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Half of frontline retail workers are considering quitting. What might make them stay?

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Frontline retail’s Great Attrition

The news

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Turning to teens. Some American teenagers may be out of school, but they’re not idle. In June 2022, teens’ labor participation rate climbed to 43%, the highest level in more than a decade. The active summer job market for teens is welcome news for some sectors contending with ongoing labor shortages. Businesses added 884,000 jobs for 16- to 19-year-olds, an increase of 41% over the previous year. Leisure and hospitality, in addition to retail, hired the most teens, according to the June figures. [Bloomberg]

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Return-happy shoppers. Retailers already dealing with high inflation and supply chain problems face an additional challenge: a glut of inventory. Rattled by rising prices, many consumers are buying essentials like food and fuel but limiting spending on discretionary items, such as clothing and gardening tools. Shoppers are also making more returns. US consumers sent back $761 billion in merchandise in 2021, an average of 16.6% of total sales. To offload merchandise, businesses are cutting in-store prices and turning to liquidators. [NYT]

“Retail and hospitality workers report an almost 30% higher likelihood to leave their jobs than we’ve seen in other sectors.”

Our insights

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Retail’s revolving door. In the US, one in five employees—more than 30 million people—work in retail and hospitality. At least half of frontline retail workers want to quit, making this the part of the US economy that’s been most affected by the Great Attrition. Since turnover is linked to performance and to how consumers perceive brands, it’s a big problem. Yet businesses that manage this well can widen their lead over competitors, attracting workers who are more engaged and more satisfied with their jobs, reveal McKinsey’s Bryan Logan and colleagues.

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Why they leave. A desire for flexibility is the number one reason US frontline retail workers want to leave, new McKinsey research shows. Employees crave greater independence and control over how they work, including deciding which days they work and what times they start shifts. Retail leaders that meet workers’ need for flexibility can reap big benefits. One big-box retailer saw “a massive improvement in retention rate” after it started letting workers choose their jobs each day, says Logan. See the top five drivers of attrition in US frontline retail.

Fight attrition in retail

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by "McKinsey On Point" <publishing@email.mckinsey.com> - 10:10 - 23 Aug 2022

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Half of frontline retail workers are considering quitting. What might make them stay?

Frontline retail’s Great Attrition

The news

“Retail and hospitality workers report an almost 30% higher likelihood to leave their jobs than we’ve seen in other sectors.”

Our insights