Retailers Seek To Reduce Management Turnover With Compensation & Benefits
Furniture World Magazine
Findings from a recent survey of human resources executives at retail companies point to the industry’s accelerated efforts to reduce turnover in their store management ranks, according to Career Management, the retail executive recruiting firm which conducted the study. The survey covered a range of compensation and benefits issues for store managers across all retail channels, with the participating companies collectively operating over 12,000 locations throughout the United States.
“The industry’s moves to make store management positions more appealing was underscored by the fact that over 80% of the companies surveyed indicated that their managers now average under 50 hours per week,” noted Lloyd Lippman, CEO of Career Management and an adjunct professor of Retail Leadership Skills at the Fashion Institute of Technology in New York City. “Not too long ago, most managers we were placing typically worked at least 55 to 60 hours per week.”
More specifically, store managers at 27% of the companies surveyed worked up to 44 hours per week and 54% put in 45 to 50 hours. Managers at another 17% of the companies averaged 51 to 59 hours per week, while just 2% averaged 60 hours-plus.
The survey also found that store managers were eligible for performance bonuses at an overwhelming 92% of surveyed companies. Among those companies offering bonuses, 41% provided bonuses of up to 9.99% of the manager’s base salary, 35% were in the range of 10% to 19.9% of base salary, 16% were in the range of 20% to 29.9%, 4% were in the 30% to 39.9% range, and another 4% offered bonuses in excess of 40% of base pay.
Those bonuses were paid on top of salaries that, for the most part, averaged under $60,000. Measured across all store volume categories, nearly 60% of the responding chains reported that average salaries for store managers (excluding bonuses and other compensation) were less than $60,000, with 17% paying under $40,000, 31% in the $40,000 to $49,999 range, and 11% in the $50,000 to $59,999 range. Salaries averaged in the $60,000 to $69,999 range at another 17% of the companies, while 10% were in the $70,000 to $79,999 range, another 10% were in the $80,000 to $99,999 range, and 4% reported average base salaries in excess of $100,000.
Breaking the salaries down by chains’ average store volume:
In the under $1 million category: 60% of store managers earned under $40,000, 30% earned from $50,0000 - $59,999, and 10% earned from $60,000 to $69,999.
In the $1 million to $2.99 million category: 6% earned under $40,000, 69% earned from $40,000 to $49,999, 19% earned from $60,000 to $69,999, and 6% earned from $80,000 to $89,999.
In the $3 million to $5.99 million category: 12.5% earned under $40,000, 25% earned from $40,000 to $49,900, 37.5% earned from $50,000 to $59,999, 12.5% earned from $60,000 to $69,999, and 12.5% earned from $80,000 to $89,999.
In the $6.0 million to $9.99 million category: 11% earned under $40,000, 11% earned from $50,000 to $59,999, 45% earned from $60,000 to $69,999, 11% earned from $70,000 to $79,999, and 22% earned from $80,000 to $89,999.
In the $10.0 million-plus category: 11% earned from $50,000 to $59,999, 11% earned from $60,000 to $69,999, 45% earned from $70,000 to $79,999, 11% earned from $80,000 to $99,999, and 22% exceeded $100,000.
“Although our experience has shown that base salaries for store managers have been on the rise, one could still argue that compensation is not commensurate with leadership positions at other businesses generating the level of annual revenues produced by stores,” Lippman noted. “Retailers have sought to shake their longstanding reputation as ‘mediocre payers’ by offering considerable bonuses tied to store sales, profits, shrinkage and other metrics, along with a variety of other benefits.”
Indeed, responding companies provided liberal employee discount programs for store managers, with 29% offering discounts in excess of 40%, 27% giving discounts in the 30% to 39.9% range, 25% in the 20% to 29.9% range, and the smallest group, 19%, offering discounts up to 20%.
Moreover, a full 96% of the companies surveyed offer 401k plans for store managers. Among those providing plans, the largest group, 45%, will match employee contributions in excess of 3%, while 21% will match up to 1%, another 16% will match up to 2%, and 18% will match up to 3%.
In terms of health benefits, the survey found that the vast majority of companies require managers to contribute to their policy premiums. Excluding costs for additional family members, only 8% of the companies cover the full premium for their store managers, while 21% require a contribution of up to 9.9% of the premium cost, 27% were in the 10% to 19.9% range, another 27% were in the 20% to 29.9% range, 13% were in the 30% to 49.9% range, and just 4% required managers to pay , than 50% of their individual premium.
Addressing the issues of compensatory time off and vacations, the survey found that 38% of responding companies offer comp time to store managers who exceed their allotted hours for a week. The typical vacation policy for store managers at responding companies was two weeks after one year, three weeks after five years and four weeks after 10 years of service.
About Career Management: Founded in 1978, Career Management specializes in executive recruitment for all segments of the retail, catalog and e-commerce industries. With offices in East Brunswick, N.J. and New York City, the firm assists a wide variety of clients across the country, fulfilling talent needs at many levels, ranging from corporate senior management to field and store management. All associates at the firm have prior hands-on experience in the retail industry. For more information, visit, www.careers4retail.com