But figuring out how to pay your employees a salary that they consider fair and competitive is no simple task. With rising minimum wages and increasingly competitive labor markets, it can be difficult to keep up with what’s considered fair compensation in your market or industry. According to a recent poll, low compensation was the primary reason employees listed they have left or would leave a job. Competitive compensation is essential to attracting and retaining the talent that makes your business thrive.
Retail businesses often operate on thin margins, meaning that changes in employee compensation—often your business’s biggest cost—can have a significant impact on your bottom line. However, providing competitive wages can also be a long-term investment that boosts employee stability, which can reduce costs incurred from high employee turnover and rehiring.
Your employees are one of your most valuable assets. Higher compensation, paired with other improvements in job quality, can lead to greater productivity and improved customer service, as well as attract qualified candidates—helping not only your employees, but also your bottom line. While the true cost of employee turnover can be hard to calculate due to the numerous intangible and time involved, some studies estimate the cost to replace a $10/hour retail employee is about $3,330. With a median turnover rate of 67% for part-time retail workers, turnover could cost an employer with 10 employees over $20,000 annually.