Dive Brief:

• The average turnover cost per grocery store is $67,200, according to an estimate from Chris Cooley, co-founder of MyHRConcierge and SMB Benefits Advisors, that appears in The Shelby Report.
• The most desired benefit for workers, research shows, is health, dental and vision insurance. However, part-time workers, which make up a significant portion of overall store workers, often are not eligible for their company’s health plan, or are unable to afford the benefit even if they are eligible.
• Cooley recommends retailers offer access to telemedicine services, which offer workers access to board-certified physicians at a significantly lower cost. According to a recent study by PSC Technology Inc., 52% of hourly workers said they would take access to telemedicine over a 5% raise in pay.

Dive Insight:

Grocers have long struggled with high turnover of their part-time workers. Fueled by low wages, low company loyalty and the lure of better opportunities, the turnover rate for these employees is currently 48.9%, according to the 2017 Independent Grocers Financial Survey.

Chains like Walmart and Kroger have raised wages to stay competitive. But in a very price competitive market, retailers are having a hard time passing these increases along to their customers.

Still, higher wages have benefits that can pay off over the long run. The average cost of replacing a part-time employee, according to data from the Coca-Cola Retailing Research Council cited by Cooley, is $4,200. Grocers can avoid this cost and develop experienced workers at the same time. These seasoned employees have a very high value to a company due to their ability to execute, operate efficiently and offer great customer service.

Retailers can also promote employee loyalty through good management practices, team-building initiatives and other perks. Access to telemedicine, which Cooley recommends, is a benefit that more and more employers across industries are offering. The service gives employees access to board-certified physicians 24-hours a day, and supposedly at a fraction of the cost of full health insurance.

However, while the effectiveness of high-quality telemedicine has been lauded, its cost-saving benefits have come into question. A recent study by the Rand Corporation found that just 12% of telemedicine consultations replaced doctors’ visits, while the other 88% resulted in a doctor’s office visit or some other additional medical service. The study, which focused on patients with acute respiratory infections like sinus infections and bronchitis, found that annual spending actually increased $45 annually per patient.

Whether it’s telemedicine or some other perk or collection of benefits, grocers need to make sure they’re doing everything they can to retain good workers. If they don’t, they’ll pay the price in more ways than one.