The following is the second article in a 3-part series called “Attention Shoppers… The Competitive Strategy Approach to Addressing the Elephant in the Room of the Retail Crisis: The Customer Experience”

While Black Friday 2023 may not have been a “bah humbug,” it was more of a “meh.” Meaning, at just a 2.5 percent increase over 2022 sales, and not including automotive or inflation, sales were tepid.

Lackluster sales or not, the holiday shopping season is a steady reminder of the critical role that labor plays in any successful retail operation – no matter the season.

It’s no over-statement to say that today, more than ever, labor challenges pose the greatest competitive threat to the retail industry. Not only in wages, but the costs of recruitment, training, advancement planning, retention, benefits and – as has been the trend lately – workforce replacement.

The latter issue goes to the thorn in the side of many in retail – notoriously high turnover. According to the Bureau of Labor Statistics, retail as an industry suffers a 60 percent turnover rate, about 12 percentage points higher than most other industries.

In fact, the dismal retention rate is cited by half of U.S. retail employers as a significant risk to companies hitting their growth goals, according to a 2021 PricewaterhouseCoopers Pulse Survey.

And with an estimated 563,000 retail job vacancies that need to be filled each year – even despite higher salaries and work flexibility – the labor question continues to reign as the top competitive challenge to vex American retail.

The Turmoil of Turnover

Start with the elephant in the room: defection and high turnover. The dual trend has been a common competitive threat to retail for decades. Reasons vary: wages, poaching from competitors, scheduling and hours, and just plain mis-matched employees with the job. No matter the reason, the cost to constantly recruit and re-train new employees continues to eat at retail profits.

Here’s a brief snapshot at some of the real numbers associated with turnover:

Coupled with the notoriously slim profit margins in retail (grocery in particular), the constant need to recruit and train new employees siphons much needed revenue from growing the business to training-related costs.

Get on Board

Here’s another shocking number: 49. That’s the percentage of retail employees who report feeling unprepared for their jobs because of less-than-adequate on boarding.

Second to wages and salaries, training costs can quickly eat into retail profits. The funds that retailers  spend in recruiting and training costs do add up when one considers all that they include, like: job postings, background checks, and employment agency fees; equipment (computers, software, and other job-related equipment); paperwork (I-9 forms, employee handbooks, etc.).

Considering how much is involved in recruiting and training retail employees, it makes sense that retention is another critical pain point for this industry – and why turnover is perhaps the biggest burden to retailers.

Trained, but Not Retained

Trendy phrases like “the great resignation” and “quiet quitting” have dominated labor-related story headlines since the Covid pandemic, but employee turnover is no small matter for retail in particular.

According to the U.S. Bureau of Labor Statistics, the separation rate (or quitting rate) for retail in 2021 was 64.6% in comparison to the average rate of 47.2% across other industries. Some reasons cited for high turnover in retail include pay, scheduling, low unemployment and competition from other retailers or other industries.

When one factors in that most CEOs report that it takes about six months for a new hire to break even, a high turnover rate can leave companies in a “Groundhog Day” tailspin where it seems they’re further away from breaking even because they’re essentially starting over training new employees every day.

Solutions Beyond the Holidays

Naturally, seasonal hiring and training are critical for the retail industry, but the sector remains plagued by labor woes. Following are eight recruitment, training and retention suggestions for retail managers and owners to overcome these vexing competitive barriers – during the Holiday season and beyond.  While the recommendations may read like common sense and are no silver bullet, when applied as part of an overall system of continuous improvement, these and other tactics can only yield much better retention results.


1 Start hiring early … whether gearing up for the holiday season, or for anticipated busy seasons, the earlier companies start hiring, the more likely they are to find qualified candidates

2 Partner with schools and colleges … find creative ways to communicate open positions to local high schools, community colleges and universities to recruit part-time and seasonal retail help

3 Partner with local and community agencies … i.e. local job placement and workforce development agencies, state and county Job and Family Services offices, labor unions, etc.

4 Start inside… Offer referral bonuses to current employees and internal promotional opportunities via internal job postings

5 Stay inside once they’re in… Involve employees in the training process, seek their input on what they need to learn, and make training specific to employees’ jobs responsibilities

6 Refresh training …Check in periodically to make sure employees stay up-to-date on new products, procedures and policies

7 Measure …Evaluate the effectiveness of training programs to ensure that they are meeting business goals, AND that employees are engaged in the process and see the value they get from participation

8 Think long term … A positive work environment with advanced training and professional development opportunities, and which recognizes and rewards employees can lead to greater retention and long-term employment

With a U.S. labor force nearing 10 million, retail continues to reign as one of the top contributors to the U.S. economy, a pathway to entrepreneurship and prosperity, and an industry whose success or failure is inextricably tied to consumer desires. Approaching the labor question as one of competitive strength can keep the sector strong.

Power to your people!