Does your company conduct exit interviews or surveys with departing store-level employees? I’m betting your quick answer is: Yes. Or: I think so. Or: We really try, when we can.
Do you DO anything with the information collected when you conduct exit interviews? If you’re not so sure about this one, you’re not alone.
Exit interview data seem to fall into a black hole at many retailers. The interviews, if they are even conducted, are typically not logged, tabulated, or reported. As a result, companies rarely gain useful insights from their exit surveys, leaving them unable to take meaningful action on this golden trail of information left behind by those walking out the door. Simply put: as an industry, we are not learning why people leave.
In the current retail environment, this observation is especially troubling. As store and restaurant concepts proliferate in our cities and suburbs, there is no shortage of options for retail employment. Part-time and supervisory employees, of every generation and demographic cohort, are being wooed by supercenters, grocery stores, casual dining concepts, and specialty stores. Adding to the challenge, according to recent research by the National Retail Federation, is the fact that our workers are increasingly coveted by other industries.
All of this makes minimizing turnover in key customer-facing retail jobs an even greater challenge. Holding onto our employees, the ones we selected, oriented and trained, is more critical than ever. Whether the unemployment rate in your market is 3% or 6%, at least in the service labor market we’re far removed from the economic downturn of a few years back.
So what are retailers doing to rise to this challenge? Not surprisingly, we’re throwing money at it. Every day we read about another company getting ahead of state and local minimum wage mandates. Walmart and McDonalds are the recent headliners, but retailers like Ikea and The Gap have long offered above-market entry pay. Others such as Starbucks are shoring up benefit packages to be more generous, whether for college tuition or health care.
These are positive developments. I’m all in favor of making retailing a more attractive place to begin a career, or to help finance a college degree, or to hold a full-time job that supports the family income. And to be fair, many retailers are addressing employee retention more comprehensively. Even Walmart, apart from its minimum wage hike, is reportedly taking associate-friendly steps such as relaxing dress codes and bringing back music in stores.
All of these efforts will presumably help arm us in the employee retention battle. But if we’re willing to take on significant additional wage expenses in the name of keeping our employees, wouldn’t it make sense to back up a step and ask those employees why they are leaving in the first place? Conduct exit interviews?
Let’s face it, when people decide to leave our organization, it’s much more natural to assume it has something to do with them than us. He wasn’t a good fit. She got more money elsewhere. A genuine conversation is not easy to have in that situation, and often we’re not truly receptive to the feedback if we even ask for it. But it’s critical to have those conversations. Just as smart retailers view customer complaints as genuine opportunities to improve their operation — to retain that shopper and others — so should we actively seek to understand what’s going on in the mind of an employee who is leaving. We should be leveraging that knowledge to make our company the destination for talented and passionate workers, not the source for someone else’s.
And besides, what if there’s more to the equation than the paycheck?
As it turns out, there is much more. Our firm is currently conducting a pilot exit survey with three regional grocery chains; two in the Midwest and one in the Northeast, ranging in size from 40 to 130 stores. We provide a comprehensive list of potential reasons for leaving, and the employees designate each as a major reason for their departure, or a minor reason, or an insignificant factor.
There are two significant reasons that play an even greater role in employee departures than their hourly pay. Of primary importance is the work schedule. Two-thirds of survey respondents cite this as a reason for leaving, with 39% rating it as a “major” reason. In so many cases, the number and allocation of hours provided/expected by the company do not fit with an employee’s needs, and he or she is forced (or at least enticed) to look elsewhere.
Another 39% say their supervisor, or management, is a major reason for leaving. An old saying appears to ring true: employees don’t quit a company; they quit a boss. Online employer rating sites and family dinner tables are filled with stories about incompetent managers. And while it typically takes two people to fuel an unhealthy relationship, we have seen more than enough evidence that poor supervision of front line retail employees can sour a store’s morale and send our most promising workers out the door.
The impact of supervision on the exit decision is confirmed by another part of the pilot survey, where we ask the departing employees to rate areas that need improvement at the company. Among the top three are “communication from management” and
“appreciation from managers.” Keeping our people informed and giving them recognition, even informally such as with a “thank you” (sadly, long shown to be rare according to our research on employee engagement) are management competencies we need to address with our entire management teams, especially those who supervise front-line personnel.
Of course, no one would argue that compensation is not a key element of the retail job equation. Our pilot survey shows that hourly pay is the third-most cited reason (69% total; 39% major) for leaving a company. So industry efforts to address the entry-level wage are both timely and important if we want to hold on to our employees and attract new ones.
But I would urge retailers to look at the picture more holistically and think about the other reasons why employees go elsewhere. Apart from the managerial items mentioned above, there are a number of areas that can be addressed, including opportunities for advancement, job training and work group dynamics.
As we all look to appeal to the millennial generation of workers, I would make one final point. When we asked the survey respondents where their employers needed to improve, the most-cited item was “employees feeling valued by the company.” This finding should open our eyes to the largest and most basic opportunity we have for attracting and retaining talented people: Our employees want to feel valued. We need to treat them in a way that demonstrates our loyalty if we are to expect theirs. If we think a somewhat-higher hourly rate is the only way to accomplish that, then other industries will be more than happy to welcome our best and brightest.
Written by Doug Madenberg, Principal, The Feedback Group