnover can lead to gaps in schedules and delayed tasks. Managers may need to work extra hours to cover shifts, and teams with fewer experienced workers may face challenges during busy periods.
Reducing turnover helps you maintain stable operations, supports long-term planning and contributes to better employee performance.
Strategies to reduce retail turnover
Improving retention starts with small changes to how you support and manage employees. Clear communication, fair policies, development opportunities and regular feedback can make a difference.
Offer competitive compensation
Employees may be more likely to stay if they feel their work is valued. One way to show this is through pay. If your wages are below those of other employers in your area, your staff may not stay long.
You don’t always need to raise hourly pay to remain competitive, however. You can also offer small benefits such as store discounts or flexible pay schedules. Some businesses provide end-of-year bonuses tied to attendance or sales performance. Other incentives, such as wellness programs or flexible work arrangements, can also help improve job satisfaction and retention, even when base pay remains consistent.
Provide flexible scheduling
Retail employees often leave jobs with unpredictable shifts, so offering team members more control over their schedules can improve satisfaction. Posting shifts at least two weeks in advance helps workers plan their time and feel more secure.
Allowing shift swaps or establishing regular availability can also reduce stress. Flexible options at work give employees a sense of control, potentially increasing loyalty.
Create development opportunities
Employees want to know they can grow, so offering clear next steps helps them recognize the value in staying. Next steps could include training programs, mentoring or opportunities to take on new tasks. Even offering cross-training in another department can help employees stay engaged and develop new skills. This supports skills-based hiring, helping employees refine skills that can transfer and be applicable within various positions.
Managers can also schedule regular development conversations. Short career-focused meetings can help employees feel valued and understand where they can grow in the coming months.
Build a clear and informative career site
A career site is usually the first place candidates learn about your business. When it reflects your values, it helps attract people who align with your mission and goals.
Clear messaging about what it’s like to work at your company can improve hiring outcomes and reduce early turnover. Consider listing shift structure, team support or training opportunities. Including team photos and a description of the work environment can also help candidates decide if the role is a good fit.
Use employee feedback
Asking employees for input shows that their opinions matter. You can use short surveys or stay interviews to learn how employees feel about their roles, and add anonymous comment boxes to break areas. Providing multiple ways to share feedback, including an anonymous option, can increase participation and may give you new ideas.
If you make changes based on feedback, let your team know to build trust and show that their input leads to action.
Enhancing retail employee engagement
Engaged employees are more likely to stay with your company. They perform better and contribute to a more positive store environment. Engagement starts with small efforts that make employees feel seen and supported.
Recognize employee contributions
Employees want to know their work matters. Regular recognition helps build morale—even just saying thank you or acknowledging a job well done during team meetings goes a long way.
You can also set up a simple program to highlight achievements. Monthly recognitions or peer-nominated awards can increase motivation and loyalty.
Promote open communication
Clear communication helps employees understand expectations and feel included. Regular updates about goals, schedules or store performance help build trust.
Encouraging team members to ask questions or give suggestions can also improve engagement. Managers should be available and open to feedback. They can model this behavior by holding open-door hours or following up on feedback.
Build a positive team culture
Employees may be more likely to stay when they feel connected to their team. You can encourage this by scheduling regular social events, such as monthly team lunches or Friday socials. Celebrating employee birthdays and cross-cultural holidays also helps create a welcoming, community-like environment.
Daily staff updates keep everyone informed and involved. Occasional team-building activities or off-site outings can further strengthen relationships and show that your business values its workers. Creating this type of environment can help your workplace stand out among competitors and encourage employees to stay long-term.
Leveraging technology to improve retention
Technology can support your retention goals by improving hiring, onboarding, communication and training. Many tools are designed to help you streamline employee support and reduce manual tasks.
Improve hiring processes
Using digital tools can make it easier to find candidates who match your store’s needs. Screening questions, retail skills assessments that focus on skills rather than credentials and automated interview scheduling can help you in this process and support skills-first hiring.
An efficient hiring process improves the candidate experience and reduces the risk of losing applicants to other employers.
Offer digital training
Online training platforms allow employees to learn at their own pace, which is especially helpful for part-time workers or those with varied schedules.
You can also use digital tools to track progress and assign additional training when needed to help team members stay informed and grow in their roles.
Use communication tools
Apps or software for scheduling and internal messaging help reduce confusion and missed shifts. When employees can easily access their schedules or message their managers from their personal devices, they may feel more in control.
Conducting effective exit interviews
Exit interviews are a valuable way to learn why employees leave. If conducted well, they can provide information that helps reduce turnover in the future.
Ask simple, clear questions
Keep questions focused on the employee’s experience. You might ask why they started looking for another job, what they liked about the role and what they think could be improved.
It’s important to create a space where the employee feels comfortable being honest. Let them know their feedback will be used to make improvements.
Identify patterns in responses
Collecting feedback isn’t enough on its own—you also need to analyze it. If multiple employees mention the same issue, it likely needs attention.
This information can help guide updates to your retail hiring, training or management processes.
Make improvements based on feedback
Exit interviews are most useful when they lead to action. If feedback reveals a scheduling issue, you might explore new shift planning tools. If employees report unclear expectations, better onboarding may help.
Sharing what changes you’ve made based on feedback shows remaining employees that their voices matter.
Measuring success: tracking improvements in turnover rates
After making changes, it’s important to measure whether your retention strategies are working. Tracking progress helps you stay on course and adjust when needed.
Set realistic goals
Turnover won’t disappear overnight, so set clear, measurable goals based on your current rate and industry benchmarks. For example, you might aim to reduce turnover by 5% within one year.
Be sure your goals are specific so you can accurately evaluate progress.
Monitor data regularly
Review your turnover rate on a regular schedule. Quarterly or monthly reviews can help you spot trends. If turnover increases during certain times of the year, such as around the winter holidays or in August when some employees leave for school, that may signal a need to review workload or scheduling practices.
You can also track related metrics, such as exit interview themes or employee satisfaction survey scores.
Adjust as needed
Retention strategies are not one-size-fits-all. If one approach isn’t working, review the feedback and make changes. Flexibility allows you to improve over time.
Regular check-ins with managers can also help identify early signs of disengagement before turnover increases.
How to retain employees in the retail sector
Turnover in retail is often high, but it can be managed. Simple strategies such as refined hiring processes, fair pay, consistent schedules, opportunities for growth and development and regular feedback can help employees stay longer and feel more supported. Tracking your turnover rate helps you measure success and make informed decisions.
Improving retention takes time, but small changes can make a big difference in how employees view their roles.
FAQs about the retail employee turnover rate
What is the typical timeline for retail turnover?
While departure periods may vary, tracking short-term exits helps identify problems in onboarding, training or scheduling. Addressing these areas early can reduce future turnover and improve employee retention.
Which retail positions experience the highest turnover?
Turnover may be higher in part-time roles because these positions often offer fewer hours and less stability. Many retailers also experience spikes in turnover right after the holiday season or when seasonal contracts for stockers, cashiers or stylists end. Tracking these patterns year over year can help you plan your hiring needs and better support employees through transitions.
How can small changes in scheduling reduce turnover?
Posting schedules early and offering consistent shift patterns helps employees plan ahead. Allowing shift swaps also supports flexibility. Simple actions can demonstrate that your business respects employee time, which can lead to greater satisfaction and lower turnover.
Why should you track both voluntary and involuntary turnover?
Voluntary turnover means employees choose to leave, while involuntary turnover means the business makes the decision. Tracking both helps you understand the reasons behind staff changes. Deeper insights can inform your retention strategies based on the results.
