Results from Zale's third fiscal-quarter were improved from one year ago, but the chain-store didn't increase sales more than the U.S. consumer price index for jewelry. Gitanjali, on the other hand, reported very robust sales and a surge in profit for its fiscal year. Hearts On Fire launched its new concept store in Las Vegas (pictured below). Ross-Simons launched its video series meant to help shoppers discover their inner personal style with jewelry accessories.
Finally, the Hay Group reported a slight drop in turnover rates for the U.S. retail environment in 2011, which included Zale and 53 other companies, but concluded that given such an emphasis on ensuring profitability right now, retailers should take steps to retain talent.
With an improving job market and solid first quarter sales, retailers are experiencing more movement among their store hourly workers. Retailers report a median turnover rate of 67 percent for part-time store workers, a 33 percent increase over 2011. One in five retailers report that they have experienced more turnover in the first part of 2012. Full-time employee turnover fell slightly to a 24 percent.
“Higher employee turnover is a double-edged sword,” said Maryam Morse, national reward practice leader of Hay Group’s Retail practice. “On one hand, it’s a harbinger of an improving economy, but on the other it’s a significant challenge for retailers who will need to devote more time and resources to retention and recruiting.”
For the remainder of 2012, 82 percent of retailers surveyed expect to see the most turnover among their store hourly workers. Nearly one-third of respondents say they expect to see high levels of turnover among hourly workers at distribution centers.
Turnover concerns have retailers focusing more on retention. When asked about key tactics for reducing turnover, 61 percent of retailers cite career pathing and 54 percent point to training. Only 30 percent cite changes to compensation plans. In positions with higher turnover, 74 percent of retailers report that pursuit of better opportunities was the primary exit reason, rather than a higher salary (44 percent).
“Employees have greater longevity with an organization when they are satisfied with their growth and future opportunities. Compensation should be internally equitable and externally competitive, but it’s not typically a differentiator that drives people to leave,” noted Morse.
Although compensation is not the top strategy for retaining employees overall, Hay Group’s March 2012 survey of retailers’ salary budgets found that it is one of the tools used to hold on to high performers. Retailers have budgeted an average of 3.6 percent in merit increases for top performers this year, up from 3.2 percent in 2011 and notably more than the 2.8 percent planned for employees overall this year.