Employee Turnover In The Retail Industry

3614 words - 15 pages

Employee Turnover in the Retail Industry

MANG 6476.601
Professor Matthew Dean
Fall 2009

Group 5

Table of Contents
Executive Summary i

Introduction 1

Problem Statement 1

The Nature of the Industry 2

Decision Process 3

Conclusion 5

Work Cited A

Executive Summary
Employee turnover is to be kept at a minimum in the retail industry. High turnover results in inconsistent procedures, variability among staff execution styles, and results in high employee costs for the company. In the retail industry, customers build a relationship with specific employees. The customer comes to expect a certain level of service from this specific ...view middle of the document...

The challenge is defining these standards and finding cost effective ways to achieve them.
Employee turnover has a great impact on retail companies. Cohen and Schwarts, authors of “A New Measure, report that retail store employees have on of the highest annual turnover rates at 30.3 out of 100. Further stated is that a company with low employee turnover is traditionally better suited to meet customer needs and allows for employees to build a long term relationship with customers. McCord, author of “The Impact of Basic Skills on Human Resource Management in the Retailing Industry”, performed a survey of retail firms which indicated that finding and retaining qualified employees was the greatest challenge facing human resource departments. A high employee turnover can hurt a company by loss of income due to continuous training of new hires, loss of customers due to inconsistent care ,and lack of teamwork with employees.
The relationships that customers build with employees can vary by store type, gender of both customer and employee, and location. For the purpose of this paper, the focus will be on women’s clothing retail in the mid to high end range.

Problem Statement
In the clothing retail industry, employees are the company representatives directly interacting with the customers. In many retail settings, customers build a relationship with those employees and come to expect a consistent level of service from that company. A high employee turnover can be damaging to the company because of an increase in training cost, decrease in productivity, and change in customer service. Even though the change may be for the better, customers may not stay with the store or “wait out” the training period.
Mid to high end retail outlets traditionally build their business by providing good customer service and developing relationships with the customers. A customer is more likely to return to a store where they made a connection with an employee. As the relationship develops, the customer may value the employee’s opinion on which items to choose that both fit well and keep up with the constant change in fashion. The customer may also come to depend on the employee to let them know when there are new items in the store, when sales are taking place and when special events at the store will occur. All of these needs require a long term relationship and employees that can be counted on the stay at a store. In some situations, it may require team work between employees to make sure all customers have personal service and that their needs are met. This ensures blanket coverage for communication of store events. It is to the benefit of the store to have a reputation of a sales team that is always courteous, helpful, and knows the customers.
When a new employee starts at a company, there is a great cost involved in the training of the employee. There is a learning curve that can include the cost of the training...

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