Photo: Getty Images / Tim Boyle
Why are more retail workers quitting their jobs?
The number of people quitting their jobs throughout the U.S. seems to be dropping off, outside of a few specific industries. One of those is retail, where The Great Resignation appears to be picking back up after a dip.
The rate of retail workers quitting their jobs has been ticking up month-over-month recently and hit 4.1 percent in January, a higher rate of attrition than the pre-pandemic high, according to Business Insider. The last time retail’s quitting rate veered into that territory was in April of last year. The rate of quitting outside of retail, conversely, has dropped and is approaching 2.3 percent, the 2019 level.
The other business segment where quitting remains high is restaurants/hospitality, although that sector has seen a steady rate of employees quitting compared to retail’s decline followed by a rise. Retail’s quitting problem is also unique given that some retailers have, over the last few years, undertaken well-publicized initiatives to boost pay.
The news comes as the Labor Department’s impending jobs report is anticipated to show unemployment remaining at a nearly 54-year low of 3.4 percent, according to Reuters.
The main factors behind The Great Resignation, which began in 2021, have been a matter of debate since the phenomenon was first observed. Some have chalked it up to a spate of early retirements induced by the novel coronavirus pandemic. Some argued that low-wage workers were moving into new, higher-paying positions because of a strong labor market rather than dropping out of the workforce entirely. Others still ascribed it to burnout and anxiety, or from reevaluating their priorities in light of the stress caused by the pandemic.
By the end of 2022, factors like burnout, anxiety and the need for financial security did not seem to be abating for employees across the board. At that time, a survey by isolved found that employees were entertaining the idea of quitting their jobs at the same rate in 2023 as they had during previous pandemic years.
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Retail worker quits are on the rise again even as workers in other industries increasingly try to hold onto their jobs – Business Insider
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US job openings stay elevated as labor market remains tight – Reuters
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Is The Great Resignation really about quitting the rat race? –RetailWire
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Study sees The Great Resignation heating up in 2023 – RetailWire
Discussion Questions
DISCUSSION QUESTIONS: Why do you think retail has seen an increase in workers quitting? What needs to be done to reverse the trend?
Poll
Loading …BrainTrust
Lisa Goller
B2B Content Strategist
Dion Kenney
COO, Mondofora
The real answer requires serious research. Numerous factors appear to be affecting The Great Resignation, among them: pay rate, job satisfaction, impatient customers (I believe that we have become more impatient as a country), and insufficient perquisites. The puzzling questions are: Are those who are quitting not starting at another job? If inflation has taking a percentage of disposable income from most Americans, how can these workers afford to live without a job?
It is probably less about quitting the rat race than about retail jobs not paying enough to pay the bills.
Many retail workers are quitting as they feel underpaid, undervalued and burned out. They’re also seizing new opportunities created by market upheaval.
To reverse the trend, retailers can emulate best-in-class employee experiences like those at Target, Trader Joe’s and H-E-B. Competitive wages and benefits, career paths and a warm team culture improve employee satisfaction and retention.
Low wage, front-line work, crummy hours — that describes a lot of retail jobs today. With a booming job market, many retail jobs just aren’t competitive and, to no one’s surprise, workers are voting with their feet.
It’s important to look at the retailers who aren’t experiencing this issue — Costco, Trader Joe’s and Target for example. Even Walmart has done more to support their teams and the results are showing. Employees who feel valued tend to stick around. Employees who feel disposable or exploited, honestly, they’re always looking. And now they have options, and they’re taking advantage of the favorable market.
The wrong approach to this for a retailer is to complain about lazy workers or make up excuses about why retail can’t find employees. It’s not retail in most cases, it’s them.
I wonder how many employees who start a new job in retail or hospitality are already looking for the next, better gig?
Training and development budgets were slashed and not prioritized in the last year. People who feel prepared for the challenges of retail enjoy it. This idea that it is so awful is perennial. Plenty of people enjoy working retail, but more and more are left alone on the floor with one person instead of 4+ coverage. That increases stress, makes them perform poorly, and generally leads them to seek ways to feel better about themselves. Fix that, and you have loyal employees. Miss that, and you’ll search for more automation, making customers feel as bad as your former employees.
“Full employment” is not a ZERO unemployment rate. It is about 5 percent. In January, it was 3.4 percent. In January, job openings dropped by 400,000 but remained at over 10 million. Let’s not get into the psychology of the phenomena. Throughout the economy, workers are moving to upgrade their lives. Unsurprisingly, the industries that seem to have the least regard for their workers are seeing the most turmoil.
Even a good employer paying under $15/hour is faced with the competition of an employer paying $19/hour. In retail and hospitality, the employees are the herd and are considered such.
In the current vibrant economic conditions, there is not much these employers can do to stem the turnover. The objectives of the workers are contrary to that of the employer: the workers make a buck — the employer saves a buck.
The number of job opportunities may be contributing to a high level of employees leaving in the retail and restaurant/hospitality industries. Both of the industry groups traditionally hire a large number of employees at minimum wage and accept high turnover rates. Changing that approach is expensive with some combination of the following: paying higher wages, providing more training, providing more benefits, and providing a career path.
I stand by my comments about “The Great Resignation” and any other names that refer to people leaving their jobs. They aren’t quitting work. They are changing jobs because of better opportunities. Some of those are moves to other companies that offer better compensation, perks, etc. The company that takes care of its employees, keeps them. Just look at Target as an example. In short, this is more of a “Great Shift” than a “Great Resignation.”
The data suggests you are absolutely correct. This is a “Great Shift.”
I’ve always winced at the Great Resignation. Shift is so much better. Anyone I’ve ever seen make a move during this period has gone elsewhere for better culture or pay, not to completely quit working.
Retail frontline jobs are often miserable so people quit them regularly. That shouldn’t surprise any of us. Consider this: the frontline associate sees clearly what is going on. Yet silly demands are imposed on them from a distance and they are punished if they don’t meet those demands. Living constantly under threat of an NPS rating lower than nine out of 10 undoing all your own good work is the ultimate indignity.
Retailers need to pay attention. Most of the silliness imposed on the front line makes their business results worse — not better.
Because retail workers are — in many but obviously not all cases — abused. Retail isn’t the place to build a career or even earn a living wage and benefits are many times nonexistent to inadequate. Work conditions aren’t optimal and for many people it’s just a paycheck and the paychecks are higher in other industries including fast food. It would be interesting to compare the leaving rate at companies that are great to work for like Wegmans and Trader Joe’s with those at — well — other retailers.
Retail has never been an exciting career opportunity. Usually, it is a means to end. A combination of burnout, better paying jobs, etc. have created the current situation. It would be useful to compare the attrition numbers across different retail sectors, such as department stores, specialty clothing & accessories, hardware, gifts, grocery, etc. to see if there are any differentials and potential lessons learned.
Opus … where are you? Those with long memories and mirthful dispositions might recall the comic strip “Bloom County” and its periodic digs at media-manufactured “trends”. Ahem.
The pandemic’s effect on retail was far and away the greatest of any industry — except hospitality, which many would consider a part of retail — and we’re still being impacted by that event; IMHO it’s pointless to attempt to draw many conclusions until things are more settled. But when that glorious moment comes, retail will probably still have one of the higher turnover rates. Some of it is inherent — a lot of low skill-low wage entry level jobs — and some of it is self-reenforcing behavior (keeping those wages low when new models might be adopted). Should it be reversed, or changed? Some think so, but judging from the amount of inertia, they appear to be in the minority.
There are several factors that could be contributing to the increase in retail workers quitting. Few possible reasons already highlighted by Ryan Mathews, Shep Hyken, Gary Sankary and Gene Detroyer and many other experts are
1)Low wages: Retail jobs are often low-paying, which can make it difficult for workers to make ends meet
2)Lack of benefits: Retail jobs often do not come with benefits like health insurance or paid time off
3)Lack of job security & Growth: Retail jobs are often seen as precarious, with workers not knowing how many hours they will be able to work from week to week and there is no clear career development plan
4)Difficult working conditions: Retail workers often have to deal with difficult customers, long hours on their feet, and other challenging working conditions.
Retailers may need to take steps to address these issues to retain their workers and maintain a stable workforce.
Most retail workers have many employer options to choose from. All things being relative in wage and benefits, the rest comes down to culture, how people are being treated. If they are feeling pains from employers who cut and skimp, ignore team member contributions, or turn the screws in tough times, it’s not hard to see why they’d leave.
Others noted Costco, TJ’s, HEB for their leadership. Another is independent grocer Dorothy Lane Market in Dayton, Ohio, where team members are considered family, with all kinds of perks, recognition and small benefits. This results in longevity in tenure, friendliness and commitment to customers.
Most retail workers are not empowered in their positions and can easily tire of the job. Giving them commission incentives or let them profit from being an influencer for the company are great ways to get employees excited about the work again.
The last few years has changed how people view their jobs. Flexibility and adaptability have been skills that have been forced on us as a whole, but that has also led to negative implications, especially in the retail sector.
The last few years have been stressful, and very much so for retail. After going through the unpredictable shutdowns and reopening of stores, it is no surprise that an employee might not want to deal with the unnecessary stress or lack of stability seen in the retail industry. When you factor in the typical low wages, and lack of benefits, associated with retail, there’s definitely less holding that associate at a specific retailer when there are probably several other opportunities for that person to consider. Retail employers definitely have an opportunity to differentiate the employee experience to stand out as an attractive place to work.