Employee retention: why staff are independent retailers’ most valuable asset

Smaller builders’ merchants and hardware stores rarely have the bargaining power to compete with the national chains on price.

20th December 2015

However, as technology becomes more affordable, every business can wield the tools that were previously only available to big business. Now that the playing field is a little more level, you can maintain and grow your share of the market by competing in other ways. In today’s article, we argue that improved employee retention rates are the most valuable asset that your business can have.

The costs of recruitment

Practically every business aims to improve employee retention, for one simple reason: hiring staff costs money.  Even if your business advertises vacancies with a simple A4 poster in the window instead of using recruitment agencies or taking out adverts in the press, there are still plenty of costs associated with the hiring process. These include:

·         Time spent interviewing potential staff. One of your most senior staff members will have to take time out of their day to talk to new staff. Depending on how many candidates you get and how thorough your recruitment process is, this could eat up many hours of valuable time.

·         Training. Even if you only have an informal training programme set up, you’ll still have to spend some of your experienced staff members’ time on training the new recruit.

·         Lower productivity. The new recruit will do most of their learning on the job. They won’t be as productive or effective as staff who have been there for years.

·         Lost engagement. When staff leave, other employees may become demoralised and may question why their former colleague left. This could reduce engagement and at least temporarily affect productivity.

All these factors have some impact on your bottom line, but let’s look at this from the other side. How can independent retailers take advantage of a strong employee retention rate?

The value of experienced employees

Strong customer loyalty depends not on the lowest prices, but on the best customer service. Experienced, well trained, knowledgeable staff are ideally placed to provide top class service to trade and non-trade customers alike. With a lower staff turnover rate that the chains, your regular customers will soon begin to recognise your staff – and their expertise.

If your customers can trust the recommendations and advice of your staff, they have another reason to visit your store ahead of any other. This trust also opens up new cross-selling opportunities: your staff needn’t be as cautious about recommending related products to customers if they’re regulars who value their advice.

Employee retention and customer retention rates are undeniably linked. Customer trust in your experienced staff is also likely to draw in more customers, as word of mouth marketing kicks in. This is where greater investment in your staff pays off.

Encourage staff to stay at your business by providing them with advancement opportunities, flexible working hours, competitive wages, and above all, your respect. If your business delivers a good working environment for employees, they’ll be less inclined to look for work elsewhere.

Improving staff retention rates isn’t the only way to advance your customer service efforts. Find out how software for builders’ merchants can have a positive effect on the retail experience for consumers.

 

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