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Turnover_And_Retention

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					     Understanding Turnover
     and Identifying Retention
     Best Practices in the
     Food Retail /
     Wholesale Sector

      Highlights from the
      Final Report
Building a vibrant workforce and rewarding careers
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                                                                     Turnover & Retention


The Need: Context
   • Employee turnover (meaning the turnover of both management and non-
     management staff) impacts productivity, with substantial - but often hidden
     costs associated with the recruiting and training of replacement employees.

   • There is evidence that the food retail / wholesale sector suffers a higher
     rate of employee turnover than do Canadian businesses in general.

   • Identifying employee retention as central to their mandate, the Canadian
     Grocery HR Council (CGHRC) commissioned:
        – a survey of management and non-management staff (2008)
        – the development of a turnover cost formula and calculator suitable
          for use as a management tool by store/facility owners, general managers
          or human resource managers.


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                                                                     Turnover & Retention


  The Need: Key Study Objectives
    1.    Solicit and analyze the perspectives of
          management and non-management staff in
          the industry regarding the extent of
          employee turnover in the sector.

    2.    Define management practices that are most
          effective in reducing employee turnover.

    3.    Make the true cost of turnover explicit for
          store-level managers through development
          of a turnover cost formula and calculator.



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                                                                     Turnover & Retention


The Process
   •     A telephone survey of managers and an online non-management survey
         provided rich data on employee turnover by region, size and type of
         ownership structure, and about best practices regarding employee retention.

   •     A turnover cost formula and calculator were developed using information
         from key informant interviews, previous studies conducted by the CFIC and
         a literature review.

   •     A draft calculator was developed to compute the cost for one
         vacancy/replacement case (i.e. one individual leaving a part-time position
         vacant and needing to be replaced). An estimate of the user’s annual
         turnover cost for this specific job function can then be calculated.



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                                                                     Turnover & Retention


The Participants
     •      A total of 870 managers and 481 non-management staff in all
            regions and in all facets of the industry participated in the
            nationwide survey.

     •      For a more in-depth analysis of the participant profile, see
            Canadian Food Industry Council Sector Survey for Labour
            Market Intelligence Reports: Highlights from the Final Report.

     •      Participation in the turnover cost formula and calculator
            development included interviews and pilot testing of the cost
            factors and formulas with store/facility owners and managers
            across Canada.


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                                                                               Turnover & Retention


The Results: Turnover Rates
   •     The majority of all employee
         departures were voluntary (83%).

   •     There was an overall employee
         turnover rate of 38.7%, with an
         average voluntary turnover rate
         of 31.7%.

   •     The reported turnover rate
         was highest for part-time
         non-management staff (64.9%).

                                                                     Table 1: Average turnover rate
                                                                              of all employees) by region

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                                                                                Turnover & Retention


The Results: Turnover Rates
    •     Facilities in urban areas experienced a higher rate of overall
          turnover (40.2%) than those in rural locations (28.1%).

    •     Turnover varied with
          the type of ownership
          structure:




                                                       Table 2: Average turnover rate (of all employees) by
                                                                ownership structure.

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                                                                     Turnover & Retention


  The Results: Best Practices
•      Resist calling employees in to work during scheduled time off. If seasonal
       demand or high turnover makes this necessary, proactively engage employees
       in planning how to distribute the workload.
•      Maintain an employee training program. Businesses where training is
       perceived as sufficient are more likely to outperform their counterparts in
       employee retention.
•      Offer competitive pay rates. Compensation is - not surprisingly - a factor in
       employee retention, but not as powerful as many employers believe.
       Employers should communicate the full value of the compensation package,
       and particularly, of the benefits.
•      Engage with employees, and recognize and reward good behaviour. For
       example, provide recognition for a job well done, clearly define performance
       expectations, clarify procedures, ensure workplace efficiency and
       accommodate conflicts between work and family responsibilities.
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                                                                     Turnover & Retention


The Results: Turnover Cost Calculator
    •     The calculator contains six core cost factors that impact an
          organization when an employee leaves:
           administration and record-keeping
           the exit interview
           vacancy costs (i.e. costs associated with filling a position on an
              interim basis)
           replacement costs:
              • advertising, screening, testing, interviewing and checking
                   backgrounds
              • the administrator’s time to undertake these functions
           orientation, training and on-the-job coaching
           uniforms, footwear and other material items provided by the
              employer
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                                                                     Turnover & Retention


  In Summary
     •      The management and non-management surveys provide a
            unique and valuable opportunity to cross-reference managing
            practices with incidence of turnover, resulting into best practices
            that managers can implement to enhance retention.

     •      These best practices have been summarized in the best
            practices guide to employee retention entitled Breaking the
            Employee Turnover Cycle – Turning Things Around, which is
            available on the CGHRC website at:
             www.cfic-ccia.ca/images/pdf/calculator_brochure_rev9j.pdf.



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                                                                     Turnover & Retention


  In Summary
     •      The Turnover Cost Calculator is a key outcome, available in both
            express (based on the results from pilot participants) and detailed
            (customized to an organization) versions on the CGHRC website at
            www.cghrc.ca. While on the home page, scroll down and click
            on the Recruit and Retain tab, followed by clicking on the Cost
            Calculator tab in the drop down menu on the left hand side.

     •      Turnover can be described as an “expense without an invoice.” The
            Turnover Cost Calculator allows food retailers to generate that invoice
            and determine the very real impact that turnover is having on their
            bottom line.



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                                                                     Turnover & Retention


  In Summary
•      For example, if the calculator
       determines that the average
       cost to replace a frontline,
       part-time employee is $1300,
       and a store’s net margin is
       2% to 4%, an operator will
       have to sell between $32,500
       and $65,000 in groceries to
       recover that cost!




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                                                                           Turnover & Retention




                                      Canadian Grocery HR Council (CGHRC)
                                         2595 Skymark Avenue, Suite 200
                                               Mississauga, Ontario
                                                     L4W 4L5

                                                   Tel: 905.624.3060
                                                   Fax: 905.624.3061
                                               Toll Free: 1.888.624.3060
                                                 Email: info@cghrc.ca

                                                     www.cghrc.ca




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                                                                           Turnover & Retention




                            Funded by the Government of Canada's Sector Council Program.




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