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Rick Blabolil

Disengaged Employees Are Costing Retailers Plenty

We’ve been researching employee engagement for years, through our participation with the Performance Improvement Council and Northwestern’s The Forum. That’s why a recent uptick in employee voluntary separations, especially in retail, caught my attention. Engaged employees are more likely to stay with their employers, but in retail voluntary separations were 16 percent higher than the national average in 2013, according to Equifax Workforce Findings.

Clothing and “clothing accessory” stores were especially hard hit, where more than 75 percent of employee turnover was voluntary in 2013.

On the customer side, we’ve got more bad news: 90 percent of shoppers who leave a store empty-handed say they do it because they can’t find the right person to help them. The same survey, from TimeTrade Systems, Inc., found that 93 percent of shoppers are more likely to buy if they get the help they need and 90 percent would shop at the same store next time.

We know that engaged employees deliver better customer service. In a study of 40,000 customers and 500 retail employees, Answers™ Experience (AXI): 2014 U.S. Retail Section found a causal relationship between employee engagement and customer service specifically in retail. The survey gave a stunning example of the positive impact engaged employees can have on a retail operation:

“…a mid-sized specialty retailer with 300 stores, a $30 average order value and about one million transactions per month can generate an annual revenue increase of three percent by prioritizing improvements to store employee engagement….” according to a January 15, 2015,blog by Eric Feinberg, As Senior Director, Product Strategy, Answers Cloud Services.

Engaged employees are more likely to stay with their employers and they also deliver better customer service—both of which have a positive impact on the bottom line. This is especially important in retail, where margins are notably thin. So, how do you keep employees engaged?

A key component of employee engagement is recognition. A culture of appreciation and recognition for one another is enabled with the help of formal and informal rewards and recognition programs. In addition, management needs to:

Empower employees to make decisions. Nordstrom’s empowers all of its employees to make on-the-spot customer service decisions. The result? Extraordinary customer service. At the other extreme, we have retailers where the customer/employee relationship is purely transactional. Big box warehouse environments are especially prone to this.

Have a clearly defined career path for frontline employees. Many people turned to retail jobs as a quick fix to their lack of opportunity during the recession. Now that the economy’s improving, they are leaving the retail floor for opportunities that fit their long-term career goals. Retailers have already invested in those employees through hiring and training. Why lose that investment because those employees don’t see a future there?

Make recognition personal. Find ways within your rewards and recognition programs to be “personal.” Create communities for people with similar interests to interact. Incorporate social recognition so that co-workers can connect, share and acknowledge each other’s efforts. Retailers need to demonstrate to their employees that they know and care about them, and don’t see them as expendable.

Practice on-the-spot recognition. If you’re a retailer (or in any industry where customer service is critical) and you see an associate doing something especially well, or going out of their way to help a customer, say so. It only takes a minute to say “thanks” or “great job” and the impact can last for days.

Retailers need to link their rewards and recognition program to their brand. Every business wants to be perceived in a unique and positive way. This is a part of their brand. Retail employees are the most visible representation of a store’s brand. Take the opportunity to turn your most valued asset—your people—into “brand ambassadors.”

The economy is turning around, but retail sales are still a bit sluggish, dropping 0.6 percent in February 2015 and 0.8 percent in January, according to the Commerce Department. Engaged employees can help your company create memorable experiences for your customers; that can, and will, generate loyal customers.

Would you like to learn more about rewards and recognition programs that create positive employee engagement? Contact a Marketing Innovators engagement specialist today.