The retail sector has been at the forefront of the Great Resignation sweeping across North America. In 2022, the retail sector had the highest staff turnover rate of any industry, outpacing the overall US quit rate by 70%. Most worrying is that this phenomenon is being led by managers, with 63% of managers considering leaving their jobs versus 36% of non-managers.
Alongside the high cost of replacing employees, this high turnover rate — particularly in senior roles — also has detrimental effects on the supplier relationships that are core to the success of any retail business. In this article, we look at the issues caused by high turnover in these critical B2B relationships and offer a solution that will minimize their negative effects and strengthen your business in the future.
How high turnover issues impact B2B relationships
Issue 1: Loss of historical knowledge
When an employee resigns, it’s not just a case of losing someone to cover a shift. They take their knowledge, relationships, and experience with them when they leave. With so many managers leaving retailers (and more expected to follow), this knowledge loss is felt within your and your supplier’s business.
In addition, a recent study found that almost half of the managers surveyed agreed that “loss of knowledge or expertise will harm their organization’s ability to hire new employees,” and even more (56%) agreed that “it will hurt the organization’s ability to onboard new employees.” The inability to hire and successfully onboard only exacerbates the knowledge lost.
Issue 2: A lack of trust
With employees cycling through retailers faster than ever, it has become challenging to maintain high levels of trust in the supplier–retailer relationship. Today, 55% of CEOs believe a lack of confidence threatens their business.
Trust reflects the state of a relationship. Without robust interpersonal relationships between employees within both parties, there’s evidence that productivity, engagement, and innovation levels all drop, according to a Deloitte study. This study also showed that people are 50% less motivated to work with and for someone they don’t trust than someone they do. Without the motivation to find shared solutions, the supplier and retailer’s business success is in jeopardy.
The solution: Continuous supplier engagement
With so many factors converging to create the high turnover of the Great Resignation, the best solution for retailers is to develop systems bigger than the individuals within them. Simply put, you must embed continuous engagement into your supplier relationship.
In our experience working with leading retailers and suppliers across the globe, the first and most crucial step is to create a structured and reliable way to listen to your suppliers actively. Through Advantage Report, our engagement experts have seen firsthand how consistent communication between B2B partners has three significant benefits that mitigate the loss of knowledge and trust that occurs when staff turnover is high:
1. It builds layered relationships across teams
For many teams, staff turnover has an oversized impact on B2B relationships because relationships exist from person to person rather than team to team. Continuous engagement creates opportunities for more employees from the retailer and supplier to get to know and work with their counterparts. For example, surveys provide a clear mechanism for all team members to share their experiences and learn from others. When one person leaves, others are well-positioned to continue vital relationships.
2. It ensures that knowledge is shared faster and more efficiently
After an employee leaves, retailer partners struggle to share information that could help drive business in a timely and effective manner. Continuous engagement means a steady stream of opportunities for suppliers and retailers to learn and grow together.
This continuity prevents a loss of nuanced and critical information that can reside only with retail staff. When an employee leaves, engagement is slowed and sometimes halted, hindering rapport with the supplier, and reducing the flow of communication. Constant engagement allows fluidity of that information between supplier and retailer teams rather than with a singular person. With this approach, new employees can fall into this engagement system, improving knowledge transfer and creating a smoother transition in business partner relations.
3. It empowers suppliers to be active participants in their retailer’s success
A supplier is only as successful as its retailers, with the retailer’s ability to sell products influencing the opportunities and profitability of suppliers. Continuous engagement gives suppliers a chance to plan collaboratively, achieve greater alignment with the retailer’s goal and tactics and offer a strategic perspective on unlocking new opportunities and revenue for both parties.
There is no single solution for the Great Resignation, but there’s no reason that should limit the success of your supplier–retailer partnerships. Ultimately, by investing in listening and learning from one another through engagement programs, you create opportunities to stand out from the crowd and find new ways of delivering for your shared customers.
To learn more about minimizing the impact of turnover on your B2B relationships, speak to one of our Engagement Advisors today.