Labour turnover in the retail industry: Predicting the role of individual, organisational and environmental factors

This paper aims to identify key variables that influence the variability of labour turnover.

The approach used in this research is a case study of a major retailer. The key data sources are an index for local competitive and labour market factors, an annual employee survey, and internal labour turnover data for each UK unit of the retailer. The method used for analysis is stepwise regression which identifies the key relationships that predict labour turnover.

The findings show that environmental factors such as local labour markets have a major influence on labour turnover. Organisational factors such as company culture and values are a significant influence. Management behaviour as seen through operational and control variables are also of importance. Individual employee variables are also important in decisions concerning turnover.

The statistical analysis accounts for 38.7 per cent of the total variance in labour turnover. There are, therefore, other factors which are not assessed in this paper which also contribute to labour turnover. Whilst this study is of retail units across the UK as a whole, it is of one organisation and statistical generalisations cannot be made from this research.

A significant paradox is found in which, as employees become more embedded and familiar with the organisation, its valency for them diminishes and labour turnover increases. This poses a challenge for retailers: how can they retain valued employees who find that as their self‐esteem increases they wish to search for better jobs elsewhere?

This research uses a statistical approach to provide new findings concerning the attitudes of individuals to their work and good explanations of the factors involved in labour turnover. It also provides statistical predictions which could be used by managers who wish to improve performance and decrease labour turnover at the retail unit level.