This dissertation has been written to determine why the employee turnover in the retail industry is so high. The reason for this is that managers are not following the basic human resource principles such as offering employees competitive wages, opportunities of promotion or challenging work in order to keep employees motivated. As individuals are not motivated at work, they look elsewhere for better paid jobs where they can develop themselves further so they can progress with their careers. The researcher has also recognised that employees want flexibility at work. This is due to many of the participants of the survey having personal priorities that are more important to them such as children or studying while working. There are clear recommendations for employers stating what can be done with the intention of reducing the employee turnover rate. The most vital are that managers find out specifically why employees are leaving, this can be done by using exit interviews. Once this is determined, they will be able to pinpoint the causes for employees leaving them so that they can then make the necessary changes to keep staff attracted to the job. The study has also shown that it is of vast importance for employers to offer more flexibility in the workplace in order to be able to cater for the employees’ requirements.
The estimated basic turnover cost for a retail assistant is £1,425 per individual. (Taylor, S 2002:47) This total only includes the expenses of the employee leaving i.e. the paper work and the recruitment process to replace the individual. The total does not account for overtime being paid out to the individuals’ colleagues or temporary staffs who may be hired to fill the vacancy on a short-term basis. The employee turnover rate for people working in retail is considerably high at 31.3%; retail has the highest employee turnover rate throughout all sectors. (CBI Labour and Absence Survey 2004)
The researcher has been working in sales for almost four years now and it is of great interest to the individual as to why staff turnover is so high and what can be done to prevent it and how the company can benefit from retaining staffs. To the researcher, it seems more practical to retain staffs rather then recruit new employees. If employers invested money into staffs, they may find that this will save a lot of money in recruiting and training new staffs.
The aims of the dissertation are to:
- Identify the cause of high employee turnover rates within the retail sector
- Find out what employees in this sector want from an organisation
- Establish what can be done by employers to retain people in this particular segment of the labour market.
This dissertation seeks to inform businesses of how high employee turnover can be costly and time consuming which is why the well-known idiom can be used to express the basis of the dissertation: “prevention is better then cure.” In the business context, this relates to investing more in staff in order to retain them rather then recruiting, selecting and training new staff. High staff turnovers can influence a businesses performance as it is the employees who are in direct contact with the customers and if they are not satisfied with their jobs, they will not be providing the best service possible to the customers.
This dissertation is concerned with the retail sector as motivation and retention methods vary in different environments. The proposal does not focus on a particular company but on the retail segment as a whole in order to establish the factors, which account for retention within the sector. The study will be based in London; and will focus on individuals who have had experience of working within the retail sector.
Definition of Employee Turnover
When employees leave an organisation, several factors need to be considered which all lead to expenses on behalf of the organisation. The organisation will need somebody to cover the workload of the employee that has left the company and the process of recruiting will need to take place in order to fill the vacancy. The higher the employee turnover rate is of a business, the higher the costs will be to replace these workers which is why it is so important for businesses to calculate. To evaluate the labour turnover, the following calculation can be used:
(CIPD 2004) “Crude Wastage Method”
___Number of leavers in a set period_____ x100
Average number employed in the same period
Once labour turnover rates have been identified, it will then be possible for the organisation to recognise the extent that staff turnover can affect them by. Reducing labour turnover will mean that less people are leaving the organisation therefore; there will be less wastage of employees so that money can be saved, as less people will need to be recruited.
However, not all organisations calculate the cost of employee wastage. In fact, over 50% of organisations believe that this information is not relevant and 31% believe that it takes up too much time and is not worth the effort. (Recruitment, retention and turnover Survey, CIPD, 2004:33) If organisations do not calculate the employee turnover rate, it will be difficult for them to distinguish its affect and recognise the benefits of reducing it.
The Effect of Employee Turnover on Staff
When an individual leaves a job, either a temporary replacement is hired or the workload is split between the individuals’ colleagues until a suitable replacement is found. Hiring temporary staff can be expensive while at the same time, giving the individuals’ colleagues, an increased workload will cause them further stress. If this was to happen consistently, it could be another cause for people leaving the organisation. The graph shows how employee turnover can have a knock on effect because of the impact it has on staffs.
(Employee retention report, Reed, 2003:4)
The employer must ensure that people are replaced as soon as possible to prevent other staffs from being put under additional stress and pressure. However, if employers tried harder to retain staffs then they would have to put less time and resources into replacing the workforce.
The Effect of Employee Turnover on the Organisation
The impact of employees leaving organisations is that it leads to expenses. Replacing staffs takes up time and money, which are both valuable resources that should be saved wherever possible in order to achieve a more efficiently operated business. When a position is vacant, the amount of paid overtime can rise up to 25%, which accounts for the usual workload that is to be completed by less staffs.
(Employee retention report, Reed, 2003:4)
The graph shows the adverse affects that happen because of employee turnover. Reducing employee turnover will decrease expenses as the company will not have to spend as much money to hire temporary staffs, recruit new staffs or pay so for so much overtime.
The Importance of Retention from the Recruitment Stage
It is important in an organisation to recruit the right person with the right skills and qualifications for the job.
“People who represent the best ‘match’ in terms of their personality attributes, skills and experience are those who are likely to perform best in the job against a range of criteria. They are also the people who are most likely to remain employed for some time and the least likely to take the first available opportunity to leave.”
(Taylor, S 2002:171)
This is essential as recruiting a person whom is inadequate to do the job would be pointless as they would not be able to complete the tasks of the job to meet the expectations of the company. Therefore, recruiting a person who is not right for the job would be a waste of time and money as the right person for the job will still need to be found for the long-term.
The Importance of Inductions
Once a suitable candidate is found and hired, they will require preliminary training, which is known as an induction. This is where the employee is introduced to the company, its culture and procedures. This will help to familiarise the employee with the company and the job requirements. As a result, the employees will learn the various procedures of how the company wants to operate.
Inductions are used to welcome the new employee into the organisation and ensure that they feel comfortable in performing their job role successfully.
“Labour turnover is frequently highest amongst those who have recently joined an organisation. The term ‘induction crisis’ is used to describe the critical period when new starters are most likely to leave. A well planned induction course can help to decrease labour turnover by ensuring that new starters settle quickly in their jobs and reach an efficient standard of performance as soon as possible.”
(Kenney, J and Reid, M 1990:241)
The induction is a very significant part of training as if it is not carried out it can lead to the new employee feeling pressured and may lead to feeling that the job difficult to undertake. Poor or even no induction training can be the result of an employee leaving the company within the first few days or weeks of the start date.
Affects of a Quality Induction Programme
Clarks is a well-established shoemaker company that has developed a valuable induction programme to ensure that its store employees are capable of achieving the company’s targets. Just over 40% of the company’s retail staff has already taken part in the training scheme called Shine. The programme is significantly recognised as it won a UK National Training Award. The scheme is part of a strategic plan to improve performance, productivity and employee retention. New starters receive Shine on the first day off work as on-the-job training. The new trainees are given a workbook which is similar to an employee handbook as it covers safety, the job, pay, hours, rules, selling steps, finding stock and equipment knowledge of products, shoe-care, deliveries, credit cards, cheques and refunds. The programme encourages teamwork and helps the new employees to bond together. It is clear that Clarks has recognised the importance in induction training in order to retain employees which is why the company has devised such a satisfactory training scheme.
(“Shoe shop staffs shine! In training” 2004:91)
In order to retain employees, the company must first find out what is causing them to leave. As there can be a wide variety of reasons for people leaving a company, the plan is broken down into key factors:
- Pay and benefits: the company must be able to offer a competitive rate of pay. This is essential as if an employee can perform the same job and be paid more elsewhere then they will most probably leave the company. The company must be able to keep compete with the pay and benefits offered by rival companies. These benefits can consist of; share options, pension schemes, retention bonuses and flexible benefit
- Recruitment and selection: when recruiting employees it is crucial to ensure that the employee’s skills and abilities match what is required of the post in the company. If this is not done then the employee will have problems in carrying out the job role successfully. It is also vital to produce a truthful image of the job as if it is made to sound more glamorous or exciting then it actually is, the employees expectations will not be met therefore they will not be fulfilled in the new job thus causing them to look for a better job elsewhere.
- Training and development: a good induction process is imperative. Employees also need to have the chance to progress through promotion so that they will not feel like they have to be trapped in the same job.
- Job design: the work may be too boring or undemanding therefore the position may need redesigning or a new approach such as teamwork. This makes it easier for job-share therefore employees will be able to work when it suits them better as the job will be flexible.
- Management: ensure that managers and supervisors have the skills and ability to manage effectively and fairly.
(Bevan, S. 1997)
These are the key features, which the organisation has the control to change. The company has no control over circumstances such as people wanting to move to a different location or ill health therefore these factors cannot be influenced in order to retain employees.
With the intention of retaining employees, keeping individuals motivated is another way to prevent them from leaving the organisation and to ensure that the employer is getting the best from each individual.
“Boredom and frustration at work is often the result of an employee’s lack of involvement with the company’s goals and feelings that their ideas are not wanted or listened to. Companies that involve their employees in achieving company goals are able to motivate employees.”
(Chapman, M 1997)
For individuals to fulfil their full potential this must be motivated thus The harder an employee works, the more / bigger reward(s) they should gain which will keep them motivated to continue working hard. Motivated staffs lead to a more productive workplace therefore; it will be more profitable.
(Maslow’s Hierarchy 1954) states that people first needed to fulfil there basic needs before they can progress to achieve self-actualisation. This is best shown in a pyramid, each person first starts from the bottom and through work, the individual fulfil each stage and works his or her way up.
(Maslow’s Hierarchy of Needs 1954)
- Physiological needs: food, water, air, rest
- Safety needs: security, job security
- Social needs: affection, love and friendship
- Esteem: recognition, achievement and status
- Self-actualisation: personal growth and self-fulfilment.
The hierarchy of needs shows that:
- Employees need money to pay for necessities such as food, rent etc. This is the basis of satisfaction
- Employees need to know that their job is safe so that they do not have to worry about looking for a new job.
- It is best to work in teams to encourage socialising between employees as individuals can learn from one another and share knowledge.
- Employees will be motivated to work harder if they know there is a possibility of promotion.
- This is the hardest to achieve, as most people want to be the boss. This will take a lot of time and very hard work to achieve.
Maslow’s theory explains how individuals have needs and by employers meeting these needs, they are able to motivate them to keep on progressing. It is vital for the needs of individuals to be met as if they are not it will lead to individuals feeling unfulfilled thus leading them to look elsewhere for another job.
(Herzberg’s Two Factor Theory 1968) This consists of satisfiers and hygiene factors. A satisfier is what motivates an employee, e.g. achievement, recognition, responsibility, advancement, personal growth and the actual work itself. Hygiene factors are elements that do not motivate people e.g. pay and conditions, status in the organisation, job security and benefits. The theory expresses that employees will be motivated by good wages, promotion and other benefits etc. Employees are not motivated by poor wages, poor working conditions, no job security etc. Ultimately, employers need to offer staff satisfiers to motivate them to work hard. As long as individuals are happy and fulfilled in their jobs and feel that they are progressing, they will continue to work hard and stay within the organisation.
How to find out why Employees are Leaving
The organisation needs to find out why its staffs are leaving so they can then devise a plan to try to prevent this from reoccurring in the future. The methods of finding out why employees are leaving can consist of:
- Exit interviews: these interviews are normally held soon after the employee has resigned. The interviewer can take the opportunity to find out why the employee is leaving, the conditions under which they would have stayed and improvements the company can make in the future.
- Leaver questionnaires: these are either completed during the interview or sent to people once they have left the company and normally consist of closed questions to make it easier to analyse. (Leavers questionnaire are also known as Attitude Surveys)
“The exit interview is an increasingly common procedure when an employee leaves an organisation. Ostensibly these are conducted to gain information about the reasons for the employee’s departure, information which can then be used to improve human resource management.”
(Furnham, A 2001)
Once the reasons for employees leaving has been established, they can be put into separate categories so the organisation can see what the most popular reasons are for people leaving. They can then go on to make relevant changes in order to help retain workers.
Conclusion of literature
Overall, it seems that in order for the retail industry to grow, organisations must improve their retention methods to ensure they have enough employees to cope with the increase in productivity. It is the sales assistants that have the majority of contact with customers which is why it is so vital to ensure that they receive sufficient training in order to serve customers effectively and efficiently while at the same time providing a service to encourage them to come back.
A key way to reduce employee turnover is to keep staffs motivated, so the industry will be investigated to find out how this is done and how successful current methods are. The employee turnover rate is so high within the industry so there must be something that is going wrong to cause such a high turnover rate.
Exit interviews seem to be the most crucial method of finding out why people are leaving the industry. It is vital to find out why people are leaving so that action can be taken to prevent staffs to from leaving for the same reasons in the future. Therefore, it will be important to find out if retail organisations carry out exit interviews; and if they do not, then why not?
There are varieties of methods that can be put into practice to assist the researcher to seek out relevant information in order to find out the answer to the research question. Examples of such methods are; observations, case studies, interviews, questionnaires and focus groups. If would be difficult to make observations to find out why people are leaving their retail jobs as people resigning can happen randomly so its not guaranteed to happen when the researcher has scheduled to make an observation. Case studies will not be used as the dissertation is based on the retail industry as a whole, not on specific shops or department stores. Interviews will not be used either as although they lead to a large amount of information being uncovered, they take up quite a lot of time of so the amount of people being interviewed will be limited. A broad selection of peoples opinions need to be taken into consideration therefore, the researcher has chosen to use focus groups and questionnaires in order to obtain both qualitative and quantitative information.
As the study is based on the whole retail industry, a wide variety of people who have worked or still work in retail need to be targeted to find out the main causes of employee turnover within the sector. The study will be based on primary research, which will be put into practise to find out peoples viewpoints of the topic.
It will be ideal to use questionnaires to find out information, as it seems to be the most efficient way to use a large sample so a wide amount of information can be collected. Another advantage of using questionnaires is that they are not very time-consuming therefore; more people are likely to respond to them. In addition, they are relatively cheap to produce so the researcher will not need to worry too much about the costs. The questionnaires will be anonymous so people will not feel obliged to answer in a specific manner; hence, they will be able to express their own opinions without feeling obligated. An additional feature of a questionnaire is that people can randomly be asked to fill one out as long as they have had a job in retail. This means that no appointments need to be arranged and that the survey can be conducted at any time or place.
However, there are some disadvantages with questionnaires such as the structure of the questionnaire needs to be simple and easy to understand so that people do not get confused. This could ruin the results of the questionnaire as if people misunderstand the questions or the layout they will not answer or complete it properly. If people have literacy problems, it may make it difficult for them to complete the survey accurately. Some people may leave out some of the questions, which could cause a problem when recording the data. This could also lead to the wrong conclusions being drawn to as if people skip questions the results will differ. Consequently, this will need to be taken into consideration when recording the results of the survey. Another possible problem is that the response rate is not guaranteed to be one hundred per cent so some questionnaires maybe wasted. The questionnaire will need to be short and straight to the point, if there are too many long questions it may discourage people from completing it as they may feel that it will take up too much of their time. One more problem with questionnaires is that they are limited so people will only be able to give feedback on what they have been asked so a different perspective may be overlooked.
With the intention of preventing any issues being overlooked, two focus groups will be instigated before the questionnaires are created. This will be done with the intention to stimulate the topic and look at it from a variety of angles. The focus groups will allow for the upward and downwards approach to be put into use, as the information gathered from the focus groups will then be used to develop the questionnaire. One focus group will be made up of university students whom have worked or still work in retail; therefore, the viewpoint of part-time retail workers whom have other commitments can be established. The other focus group will consist of full time retail workers so that their perception of the issues raised can be distinguished. These group members may have responsibilities such as children, another job, a mortgage etc that is why the researcher feels it is relevant to use two focus groups. Each focus group will have between four to six group members. The focus group will be started by introducing everybody to each other, followed by a summary of the topic. A Dictaphone will be used to record the discussion so that all the information can be recorded so that nothing is left out. The following questions have been prepared to ensure that the discussion is kept on track;
Q1) Where does everybody work? / Where has everybody worked?
Q2) How long have you all been at these jobs?
Q3) Do/did you enjoy it?
Q4) What do you like best about it?
Q5) What do you hate about it?
Q6) Do you feel that your organisation seems to constantly be recruiting new people?
Q7) Do you feel that this affects you? i.e. do you have to help train them? Are you often left with a bigger workload? How does this make you feel?
Q8) When you have left a job did u receive and exit interview?
Q9) Do you think this procedure would help the organisation to find out why they are loosing staffs?
Q10) If you were the manager, what would you do to retain staffs?
A copy of the minutes of the meeting is available in appendix A.
The problems associated with focus groups are that some of the members may feel uncomfortable, as they do not know each other so they may keep their opinions to themselves. However, the researcher will introduce all the members to each other and start the conversation off in a relaxed way to help everyone feel more at ease. Another problem is that it may be difficult to get all the members together at the same time as some people maybe working or have other responsibilities like studying or children.
When the focus groups have been carried out, the information will be used as the foundation for the first draft questionnaire. This will then be tested in order to get feedback on it for improvements. This process will continue until all feedback has been taken into account and all the necessary changes have been made. When this is all completed, the questionnaire will go through a pilot study of about ten people to ensure that all the questions run smoothly and are not misunderstood. The final version of the questionnaire is available in appendix B.
After the required changes if any have been edited, the survey will be carried out at Charing Cross train station on a sample of one hundred people whom work or have worked in retail as a sales assistant. The people completing the survey must meet the specific criteria, which are that everybody who takes part must work or have worked in retail. The location was chosen as it is very busy and it should be easy to find a variety of people that meet the criteria that could spare five to ten minutes to fill out the questionnaire while waiting for their train.
Analysis of Data
Once the survey has been carried out, the data gathered would be entered into an Excel spreadsheet where the data will be put together to analyse it and to find out what are the main reasons for employee turnover within the industry and what can be done by employers to reduce the amount of employee wastage. The data will then be evaluated in order to identify if there are any trends or relationships that can be established. This information will then be examined to find out what the industry’s employees require so that employee turnover can be reduced.
It was too difficult to get a group of full time workers from different retail segments together at the same time to hold the second focus group. Some people refused to be part of it and others who said they would participate were not able to agree to a specific time where they would all be free. Therefore, only one focus group of university students could be conducted.
The survey will be carried out on one hundred people whom have worked in the retail industry. In addition, the survey will be based in central London, if the survey was carried out around the whole of England, the results could differ.
The dissertation focuses on primary research carried out by the researcher however, secondary data in the form of academic books, reports, articles and CIPD studies have been used to look at the existing trends in the labour market. Information has been gathered from various human resource textbooks to look at employees’ behaviours more closely and to define what factors motivate individuals within the working environment. The Internet was used to find out reliable facts and statistics about the retail industry in order to examine it closer and determine what has already been established so the researcher could identify if these trends were also shown in their research.
Analysis and Findings
From the information found out through the focus group, the researcher decided to use open-ended questions in the questionnaire as a means to find out what people really thought. People’s opinions have then been categorised so that relationships can be identified more easily. One hundred questionnaires were handed out and fifty-four were handed back fully completed thus the response rate for the survey is 54%.
The results from the survey show that out of the fifty-four respondents, only 22% were male.
In 2003, the retail workforce was made up of 63% females and only 37% males. (Learning and skills, research report, 2004:8) According to the survey, just over a third of the industry was made up of men meaning that women dominated the workforce. These results are not biased, as the researchers sample resembles the trends in the industry, as just over three-quarters of the sample are female. Therefore, although the gender is not evenly split, it will not affect the findings of the survey.
The results of the survey also showed that the majority (fifty per cent) of the sample fell between the twenty-one to thirty age-range. However, the sample did consist of a variety of ages as shown in the graph below:
This graph clearly shows that women dominate the sample and that no men over the age of forty-one took part in the survey. In fact, only seven per cent of the sample are over the age of forty-one. The under twenty category is the only age range which shows there is an even gender split; nine per cent are male and eleven per cent are female. Overall, the survey was completed by respondents with a variety of ages to ensure that different generations of workers could give their viewpoints on employee turnover within the sector.
The majority of participants have no children under the age of fourteen:
only seventeen per cent have children; forty-four per cent are male and fifty-six per cent are female. Out of these candidates, fifty-six per cent are married, twenty-two per cent are single and twenty-two per cent are divorced. Forty-four per cent have left the industry due to having children while twenty-two per cent are working full time and thirty-four per cent are working part-time. The thirty-four per cent that are working part-time consist of the individual that are single or divorced. These candidates have to work part-time as they are single parents and they have their children to care for.
The length of time people have worked in the industry and the amount of different retail jobs they have experienced
Almost a third of the participants have worked in retail for between three to five years and only four per cent of participants have worked in the industry for ten years or more. This is a very small amount considering that the most amounts of jobs undertaken in retail by a participant were twelve. This was by only one person who worked in the industry for between five to seven years. Seventy-six per cent of respondents have had between one to four retail jobs which seems to be fairly high considering the fact that over a quarter have worked in retail for a year or less.
Out of the whole sample of respondents, only eighteen per cent are still in the retail industry, which means that just over two thirds of the sample have actually left the sector and changed careers.
The reasons for employee turnover
Seven per cent of the survey is still in their first retail job, of which, eighty-five per cent have only been in the first job for one year or less. These candidates are all under twenty, therefore the reason they may still be in their first retail job is that they are so young and are just coming to terms with working life. The research has shown that older candidates are likely to have had more jobs in retail as they have had a longer career in the sector.
The chart shows that sixteen per cent of the candidates left their retail job in order to change their career path and leave the retail industry. As shown in the pie chart, the most popular reasons for leaving consists of a better job offer, change of career, pay, no prospects/promotions, the hours and poor management. In total, this reasons account for seventy-two per cent of the sample.
The results also showed that the seven per cent of candidates who worked in a department stores left because they felt that there was no way for them to progress any further. This is very significant as if all people who work in department stores felt like this, it could mean that the employee turnover rate in a department store is considerably high compared to retail stores.
As ten per cent of the sample left their jobs because they found better ones, it shows that competition for staff in retail is quite fierce and that employers need to do more to make jobs more appealing in order to be able to keep current staffs interested as well as being able to attract new staffs. The rates of pay in the industry seem to have affected employee turnover as twelve per cent of the sample have left jobs due to the poor wage; this is another area that managers need to improve on to try to reduce employee turnover.
Where the respondents are working now and what are the reasons for part-time workers only working part-time?
Only thirty-three per cent of the original sample are still working within retail, this is just a third of the sample which means that two thirds no longer work in retail. The third of respondents (this consists of eighteen of the candidates) that still work in retail are shown in the chart below:
The most common job is working in fashion, which accounts for over a quarter of the sample followed by a fifth of the respondents working in department stores. Overall, the chart shows that the respondents came from different working backgrounds, which is important in order to find out what people like and dislike about their jobs so that something can be done to try to prevent employees from leaving. Out of these candidates, only a third were working full time and the other two thirds had to work part-time as they had other responsibilities, which meant they were not able to work full-time. The candidates that are still working in retail are made up of a third of men and two thirds of women. The graph below shows the amount of men and women that work full-time or part-time:
The chart shows that over a quarter of the men are actually working part-time. When looking at the data more closely, it was recognised by the researcher that forty per cent of these men were working part-time in retail, as this was their second job. One male was working full-time in retail compared to five females. The figures in both of the genders are quite low showing that there is a trend whereby the majority of the sample, which accounts for sixty-seven per cent are working in retail part-time. The trend seems to be happening because people have other responsibilities, which seem to take a higher priority in their lives. These responsibilities are shown in the chart below:
As can be seen in the chart, all the candidates that worked part-time have done so because they have other priorities which means that they do not have the time to work full-time. Over one third of the participants are studying, thus showing that these participants are looking to further their careers and that the retail job is just a stepping stone for them to earn some money while they are studying. With seventeen per cent of the sample having other jobs, it shows that the retail job is there for the respondents to earn extra money although they already have there own full-time job. However, sixteen per cent of the sample is only able to work part-time as they have children or somebody to take care of. Overall, the data collected shows that the candidates have their own priorities that come before their retail job. This means they need to balance these prior commitments with their jobs allowing them to be able to do both things at the same time. This is why employees need to have flexibility at work. Employers need to understand that employees have other priorities and that the more support they can offer them, the easier it will be for the employee to balance their job and personal commitments. If employers do not offer support or flexibility, it will cause the employee stress and difficulties, which will cause them to leave the job, as their own commitments come first.
The participants' best feature of the job
The full-time and part-time workers data has been combined to show what they like best about their job:
The most common feature that people like about their job is the money; thirty-nine per cent of the participants appreciate the pay and/or bonuses that they receive from their job. Almost a quarter of the respondents enjoy the working environment, which contributes to job satisfaction in the working atmosphere. The result of the data has shown that people are happier when they are working in a good environment as oppose to individuals working in a tense atmosphere where the staffs cannot communicate and work together effectively. These features are what motivate the individuals to continue working and are the types of issues managers need to encourage to reduce employee turnover. It is important that these are focused on as it is for these reasons that people are in their currents jobs.
The participants' worst feature of the job
The data shows the aspects of the jobs that individuals dislike the most:A third of the respondents' feel that they are not being paid enough and a further seventeen per cent feel that it is unfair that they are kept back after work in order to tidy up the shop floor. This means that the workers rarely get to finish work on time, as they have to stay behind after work to ensure that the store is at a satisfactory standard according to the manager. The employees do not get paid for this extra work which is why they feel it is unfair, it is bad enough that they do not get to leave work on time but it is worse that they do not get paid to stay behind to tidy up.
The results also show that individuals need more flexibility at work, this is because all of the part-time workers have other responsibilities and commitments. There is a relationship between individuals worst feature of the job and what has caused others to leave the job. In the sample, twelve per cent of the candidates have left retail jobs because they were not satisfied with the pay. A further twelve per cent left because they were not happy with the hours and shifts that they had to work and four per cent left because they felt they were not being recognised or appreciated at work. These types of issues cause people to leave their job. For employers to reduce employee turnover they must take into consideration these factors and find out to what extent they affect their employees. By doing this it will be possible to identify, what individuals dislike about their job. Once this has been established, managers will have to implement a plan, which concentrates on preventing these factors from existing in the workplace.
The affects of exit interviews
When the participants resigned from their last retail job, eighty-six per cent of the sample had not received an exit interview, and seven per cent were still in their first retail job. Only seven per cent of candidates received an exit interview. With such a vast amount of people not receiving an exit interview, it explains why the employee turnover in the retail industry is so high: employers are not making use of existing practises to find out why people are leaving. If they do not find out why people are leaving, they will not be able to take the necessary measures to reduce employee turnover. All of the candidates felt that exit interviews should be used by organisations to find out why people are leaving the organisation.
What would the respondents change to reduce employee turnover if they were the manager?
The candidates have used the knowledge from their own experience to state what they would change if they could. It is vital for employers to pay attention to staff and listen to their opinions, as the staffs communicate more efficiently with one another on an informal level, so it is easier for them to see the real problems at hand. The employees work on the shop floor; therefore, they see what is going on and what can be done to change things for the better. The chart shows what the candidates would change:
The data collected shows that the candidates have felt so strongly about the worst feature of their jobs that they feel that others would also benefit if these factors were improved upon. The biggest issue seems to be the fact that candidates feel that the jobs in retail offer no promotion so there is anything that the individual can work towards achieving. This is an issue, which has affected a third of the participants. Once again, pay is still an issue with almost a fifth of the participants. The information shows that it is vital for employers to improve on these areas in order to reduce employee turnover.
From the analysis of the data, it has been recognised that the main causes of employee turnover consist of better job offers, poor wages, limited prospects, long hours and poor management. These factors can be related to basic theories of motivation such as Herzbergs' two-factor theory 1968 and Maslows' hierarcy of needs 1954. Both theorists believed that individuals need motivators such as good pay and opportunities for promotion in order to achieve satisfaction at work and to encourage them to work harder to develop themselves further. It seems that the retail industry does not try to satisfy even the most basic motivators, which is why the employee turnover rate is so high. If individuals are not motivated at work or feel that they are worthless, they will not be motivated to work hard or remain loyal to the company. Individuals need to be stimulated at work or they will get bored of the job and eventually look for work elsewhere that is more interesting.
The fact that exit interviews are almost non-existent in the industry also makes it difficult for managers to understand why their staffs are leaving them. If they do not know why staffs are leaving, then they will not be able to reduce or prevent this from happening. Both motivation theories and exit interviews have been used in the past in order to help reduce employee turnover. If managers want to cut costs and reduce staff wastage then it is vital that they pay attention to the resources that are available to them such as exit interviews. They maybe time consuming but the information that can be found out can be of vast importance for any business.
Only four per cent of the sample has worked in retail for ten years or more, this relates closely to the fact that many retail jobs offer only limited promotion prospects. Eleven per cent of the sample quit retail jobs because they felt that they were not able to progress any further in their job and thirteen per cent stated that they would try to offer more training and promotion opportunities if they were the manager. This is a classic example of a basic motivator that has not been implemented within the retail industry.
Two thirds of the sample work part-time due to having other responsibilities and commitments, which shows a trend that employees' need more flexibility in the work place. Fifteen per cent of the sample quit retail jobs because the shifts were too long or the job was not flexible enough for them. Employers must be able to offer flexibility in the work place, as they need to understand employees have other priorities such as children or they are still studying. The employees' needs in the industry are changing; they need more flexibility from the organisation in order to balance their personal life with their career. As many people have more important priorities, their jobs come second to them so if they flexibility from the organisation is very important to individuals. If employers do not offer flexibility, it will mean that the employees will look for work elsewhere as it is obvious that their job is not their life as they have commitments that are more important.
Eleven per cent of participants quit retail jobs because of the poor wages they were receiving. A third of the participants stated that pay was the worst feature of their job; a fifth of respondents claimed that they would increase the wages if they were a manager. This was because they recognised that the wages in the industry were not very high and that increasing the wages would lead to more people being attracted to the job as well as motivating people to stay within the organisation. Wages is another motivator, which the industry is failing to meet as a significant amount of participants feel that they are not being paid enough.
The findings of the survey has shown that employers need to pay more attention to staffs and should listen to them to find out what there problems are in order to help solve them. All participants that completed the survey felt that what they thought was the worse aspect of their job was also felt by their colleagues which is why they would change these same issues if they were the manager. Eleven per cent of respondents claimed that if they were the manager they would take into consideration the opinion of employees, as they are the ones who are carrying out the job roles so they will have the most information as to what can be changed to make tasks more efficient or easy. In addition, this method will help to motivate employees as they will feel recognised by others and feel that they do have some control over the way that they have to do their job.
Recommendations for employers
The basic principles of motivation should be put into practise in order to help motivate and reduce employee turnover. The survey has shown that better wages, opportunities for promotion and flexibility are required within the industry. Increasing the wages of employees can be seen as a long-term benefit as it will help to retain staffs, which will help to keep costs down. However, although the research has shown that employees would favour a wage increase, this can be implemented in a way that also benefits the business in the short-term as well as the long term. A new or improved incentive scheme can be implemented which will encourage employees to work harder with the intention of earning more money. Both the employee and employer will benefit because the employee will be working harder to make more and or bigger sales in order to make the extra money and the employer will achieve keeping the employees motivated and sales up at the same time.
Opportunities for promotions need to be increased, if people feel that there is a way for them to progress within the organisation, they will be more likely to stay there and try and work there way up. However, if there are no or limited opportunities for employees to further their careers then it will lead to employees eventually looking for other jobs where they will be able to assert themselves and progress ion their careers. As it will not be possible to promote every single employee, the jobs could be redesigned so that employees have more responsibilities, this will help to keep employees stimulated and motivated to work harder. They will also be able to feel more fulfilled, as the job will be more challenging which will prevent them from being bored and fed up at work.
An arising trend seems to be that employees want flexibility from their employers. It is vital for employers to consider this because if it is ignored, it can lead to many individuals looking for a company that can offer them flexibility. Employers need to be more understanding about the situations employees are in and need to recognise that many people have personal priorities that are more important to them then their jobs. It does not necessarily mean that people do not care about their jobs but that everybody is in a different predicament, which can cause their priorities to be different. Employers need to make the structure of the workforce accommodate this trend otherwise they could loose a vast amount of staff due to them finding other jobs that can offer them the flexibility that they need.
However, retail-working environments can vary between organisations so managers should use exit interviews to find out why staffs are leaving. Once the reasons for staff turnover have been identified, the manager should then create and implement a plan, which aims to put an end to these factors, which cause employees to leave. Existing employees should have their opinions about the causes of staff turnover taken into consideration, as it is easier for them to recognise what factors cause staff to leave and what can be done to prevent it from happening in the future. At the same time, this will motivate staffs, as their views will be taken into consideration so they will be made to feel that their opinions are important and that they can have an affect on how the organisation operates. As all organisations differ it is important for managers to do their own research through exit interviews to find out specifically why staffs are leaving the organisation. Although three main reasons have been identified in the findings of the dissertation, the data was from a selection of different retail backgrounds. As these organisations operate differently, the way they structure their staff and pay and motivate them will also be different which is why it is essential for employers to use exit interviews on the staffs that leave.
It is important for employees to be motivated by the employers or else they will go elsewhere for jobs. This is why it is vital for employers to pay attention to how its competitors motivate its employees, i.e. how much they pay them, the incentive schemes they offer, the types of benefits they offer them, the hours/shifts that they offer etc. If employers do not compete effectively for staffs, it will be more difficult to retain the staffs they do have and at the same time achieve attracting new staffs and can even lead to staffs leaving them to go to work for the organisations competitors.
Recommendations for further study
The response rate of the survey was only fifty-four per cent; it would be better to carry out the survey on a wider scale of people in order to establish if there are any relationships that have not yet been discovered. In addition, the survey could be carried out in different cities to see if the results vary according to geographical location.
A focus group consisting of full-time retail workers could be put together to discuss each individual's feelings on the subject. The discussion could be used to stimulate the topic further by finding out in depth the thoughts and views of full-time employees. The information gathered from this could be used to create another questionnaire aimed at full -time workers only or to develop the existing questionnaire created by the researcher. If another questionnaire was developed, it could be created to focus on why people left the retail industry while the initial questionnaire could focus on people who are currently working in the retail industry. From this, information can be gathered about why people do work in the industry and for what reasons others have left the industry.
The questionnaire could be developed further to find out what careers people have changed to since they left the industry. The current questionnaire did not find out if individuals received any induction training when they started retail jobs. This information could be found out to establish if there is a connection between receiving poor or no induction training and the employee turnover rate. The questionnaire could also be adapted to consider why people choose to work in retail, and where they see themselves in five years time; this information will show how seriously people take retail jobs. The rates of pay and incentive schemes could also be examined to find out how employers try to motivate employees through pay and reward.
Another idea could be to research retail shops in specific categories such as fashion, chemists, electronic goods etc to find out if there are any relationships between specific types of shops rather then looking at the industry as a whole. Any relationships could be identified to make it easier for managers to understand what motivates their staffs so they will have an idea of what they can do to motivate employees further.
This dissertation has focused on studying the views and opinions of employees. Research could be carried out to find out why employers do not try to motivate their staff and find out why they do not follow even the most basic motivation principles or even find out why their employees are leaving them. Therefore, the approach should be changed so that the study can focus on the perspective of the employer to determine whether they can justify not doing more to retain their employees.
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Focus Group; Minutes of the meeting
The focus group took place in University in an overlap of two dissertation tutorials on Tuesday 25th January 2005 at 6pm. Parts of this transcript are not verbatim as some of the participants spoke over one another. The people involved were students who have worked or currently work in retail. The names of the participants are:
Me: The purpose of the focus group is to discuss your views on employee turnover within the retail industry. It is well known that the level of employee turnover within this sector is very high and I would like to know your feelings on why u think this happens and how you think managers handle this issue. All have you have worked in retail at some stage so I would like you to draw on your past experiences that have relevance to the topic. Let us start of by discussing where all have you have worked, how long you worked there and why you left.
Marsha: I worked for Marks and Spencer's for six years and the only reason why I left was because I wanted to study for my degree.
Me: Was you working part-time?
Marsha: I started full-time but when I started my degree, I switched to part-time.
Me: Did you enjoy working there?
Marsha: I did and I didn't. I enjoyed the work because I was a supervisor but at the same time, management was very poor and many people were leaving. The store was continuously understaffed so employees were moved between departments without any warning or training.
Me: How did this affect the employees?
Marsha: They did not seem to appreciate it, which led to more people quitting.
Me: Why did you leave?
Marsha: Well as people kept leaving there was a lot of pressure on me, which I did not need as, I was trying to study as well. Also, they didn't pay me a great deal extra to do all the extra tasks so I decided that working there wasn't worth the hassle and I felt sort of undervalued.
Me: How about u Flavia, where have you worked?
Flavia: I worked in Threshers for five months, full-time. I left because it was incredibly boring; I was just doing the same old stuff day in and day out. I did not like the shifts; I was scheduled to work five hours a day and I had to work until late in the evening, which I didn't like.
Me: Did you notice that a lot of people were coming and leaving the job?
Flavia: Yes, a lot. I felt it annoying because I had to help train new staff, which seemed pointless as they kept leaving.
Me: What did you like best about your job?
Flavia: Nothing really, I just used it as a stopgap in my career to motivate me to go back to studying.
Me: Where did you work Josephine?
Josephine: I worked in Jane Norman for four months, part-time. I left because I didn't get on with the supervisor.
Me: Did u enjoy working there?
Josephine: No, because of the management; there were different rules for different people. It wasn't very fair because they didn't treat us equally.
Me: Elvan, where did you work?
Elvan: I worked in Mark One for two years and I'm still working their now.
Me: Over this period, have you noticed a lot of people coming and going?
Elvan: People do leave but it's not from management issues, it's mainly down to poor pay.
Me: So your company doesn't offer commission or bonuses?
Elvan: No they don't, it's just the basic pay. If it's a Bank Holiday its double money.
Flavia: This was the same in Threshers.
Marsha: Marks and Spencer's used to give us bonuses at Christmas in gift vouchers. It was a good incentive but it also meant we could only spend them in the company so in other words, the money was coming back to them anyway.
Me: Well at least they tried to offer their employees something. Do you think if Marks and Spencer's had enough workers that you would still be working there?
Marsha: Possibly, but they would need to sort out their management structure first.
Me: Would better pay be more encouraging?
Marsha: It would definitely be more appealing. Overall, I would have preferred if they just sorted out the management issues so that the job wouldn't be so stressful.
Me: Yes I bet that would have helped a lot. And you Flavia, you didn't really like your job did you?
Flavia: No, I found it completely boring.
Me: If there was a way to be promoted there, would you have stayed?
Josephine: No, because I would feel that it's doing the same stuff. Maybe if I could be promoted to work in the head office then I would have considered staying on.
Me: Elvan, you seemed quite pleased with your job, is there anything about it that you don't like?
Elvan: Just that I don't get paid double for working Sundays.
Me: Josephine, do you think you would have stayed if you didn't have a problem with your supervisor?
Me: Do you think there is anything they could change to prevent people from leaving?
Josephine: Well it's hard to say because I only used to work part-time and I wasn't there for very long. So, I can't really think of anything.
Me: Where do you work now?
Josephine: I work in a bar now.
Me: So do you like it there?
Josephine: Yes I find the atmosphere much more relaxed and I get to meet lots of people.
Me: At least your happy now, that's the main thing. Are you currently working Marsha?
Marsha: I'm not. I'm concentrating on my studies now. There not a lot of time to go so it's worthwhile.
Me: Do you think Marks and Spencer have a plan to retain staff?
Marsha: Well, after staffing got very bad; they increased the wages and have tried to balance the pay out between various departments so that one department isn't underpaid causing it to be continuously understaffed.
Me: What about the rest of you? Do you think any of your previous retail employers have tried to retain their staff?
Falvia: Not really
Elvan: I'm still working for Mark One but they haven't really done anything to stop people from leaving.
Me: If you guys were the managers, what would you do to retain employees?
Flavia: I don't know. I went into the job knowing it was just a stop gap so I knew it wouldn't be long term so I didn't take it very seriously.
Me: It seems that you didn't really like the job, what made you take it?
Flavia: I just finished my A-levels so I just wanted any job just to earn some money.
Me: Was it good pay?
Me: Elvan what would you do?
Elvan: Well I really like my job mostly because we all get on with each other so I guess I'd have to do my best to ensure that there was a happy environment.
Me: Yes I think people also work more productively if they get on as it's easier to communicate with each other and overall there is a better atmosphere. Josephine what would you do?
Josephine: I would probably buy the staffs little gifts to reward them, I think this will help to motivate them.
Me: Marsha would you do?
Marsha: I guess I would have to assess the situation and find out why people were leaving. Once I found out the reasons, I would then have to see what I could do to make things better.
Me: That a good idea which now brings me onto the idea of exit interviews. Have any of you guys had an exit interview? -This is where you are interviewed to find out your reasons for leaving the company.
Me: Do you think companies could benefit from this type of information?
Marsha: Yes it's important to find out what the problem is in order to create a solution.
Flavia: I agree. Managers won't be able to retain staff if they don't know what the problem is.
Elvan: That's true.
Josephine: I also agree.
Me: Okay. I think that about rounds it all up. Thanks to all of you for sparing your time to participate in the focus group.
This questionnaire is aimed at individuals whom have worked within the retail industry.
Q1) What is your gender?
Q2) Which age category do you fall into?
Under 20 □41-50□
21- 30 □50+ □
31- 40 □
Q3) What is your marital status?
Q4) Do you have children under the age of fourteen?
If yes, how many?
Q5) How long have you been working in retail?
0-6 months□3 - 5 years□
6 months -1 year□5- 7 years□
1 year -18 months□7 -10 yrs□
18months -2 years□10yrs + □
Q6) How many different retail jobs have you had during your working life?
Q7) Have you ever left a retail job?
If yes, what were your reasons for leaving?
Q8) Are you still in the retail industry?
No□Please go to Q14
Q9) Where do you currently work?
Q10) Do you work full time or part time?
Full time □Please got to Q12
Part time □
Q11) What other commitments do you have such as another job, children etc
Q12) What is the best feature of your job?
Q13) What is the worst feature of your job?
Q14) When you left your job, did you receive an exit interview?
Q15) If no, do you feel that an exit interview would have helped the organisation to understand why people leave?
Q16) If you were a manager what one thing would you do to prevent employees from leaving?
Thank you for taking the time to fill out the questionnaire, please state any other comments you would like to make on retention within the retail industry;
My initial idea when completing the dissertation proposal was to focus on what motivates and retain people in the retail sector. However, after discussing the idea with my tutor she explained that this subject had already been thoroughly investigated and that it would be more interesting to look at it from another angle. Therefore, I chose to focus my dissertation on employee retention in the retail sector as this subject area interests me a lot. It is general knowledge that employee turnover in this sector is high and I have wondered why organisations don't try harder to retain their staffs. I have worked in retail for the past five years and have seen the affects of high employee turnover but still managers do not try to prevent staffs from leaving which is why I find the topic so fascinating. In my eyes, if I can see how important staffs are to an organisation, especially in retail where these staffs directly handle the customers, then why can't managers realise how important their staffs are to them?
After deciding what area I wanted to cover for the dissertation, I searched for literature to find out what exactly has already been detected in this field so that I could then go on to establish why the turnover rate in this sector is so high and how organisations can retain people efficiently. I found this process very time consuming but also worthwhile, as I was able to find out what theories already existed. From this I will be able to establish to what extent these theories relate to people who work in the retail sector.
After analysing a significant amount of research, I decided to hold a focus group to get a discussion going so that I could get other peoples opinions on the topic. The purpose of this was to then use the information gathered to construct the questionnaire. I found the focus group very informative as it helped me look at issues from other people's perspective which is why the questionnaire features mostly open questions so that people can give their own opinions instead of being tempted to just tick a box that doesn't completely apply to them. This will ensure that the person really thinks about the question in order to give an answer, which is most significant to them. Once I developed the questionnaire draft, we went through it in one of the tutorials where more feedback was given to increase the amount of information that could be collected. Once the questionnaire was modified and all the necessary changes had been made, a pilot questionnaire was carried out in another tutorial. The pilot was a success and so I was able to then carry out the survey. At this stage I have not yet gathered all the primary research, however, the majority has been completed. From carrying out the survey, I found that many people also felt strongly about the high turnover in the retail sector. People have felt unvalued by their employer, which has caused them to leave the industry.
One of the best features about writing the dissertation was that I was able to choose my own topic and pick something that intrigued me, which was a good motivator to keep me focused on the subject. I don't think I would have been able to put as much effort into a dissertation if it did not interest me as I would most probably become bored with it and rush to complete it just to get it over with.
The focus group was a very good experience for me as the discussion was very helpful. The members that took part in the discussion motivated me further as they had very strong opinions and they wanted to know why retention in retail was so high and why hardly anything was being done to reduce it. I was also motivated by the fact that some of the members had been in the same position as me; whereby due to the lack of staffs more pressure was put on them and other colleagues thus leading more employees to quit. On the whole, the focus group gave me the encouragement I needed to carry out the primary research.
Another aspect that I enjoyed from writing the dissertation was the ability to go out and find out why something happens. It always good to have an opinion about issues in the working world but its even better knowing why things happen and what can be done to stop them from happening. The dissertation allowed me to do this because by carrying out the survey I have been able to distinguish issues from others peoples point of view. Overall, I am pleased by knowing that I am capable of carrying out research to find out information.
The worst experience I faced was having an operation right at the beginning of the year. As I was off sick for five weeks, I was held behind with my dissertation as well as my other subjects. This final year has been very hectic as each of the subjects is as demanding as the other, which was why I had great difficulties in catching up with work and trying to stay on top of the dissertation. Even though I managed to get an extension for a coursework, I found it very difficult to balance my time evenly because there was so much work and reading to catch up on. As well as having many presentations to prepare for and online exams to revise for.
Another factor which uninspired me was that initially the literature review, methodology and reflective piece were supposed to be worth part of the final grade. However, this changed during the year, which made it less motivating to hand in work on time, as we would not be graded, as it was not worth anything. This change also put a lot more stress on me as now the dissertation is worth the full grade and marks cannot be made up in any other areas.
Failing the literature review was another bad experience I faced. It really made me feel bad and I had difficulties in reconstructing the review as I kept questioning myself because I did not want to get it wrong again. This also led me to have doubts when writing up the methodology, as I did not want to keep failing the work. However, I am pleased that I did have the opportunity to resubmit the work so that I know that it does meet the required standards.
From the processes of planning and conducting the primary research for the dissertation, I have learnt that it is important to stick to deadlines and to try and meet the targets each week that were made in the dissertation proposal in year two. This would help anybody to stay on track and not be left behind in the work. I also feel that it was very useful to use the discussion group as it is possible to get more in-depth knowledge and at the same time, new ideas or views may arise. Another idea would be to create a focus group with a wider variety of people such as part-time and full-time workers, i.e. people with families and other commitments and responsibilities.
In the future, if I had to do a dissertation again, I would make a plan of everything needed to be done with a realistic time estimate and I would stick to it. When, having to do something as complex as a dissertation, planning is crucial. Another thing that I would change is I would start my literature review during the summer holidays so I would have more time to gather even more research. This would mean I would also have more time to use a wider sample to carry out my survey on.
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