How to Build Retail Employee Loyalty

As the saying goes: “change is the only constant in life”. The retail sector is certainly familiar with change, and those who are not adapting to change are struggling. Yet, one area where retailers prefer consistency is their workforce. A stable workforce benefits a retailer in several ways including boosting the bottom line, improving morale, and increasing productivity. So, how can a retailer develop loyal employees?

A Growing Problem

Finding loyal retail employees is particularly challenging since this segment of the workforce has a reputation for changing employers regularly. The average turnover rate for part-time hourly store employees was 81% in 2018 – a 5% increase from 2017 – according to a Korn Ferry study. To put this into perspective, the predicted 2018 turnover rate of employees in the economy as a whole was 25% according to The Work Institute. The Work Institute report also found that “nearly 77 percent … of that turnover could be prevented by employers.” Retailers clearly have room to grow in terms of improving employee retention and creating loyal employees.

Loyalty Beyond The Paycheck

Some may think that simply raising salaries is the answer to fostering loyalty in employees. While everyone appreciates financial incentives, this approach can be a non-starter for small businesses who are limited in what they can reasonably afford to pay their employees. The good news is that there are ways to create loyal retail employees that don’t require competing with the scale of larger retailers. The answer for smaller retailers can come down to one word: culture. A survey by Deloitte found that “88% of employees believe a distinct workplace culture is important to business success.” The same survey found that “84% of employees rank having engaged and motivated employees as the top factor that substantially contributes to a company’s success.”

So, what can small retail business owners do to create a positive workplace culture? First, they must define the culture and then abide by it. A culture that is only noted in a manual, taped to a wall, or buried in an email — but not acted upon — is a turn off to employees and can actually have a negative effect.

Being More Inclusive

One element of a positive workplace culture is inclusiveness. An inclusive workplace culture means employees represent a wide range of human demographic differences. However, merely having diverse types of people as employees is a just the beginning.

An inclusive workplace culture means all employees feel respected and their differences are accepted and appreciated. Leaders can model this by speaking and behaving in a way that does not make assumptions. Further, leaders that are sensitive to all backgrounds, reach out to all employees, and create teams of employees from different backgrounds, demonstrate inclusiveness. Such a workplace culture will encourage employees to contribute and share ideas.

Having different types of employees with various responsibilities, and different levels of authority, sends a message that everyone is valued and has potential. Grocery retailer Publix Super Markets was once again on Fortune’s list of the 100 best workplaces for diversity. The retailer says “being diverse ourselves enables us to better serve a wider variety of customers… and we thrive as a business because of our diversity.”

Employees recognize that they have opportunities in an inclusive workplace culture. This serves as an inspiration to employees to remain at their job and become better workers. Doing so benefits both the employee and employer.

The average turnover rate for part-time hourly store employees was 81% in 2018 – a 5% increase from 2017

Offering Employee Discounts

Another strategy for retailers to increase employee retention is to offer product discounts. As mentioned earlier in this article, small business owners generally can’t compete on salary with their larger competitors. Giving employees discounts is generally easier and less complicated. Discounts offered to employees typically only affect product profit and don’t cost the employer any additional money. Employees recognize the discount as a job perk which they may regularly make use of. Overall, the discount creates good will, enhances the employee’s experience, and improves the workplace culture. Each of these positive benefits can boost employee retention.

An employee discount program can turn into a net positive beyond increasing employee retention. Consider companies who give their product away for free to encourage people to learn about the company and buy money making items. Similarly, employees who buy and appreciate their employers’ products or service can become spokespeople for the retailer. The employee can recommend the product to other people and inspire them to become customers. Also, strangers simply seeing the product in use can encourage onlookers to check out the retailer. Ultimately, employee discounts can also lead to increased sales.

Wellness as a Perk

Retail businesses can also improve workplace culture and inspire employee loyalty by having an employee wellness program. While these programs were once thought of as a corporate perk, they are becoming more prevalent. These programs can vary greatly, though the goal is to keep employees healthy and can act as a preventive measure against workplace accidents. Encouraging and creating a healthier work environment may come in the form of seminars, trainings, and health screenings. Employers may also pay for or subsidize healthy options, such as gym memberships. Retailers looking to help their employees needn’t look beyond on their own break room. A mainstay of many retail outlets, employees hang out in the break room during their breaks and having healthy foods available can help employees maintain a healthier diet while on the job.

Gallup adds that wellness programs should go beyond physical well-being. They suggest issues such as finding purpose in one’s work is also a critical factor in employee satisfaction and retention, saying, “Liking what you do each day and being motivated to achieve your goals” should be part of company’s wellness program. When a retail business has a wellness program that keeps purpose in mind, employees will find more contentment with their work which leads to increased loyalty.

In an environment where jobs are plentiful, retail employees have options. Small retail business owners can easily implement employee culture-focused strategies to increase retention and develop loyal employees.

Recap: Building Retail Employee Loyalty

  • ChecklistLoyalty Beyond The Paycheck
  • ChecklistBe More Inclusive
  • ChecklistOffer Employee Discounts
  • ChecklistWellness as a Perk