Independent Retailers and the Great Resignation
We’ve heard it again and again: the COVID-19 pandemic has put things into perspective for Americans, and as they reevaluate what is important to them, they realize that their job is low on that list. Burnout, low pay, poor benefits, and a toxic workplace culture are things workers won’t put up with anymore. But the workers who join the ranks of the Great Resignation aren’t always leaving by choice, and few of them are leaving the workforce permanently. Some have no other childcare options, some have to care for sick family members and others may be suffering from the unpredictable long-term effects of a COVID infection or just can’t take the health risks associated with long hours indoors with strangers. Most workers, however, are simply resigning from their current job to accept a better job.
The Great Resignation is hitting different sectors of the economy unequally. White-collar workers, the ones most likely to be given generous remote work options, are not quitting. Frontline workers in food service, retail, education, and healthcare are the ones walking away, whether due to burnout, never-ending conflicts with customers over masks and vaccination requirements, or feeling overworked and underpaid at an understaffed location.
In the face of the Great Resignation, employers in the retail sector have learned a number of valuable lessons about retaining and attracting employees. These lessons can help you succeed during this unpredictable time.
Since 2000, the quit rate (percentage of workers quitting their jobs) never rose above 2.4%, hovering just around 2% for most of the past two decades, with the highest periods of resignation coinciding with economic stability. These are times when workers are confident about finding new jobs. But after the sharp spike in unemployment coinciding with the worst of the pandemic in the US, the quit rate rose as high as 3.4%, with 4.3 million workers turning in their notice in November 2021 alone. Accommodation and food services took the hardest hit, with almost 7% of workers in that sector quitting. Retail also saw above-average quit rates this past November.
In the face of this data, it’s easy to believe that people just don’t want to work. But since the Great Resignation is more of a Great Switch, with workers leaving jobs they don’t like for jobs they think they will get more out of, you have to consider the possibility that it’s not that people don’t want to work; it’s that they don’t want to work for you. Workers aren’t just leaving the workforce to sit at home, as hiring rates are actually outpacing quit rates. It’s true that some vulnerable workers quit their jobs and temporarily relied on pandemic stimulus and unemployment payments, but that money was never enough to live on.
The workers are out there looking for good jobs, so it’s important to look at what other retailers are doing to attract and retain employees in this landscape where employers have to compete for employees and not the other way around.
Lessons From the Retail Sector
In an effort to stop a resignation before it happens, many employers have taken to regularly checking in with employees, interviewing them formally or informally on their job satisfaction, their mental health and their stress levels, and asking them what sort of support they need. It’s often not the case that employees are just looking for more money. Their mental health and job satisfaction are also important factors.
Healthcare is important, as well. Now more than ever, many lower-wage workers have come to see healthcare coverage as being more important than salary. A job that offers the benefits they need might seem more attractive than a higher hourly wage without benefits.
In addition to reducing workplace stress and offering health insurance, another way to retain employees is to offer tuition reimbursement, training programs, and monetary bonuses. While tuition reimbursement seems like something only big corporations like Amazon and Apple can do, Internal Revenue Code Section 127 stipulates that an employer can deduct up to $5,250 per employee for tuition reimbursements made through an Education Assistance Program.
After facing pressure from their employees, McDonald's and Chipotle began offering “appreciation bonuses” to workers during the pandemic as a sort of hazard pay. Practices like these might be here to stay if retailers are to retain workers who get their heads turned by the prospect of better pay elsewhere.
Even with all of these programs and incentives in place to retain employees, employers might just have to accept a higher level of turnover than in the past, at least for as long as unemployment remains low. No matter what you offer, some employees will still find something better. The best thing to do, then, is to have a system in place to deal with it. You might encourage your employees to see their job as a stepping stone, where they gain valuable skills and experience that they can take into their next job. I don’t expect you to be with us forever, you might say, but what you learn here will help you in the future.
There is one less tangible benefit any retailer, large or small, can offer employees: a positive and uplifting environment. Workers who feel disrespected, exploited, or discriminated against will walk away from good pay and benefits to escape a toxic workplace. This doesn’t mean work will be all fun and games, without structure or periods of stress. It means having clear policies and procedures in place with transparent and consistent enforcement.
The most important takeaways are to listen to your employees, learn from successful competitors, and show gratitude to employees in a tangible way. The solutions listed above won’t work for every business and every employee, so it’s important to tailor your response to resignations to each individual’s needs.