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

Average Employee Turnover Rate in Retail

According to the latest U.S. Bureau of Labor Statistics (BLS) data, the retail industry faces a significant average annual turnover rate of approximately 60%, placing it among the most volatile sectors for employee retention. While this figure is substantial, it follows even higher turnover rates in hospitality at 130%, arts and entertainment at 127%, and construction at 69%. These statistics underscore a widespread challenge across labor-intensive industries where high attrition remains a persistent barrier to operational consistency and long-term growth.

The stability of the retail workforce fluctuates dramatically by position, with part-time hourly store employees experiencing the highest turnover at 76% compared to just 17% for corporate roles. This stark contrast highlights the specific difficulty in retaining frontline staff, a struggle further complicated by the lingering effects of the "Great Resignation." These ongoing workforce trends continue to pressure organizations to refine their retention strategies for those on the store floor who are statistically most prone to leaving the sector.

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

Prioritizing a culture of communication and growth is the first step toward reducing turnover and building a loyal retail team. Since a significant portion of workers feel unheard, HR leaders must establish regular feedback channels to build trust and ensure employees know their voices matter. This sense of belonging is further strengthened by robust training programs that offer clear career paths and recognition initiatives that celebrate high performance. When employees see a tangible future within the organization and feel genuinely valued for their individual contributions, they are far more likely to commit long-term and contribute to a supportive, inclusive workplace.

On the operational side, modernizing the retail experience through technology and flexibility is essential for maintaining employee satisfaction. Implementing digital tools for streamlined scheduling and internal communication reduces daily friction, allowing staff to focus on their roles rather than administrative hurdles. Furthermore, addressing the unique demands of the retail industry by offering flexible shifts and comprehensive wellness initiatives directly improves work-life balance and prevents burnout. By combining efficient, tech-driven workforce management with a genuine commitment to employee well-being, organizations create a sustainable environment that naturally curbs exits and promotes overall excellence.

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