Employee retention is paramount in these challenging times. How your business can navigate the rising expenses and keep a reliable workforce.
A business’s most valued resource is its staff, especially in a competitive environment, like retail. For years, employees have always been a critical enabler for the retail supermarket industry.
How will they be impacted in the long term by COVID-19? While the workforce is essential to the business, they are also the most vulnerable to the virus, which puts additional considerations on retention and turnover.
According to the 2019 FMS Compensation Survey results, many retailers had already escalated pay and provided benefits, including bonuses to their dedicated staff.
The study finds that healthcare coverage is widely available at independent grocers. At six in 10 independent grocers, employees are eligible for health plan participation at 90 days or prior. The annual premiums continue to be paid mostly by the employer, with the employer contribution ranging from $4,531 for coverage of single employees to more than $9,000 for family coverage.
Single-store operators continue to be more likely to absorb a more significant share of the total health plan costs. Would these plans increase due to the unprecedented situation with the Covid-19?
These increases may become an on-going part of retailers’ expense structures. The pandemic further extended the need to offer front-line employees additional compensation, which needs to be a consideration in future benchmarking and budgeting.
There are only a few ways to navigate these types of rising expenses, and increasing margins is always a last resort. Increasing sales is the “no brainer” solution, but other alternatives are shrink reduction programs, improving productivity, and schedule effectively to reduce labor costs.
Before the outbreak, the tighter labor market elevated independent grocers’ concerns and spending on staffing, hiring, retention, and benefits.
As shown in the 2019 Independent Grocers Financial Survey, employee turnover at independent retailers increased to 18% among full-time employees and 47% among part-timers. This was further compounded by severe concern over increases in the minimum wage at the state and federal level.
This resulted in labor and benefits, reaching a study high of 16.7% of total sales among independents.
Tips for Employee Retention
Today, retailers’ primary focus is customer and employee safety but also keeping up with the demand. That being said, employee retention is paramount in these challenging times.
Some retailers have reported that employees are stepping up like they have extra adrenaline flowing as a front-line associate. This change in attitude often occurs when facing a weather event, it brings out the best in some people to be faced with a more significant cause.
However, some at-risk associates have chosen to take advantage of FMLA leave and unemployment compensation since, in some cases, it is not far below retail wages.
In response to the lack of personnel or reducing the risk of spreading the virus, some retailers may have chosen to temporarily close down high service departments such as Deli, Service Meat, and Seafood.
Training and development opportunities are critically important during these times, but ideally, they should have been in place before the pandemic. Nevertheless, it’s never too late to start developing your most valuable resource.