No matter what products they sell, many businesses in the retail industry know that success depends heavily on the frontline workers they hire to staff their stores. Typically the lowest paid employees in an organization, they play an inversely important role in driving sales and customer satisfaction.
The problem is the high turnover rate for entry level jobs, which can range from 30 to 60%. Not only does this impact the company’s bottom line, it can be demoralizing for other employees to view their company as a revolving door through which employees rapidly enter and leave.
This is an issue that extends well beyond the retail industry. In fact, if you gathered all of your frontline workers in one room, research outlined in a Harvard Business Review (HBR) article suggests that nearly half are planning to leave their jobs in a year, and less than one quarter are highly satisfied with their jobs.
To help understand what factors affect high turnover rates and how companies can address this costly issue, consulting firm FSG and Hart Research Associates surveyed 1,200 entry level workers in numerous industries, including retail and healthcare, and spoke with a dozen companies that have improved retention rates of frontline workers.
The HBR article outlined key areas that increased frontline worker dissatisfaction:
1. Unfair treatment by managers or supervisors
2. No clear career path within the company and no support for continuing education
3. No benefits, such as health insurance or paid time off
4. Not making enough money combined with a
5. Lack of schedule flexibility, and few or no opportunities to work more hours
In addition, FSG and Hart Research Associates found disparities for the frontline worker based on race and gender. Women and minorities were more likely to have negative experiences with their managers and saw fewer opportunities for career growth.
So how do organizations address the situation? By thinking like retailers like Trader Joe’s and the Gap, companies employing strategies designed to not only boost retention but also increase employee engagement and create a talent pipeline.
“It’s simple, really. We believe that doing the right thing, as it relates to all Trader Joe’s stakeholders—Crew, Customers, Vendors—is the right thing to do. And it starts with our Crew.”
Trader Joe’s combines several strategies to retain employees, including higher hourly wages and a hire from within policy in stores, but it perhaps is most effective in communicating that information directly to potential employees in the Career section of its website.
The main page outlines key benefits, including health insurance and the monthly cost. It also emphasizes the opportunity for growth by highlighting the fact that nearly 80% of supervisors are promoted from within and 100% of its store managers are promoted from supervisory roles. On the page to search for opportunities by state, the hourly pay range for each store employee opening is listed for each location.
From their first introduction to the company, job applicants can easily see what the company has to offer them and the potential for moving up in the company. The outcome? A turnover rate that’s below 15%.
At Mercy, the country’s fifth-largest Catholic healthcare system, frontline healthcare employee development is at the core of business strategy. To reach its goals, Mercy operates a Lowest Paid Worker Committee to bring together senior leaders to develop and implement strategies to improve wages and opportunity for frontline workers. Lynn Britton, Mercy’s President and CEO, leads the Lowest Paid Worker Committee.
“We invest in the development of frontline workers to help them realize their talents and to support their professional and financial advancement.” – Lynn Britton
Mercy tracks and reports participation in their employee advancement programs yearly, monitoring scholarship programs, tuition advance programs, Catalyst Learning Company’s School at Work® (SAW) program graduations, and transportation programs. Mercy measures business impact, citing that 32.5% of School at Work® graduates have advanced into new roles and 9% have enrolled in higher education.
The Gap is another leader in entry-level worker retention. Gap Inc. has focused its efforts on programs such as Personal Advancement & Career Enhancement (P.A.C.E.) to help women in the global apparel industry. P.A.C.E. helps women develop life skills through technical training and support. In addition, the company’s “This Way Ahead” initiative provides on-the-job training and life skills development for young people in low-income areas, which benefits the communities in general and helps the company maintain a talent pipeline.
In January of 2019, for the second year in a row, Gap Inc. was included in the Bloomberg Gender-Equality Index and recognized as a company with a commitment “to transparency in gender reporting and advancing women’s equality.”
Healthcare organizations with similar strategies can achieve the same success in employee engagement and retention. In an article highlighting the top-rated hospital workplaces, job site Indeed.com included employee quotes explaining why their hospital was included on the list. The article noted that “room for professional growth, supportive management and positive attitudes among coworkers” were some of the common themes found in employee feedback. Number one ranked Massachusetts General Hospital was mentioned for all three.
In addition to increasing the hourly rates your organization offers, you can translate successful retail strategies for frontline employees into your organization in four ways:
1. Train supervisors with the soft skills needed to manage frontline employees
2. Offer learning opportunities to help frontline employees develop the skills they need to succeed in their current position
3. Provide career pathways to those entry-level employees who aspire to excel
4. Recognize employees for their good work throughout the year and not just during an annual performance review.
The bottom line is that frontline employees not only want to be paid well for the work they do, they want to be treated fairly and know that there are possibilities for their personal and professional growth. And it doesn’t matter what industry they’re working in.
Following the lead of retail companies can help your healthcare organization hire and retain employees that are engaged with your company, and understand the importance of the work they do regardless of position or pay. In the healthcare setting, every employee plays an important part in patient satisfaction, whether it’s the doctor providing the direct care or the person serving meals in the cafeteria.