Employee Turnover on Rise Among Hourly Workers

Most of the turnover is among store hourly workers, with employees working at distribution centers coming in second.

Employee turnover levels among hourly workers in the retail industry are starting to rise, according to a new study by global management consulting firm Hay Group.

The study noted a median turnover rate of 67 percent for part-time store employees, reflecting a 33 percent increase over 2011.

Among the 54 major retailers surveyed, those in the apparel and jewelry sector include Ascena Retail Group, Ross Stores, The Limited and Zale Corp.

According to the study, 82 percent of the respondents expect to see the most turnover among their store hourly workers, at least for the remainder of 2012. About one-third said they expect to see high levels of turnover among hourly employees at distribution centers.

Maryam Morse, national reward practice leader of Hay Group’s retail practice, said higher employee turnover is a double-edged sword. “On the one hand, it’s a harbinger of an improving economy, but on the other it’s a significant challenge for retailers who will need to devote more time and resources to retention and recruiting.”

The study noted that growth in the online channel is also fueling turnover rates as e-commerce firms building out their fulfilment and distribution centers are competing for the same talent.

In addition, more than half of retailers, or 53 percent, said the cost of turnover is about the same level as it was at the beginning of the recession in 2007, although 26 percent said the costs were starting to rise.