3 Strategies For Improving Quality Of Hire For Retail
Annual turnover rates in retail range from 50% to over 100% for some retailers.
With the average cost to replace an entry-level retail employee calculated to be $3,328, turnover gets expensive quickly. As an example, if Walmart replaced 50% of their 500,000 entry-level employees in an year, it would cost them approximately $850,000,000!
It makes sense then that quality of hire for retail generally focuses on turnover. The responsibility for increasing quality of hire by decreasing turnover usually falls on the recruiting department.
Here are 3 tips for improving quality of hiring for retail.
Strategy 1: Offer a competitive salary and incentives
A survey of retail employees by Korn Ferry found the #1 reason for leaving a job was “better opportunities / promotions” followed by more money. When asked what they wanted from retailers to make them stay, employees listed career pathing and better compensation packages.
With historically low unemployment rates creating a strong candidate market, retailers such as Walmart and Target have responded by increasing their minimum wage to attract and retain their retail talent.
Strategy 2: Invest in better training
Korn Ferry’s survey of retail employees found “proper training” to be one of the top reasons that would make them stay at a company.
A report by Indeed found 41% of employers find entry-level positions the hardest to fill. They recommend retailers recruit truly entry-level candidates – those without prior experience and train them – rather than require 1 or more years of experience.
Retailers can invest in training their entry-level employees with innovative new tools. For example, Walmart has incorporated virtual reality (VR) into their training. Their employees wear an Oculus Rift headset while encountering real-world work scenarios such as dealing with holiday rush crowds.
Strategy 3: Explore new screening tools
Jobvite reports the typical high-volume job posting receives more than 250 applications. When you’re recruiting for hundreds or even thousands of open retail positions, this adds up to hundreds of hours manual resume screening.
A new category of recruiting software uses artificial intelligence (AI) to automate the screening process by learning what the experiences, skills, and qualifications required for the job are and then ranking and grading new candidates who match the profile (e.g., from A to D).
This type of AI software is more accurately and quickly able to screen candidates that match the requirements for retail positions, which should lead to both better performance and lower turnover.