“The magic formula that successful businesses have discovered is to treat customers like guests and employees like people.” – Tom Peters

  • 37 per cent – average staff turnover percentage in the Australian retail industry
  • 26.2 per cent – average store manager turnover in the Australian retail industry

(Source: John Caldwells blog www.itsallaboutretail.com )

Perhaps we could name this blog more aptly to be, “Why retail training can be considered for many retailers to be a tragic waste of money”. Or, alternatively perhaps we might call this blog,  “The greatest waste of money in retail”.

Interesting isn’t it, that we can all recite our rental occupancy, cost of goods sold (or gross margin), and in many cases our sales to target, and so on, and yet the mysterious staff turnover number remains a mystery.

As it is the football finals time, perhaps a small anecdote to share with you is to recall a very prominent and well regarded football coach, who explained to his conference audience that the secret to winning grand finals was not the myth of always making changes to the team, but rather the exact opposite.

His proven mantra was to keep the core team of technically proficient team members (they must be individually capable and show great promise ) together with a high focus on individual coaching.

Each team member had an individual coaching plan and made agreements with his/her captain and coach to achieve greater goals each match.

Coaching, stability, and consistency (as distinct from managing) is the great cornerstone of a profitable, positive culture and interestingly doesn’t rate too many mentions in the publicly listed retailer reports or the commentary of many retail board meetings.

To understand this further and a little curious about these high percentage staff turnovers, I spoke with a very successful CEO client of ours, whose manager and staff turnover is below 15 per cent and 20 per cent respectively.

His response to this question was outlined as:

  • Culture of family ( you join a way of business)
  • Consistency of results – closely measured
  • Career options available
  • Contribution to team results achieved
  • Coaching discipline (minimum 10 minutes per staff member per week).

Take a retail business with a turnover of $2million plus and you can see that the recurring losses with a high quarterly turnover of management and staff could be as high as an additional 10 per cent.

Multiply this by an average of say two cycles of staff and management loss and suddenly we see a direct and indirect cost of between $100,000 and $400,000 to that business in any given year associated with this loss.

That is a much higher degree of sales to cover this leakage.

Keeping that team on the field is every bit as important as keeping the team together.

First published on Inside Retail September 2014