Some have labeled it "the worst problem in the retail industry". It may be a bit of hyperbole, but the costs of employee turnover are not to be discounted. One national study estimated the cost to find, hire, and train a single “minimum wage” employee to be approximately $3300, or 15% of annual salary. This does not even include the costs for onboarding, training, errors and lower productivity until the employee gets up to speed. Also the effect on other employees' productivity. When these are added in, some estimates range from $5-10,000. This still ignores the effect high employee churn can have on your customers' experiences. That, in and of itself, can ruin a business.

If you look at national data for two of the biggest sectors in the economy, the turnover rates are a staggering 70% for both retail and hospitality. One would suspect costs and turnover rates in Collier and Lee Counties might be even higher, given the tightness of the local job market. Most business people acknowledge that the #1 problem is finding workers to fill jobs, particularly at the lower end of the wage scale, given the high cost of living and the lack of good public transportation. All this points to the greater need to manage employee turnover.

Where to begin? Here are some tips:

  • Hire the right people in the first place. Look carefully at their work histories, check references, conduct thorough interviews using interviewers that know what they are doing. If you are unsure how to interview, there is a lot of good information on the Internet. It’s also a good idea to use a job application that has been developed by an attorney familiar with employment practices. The investment will pay dividends in the long run.

Also, be realistic in explaining the demands of the job. New hires will find out the truth soon enough. Better to be open about it upfront than having to invest more time and money on a poor fit.

  • Pay people fairly. Given the cost of turnover, paying the bare minimum will likely cost you more over time. As the saying goes “you get what you pay for.”
  • Devote the necessary time to onboarding and training. Doing it well will get them up the productivity curve faster, as well as lead to happier customers and co-workers.
  • Demonstrate respect at all times and treat people fairly and equitably. Also, be generous with your praise for a job well done. Recognition goes a long way.
  • Involve employees in decisions that affect them. Not only is this good practice, but with their input the decisions will often be better.
  • Try to staff adequately. It will decrease stress on employees, keep them fresh which means fewer mistakes and better customer relations, and provide more flexibility for the boss.

These are not all the answers, but following these practices will help you contain employee turnover, make your life easier, and also retain your customers.

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About the Author: Seymour Burchman is a Managing Director at Semler Brossy Consulting Group and can be reached at sburchman@semlerbrossy.com. Mr. Burchman is also a volunteer with the Naples Chapter of SCORE that offers free and confidential counseling to small businesses. To register, call 239-430-0081 or visit http://naples.score.org/mentors. A counselor will contact you within 48 hours. Please include your name, email address, and contact phone number.