Employee Retention

The retail sector is well-known for its high employee churn rates. In fact, two-thirds of retail executives plan to allocate moderate-to-major investments toward workforce hiring and retention, underscoring it as a top priority. With competition for top talent intensifying, it's more crucial than ever for retailers to prioritize strategies that improve employee retention.

But what is the current turnover rate in the retail industry, and how does your organization stack up? Read on to explore key industry statistics on employee retention in retail and learn how to calculate and monitor your company's turnover rate effectively.

Turnover Rate vs. Retention Rate - What’s the Difference?

Turnover and retention rates might appear similar at first, but grasping their distinct calculations is key to understanding your company's talent retention capabilities.

Employee retention measures the percentage of employees who remain with your company over a specified period, highlighting your organization's success in keeping staff engaged and satisfied.

Employee turnover, conversely, tracks the number of employees who depart during a given period. Turnover encompasses both voluntary and involuntary exits, while retention typically considers only those present at the period's start.

In essence:

• Retention gauges workforce stability.
• Turnover assesses workforce movement.

By monitoring both, companies can evaluate retention initiatives and measure employee engagement effectively.

Average Employee Turnover Rate in Retail

Based on the latest U.S. Bureau of Labor Statistics (BLS) data, the average annual retail employee turnover rate is approximately 60%. This ranks retail among the highest-turnover sectors, following hospitality (130%), arts and entertainment (127%), and construction (69%).

By Position: Turnover in retail varies widely by role:

• Part-time hourly store employees see the highest rates at 76%.
• Corporate positions have much lower turnover, around 17%.

Ongoing workforce trends, including the lingering effects of the "Great Resignation," continue to heighten challenges in retaining frontline retail staff.

How to Calculate Your Employee Retention Rate

Regularly tracking your employee retention rate is vital for workforce stability. This metric pinpoints issues and helps gauge the impact of your retention efforts.

To compute your Employee Retention Rate:

• Select a period (e.g., quarterly, semi-annually, or annually).
• Count employees at the period's start.
• Count those remaining at the end.
• Apply the formula: Retention Rate (%) = (Number of Remaining Employees / Number of Employees at the Start) x 100

For efficiency, consider using an online retention rate calculator.

Improving Your Employee Retention Rate

Boosting retention should be central to your HR approach. Here are actionable strategies to lower turnover and cultivate a more engaged retail team:

Seek Out Feedback. 37% of retail workers don’t feel heard by their organisation. Providing regular channels for feedback is essential. By addressing concerns, implementing suggestions, and demonstrating that voices matter, you foster trust and loyalty.

Invest in Technology. Modernizing HR and workforce management with digital tools boosts efficiency and employee satisfaction. Features like streamlined scheduling, communication platforms, and performance tracking reduce friction, enhancing job fulfillment and curbing turnover.

Strengthen Your Training Programs. Effective training drives productivity and retention. Beyond basic skills, engaging methods like mobile learning platforms offer flexible development opportunities. Clear career paths further motivate employees to commit long-term.

Recognize and Reward Performance. Simple acknowledgments—through programs, incentives, or gestures—elevate morale. Valued employees are more likely to stay, promoting excellence and a strong culture.

Foster a Positive Company Culture. A supportive, inclusive environment aligns employees with your mission. Team-building, transparent communication, and exemplary leadership are key to building connections.

Offer Flexible Scheduling. Irregular shifts are common in retail. Flexible options support work-life balance, increasing satisfaction and reducing exits.

Improve Work-Life Balance. Wellness initiatives, mental health resources, and ample paid time off contribute to healthier, happier teams less prone to seeking opportunities elsewhere.

Conclusion

In retail, where turnover can soar, prioritizing retention is essential. Strong retention cuts hiring and training costs while building an experienced team that delivers superior customer service and business results. By tracking retention, deploying targeted strategies, and refining them ongoing, you can create a dedicated workforce driving your retail success.

References

Deloitte (2025) 2025 US Retail Industry Outlook. Available at: https://www.deloitte.com/us/en/insights/industry/retail-distribution/retail-distribution-industry-outlook.html

DailyPay (2024) Retail Turnover Rates In 2024. Available at: https://www.dailypay.com/resource-center/blog/employee-turnover-rates-in-retail/

DailyPay (2025) What Is the Average Employee Retention Rate by Industry? (2025 Update). Available at: https://www.dailypay.com/resource-center/blog/employee-retention-rate/

Fair Play Talks (2022) Over 1/3 Retail Workers Don't Feel Heard & Want To Quit. Available at: https://www.fairplaytalks.com/2022/04/05/over-1-3-retail-workers-dont-feel-heard-want-to-quit-report-reveals/

McKinsey & Company (2024) How retailers can build and retain a strong frontline workforce in 2024. Available at: https://www.mckinsey.com/industries/retail/our-insights/how-retailers-can-build-and-retain-a-strong-frontline-workforce-in-2024

U.S. Bureau of Labor Statistics (2025) Job Openings and Labor Turnover Summary - 2025 M06 Results. Available at: https://www.bls.gov/news.release/jolts.nr0.htm