At the 2016 Co-operative Retail Conference in Stratford-upon-Avon, Co-operatives UK announced a ‘£100 million challenge’ for the co-operative retail sector.
According to research by Oxford Economics, the total cost of replacing a member of staff – taking into account advertising, interviewing and administration – is over £30,000.
In the retail sector this is slightly lower, at an estimated £20,000 per employee. However with a combined staff of 110,000, these costs make employee recruitment and retention an important commercial concern for UK customer-owned retailers.
“Mostly these are hidden costs through looking at lost productivity. But even stripping down their numbers just looking at advertising, backfill, interviewing and administration, they show more than £5,000 on average,” Co-operatives UK’s secretary general Ed Mayo wrote in his blog.
“In the retail sector, labour turnover is estimated to be at the extraordinary level of 40% staff turnover per year. This is average, where best practice will be much lower.”
Evidence shows that businesses which have a clear set of values shared among staff perform better than those that don’t. And when employees feel an emotional involvement in and commitment to a business, there is a lower staff turnover. Mr Mayo believes this is where co-operatives have an edge.
“As businesses guided by internationally agreed values and principles, co-operatives are uniquely placed to benefit from shared values across the staff team. These values are brought to life in a variety of ways, but can form a bedrock for a co-operative’s culture and behaviour.
“Making the most of these values presents a fantastic opportunity for co-operative retailers. Every 1% reduction in staff turnover results in a significant saving for retail co-operatives – to the tune of £21m – and £14m of that would be for the Co-operative Group.
“It is not unreasonable to lay down a ‘£100 million challenge’ to UK retail co-operatives – to set a target, over time, of realising £100 million worth of gains on an annual basis, through reduced staff turnover.”
Read more: Full coverage of the Retail Conference.