How C-stores Can Stem Turnover in Today’s Tight Labor Market
NATIONAL REPORT — With the U.S. unemployment rate low and minimum wage increases growing in popularity across the county, it's no surprise convenience store operators are finding it challenging to not only find store-level employees, but also keep them.
Even knowing it's a tight labor market, recent numbers presented at the 2019 NACS State of the Industry Summit were a bit surprising. Turnover among store associates in the convenience channel hit 118 percent in 2018, according to NACS, the Association for Convenience & Fuel Retailing. While that was down from 121 percent in 2017 — and a vast improvement from an industry high of 133 percent in 2016 — the c-store industry’s turnover rate still soars above the total retail industry, which comes in at 59 percent.
"Jobs in the convenience store industry have differing demands and requirements than roles in other industries. … Schedules are part of the challenge. When you are running a 24-hour operation, trying to recruit people to work all of those shifts can play a factor in your ability to recruit and retain team members," said Joanne M. Loce, managing partner of Fortify Leadership Group.
The number of opportunities available to job seekers today doesn't help, either.
"It's a very tight labor market. Prospective and current employees can get jobs in multiple places, and they are potentially moving from role to role — that may even mean between competitors," Loce explained. "Some of that turnover could be they move to work from one convenience store to another. There may be a perception of a better role, better hours, better career advancement, or potentially higher pay and better benefits at another organization."
The Secret Sauce
Despite the challenges, some convenience store retailers seem to have found the secret sauce. Duxbury, Mass.-based VERC Enterprises is among them.
The New England retailer has 269 store-level employees, including 29 store managers and 240 team associates. Those associates are evenly split between 121 full-time and 119 part-time employees. Compared to the overall convenience channel turnover numbers, VERC sees very little turnover. Last year, the company had just a 28-percent turnover rate among hourly associates at its 29 c-stores.
As more states and municipalities implement minimum wage hikes, c-store operators must follow suit — not only to be in accordance with the law, but also to keep in line with other retailers. This may even be the case if the hourly wage remains unchanged in their operating area.
VERC's operating footprint is mostly in Massachusetts where it operates 27 convenience stores. Its other two stores are across the state line in New Hampshire.
The minimum wage in Massachusetts increased to $12 an hour on Jan. 1 of this year, but Barry Ahern, vice president of operations, said the retailer reviews its employee compensation every year.
"When we look at the minimum wage increase, we take that into consideration when we give raises," he said. "When Massachusetts went up to $12, we did not have to make a lot of adjustments because the majority of our employee base was far above the increase."
Upping your base hourly wage is just one part of the equation in achieving a steady workforce, though, according to Loce.
"Each retailer is going to try a different strategy to get people to come work for them, particularly in dense markets where competitors are across the corner. In those markets where there is more than one choice, the question is what is going to differentiate you," she posed.
Often, companies will use a total rewards approach — addressing what employees get paid in their paycheck, as well as offering additional benefits. "These benefits can include things such as bonuses, incremental pay, tuition reimbursement, time off or health benefits, to name a few," Loce said. "Organizations need to determine the mix of pay and benefits to attract employees."
At VERC, many successful hires have come through its employee referral program. If an employee refers a new team member, that employee receives $100 on the day the new team member is hired and another $100 after 90 days.
"If it's a good employee that has tenure and is engaged, they are going to refer someone who knows what the expectations are," Ahern said.
Click below to read our full report, "Turning Around Turnover."