In an industry where turnover rates regularly exceed 60% — 3x higher than that of other industries — retail employers face an ongoing struggle to build stable, engaged workforces. This statistic isn’t just a number — it represents a profound business challenge with real losses to the bottom line. At the recent LEAP HR Retail Conference, Canary’s founder and CEO, Rachel Schneider, shared insights on how formalizing emergency financial support into structured, equitable programs can transform ad hoc assistance into a powerful retention strategy, mitigating risk along the way. While many organizations, retailers included, already recognize the importance of helping employees navigate financial hardships, the difference between informal ‘pass the hat’ efforts and systematic, dignified support programs can dramatically impact both the employee experience and business outcomes.
The Link Between Retail Employee Financial Wellness and Retention
One reality has become increasingly clear amid conversations around improving the retail retention problem: It’s challenging, if not impossible, for employees to focus on career growth or deliver stellar customer service when they’re dealing with financial stress and uncertainty in their personal lives. The traditional approach to retention – focusing primarily on compensation, career advancement, and traditional benefits – often overlooks how this mindset directly impacts whether workers stay or go.
The Real Cost of Financial Instability
Consider how a seemingly manageable $500 car repair can cascade into a retention problem: An employee without emergency savings misses shifts while seeking repair options, leading to reduced income. This financial strain affects focus and customer interactions. Eventually, the worker may choose to leave for a marginal pay increase elsewhere, beginning a costly cycle of turnover that could have been prevented with timely financial support. In this case, it was a matter of just $500. While it may not seem like a lot, research shows that money timed just right is more important than the dollar amount given — money at the right time really can make all the difference.
The business costs extend well beyond the obvious expenses of recruiting and training replacements. Financial stress manifests in:
- Decreased productivity as employees manage financial concerns on the clock;
- Increased absenteeism when financial issues create barriers to showing up;
- Diminished customer experience when distracted employees can’t fully engage;
- Higher error rates from financially stressed workers.
For retailers, these hidden costs compound the already substantial price tag of turnover, estimated at 1.5-2x an employee’s annual salary when all factors are considered.
Why Traditional Solutions Fall Short
Employees’ financial instability is due to a combination of factors, ranging from unpredictable income and lack of savings to limited access to fair credit. Conventional approaches to employee support have proven incomplete in addressing this challenge. Raises, while critically important, are not keeping pace with inflation or providing the immediate relief needed during financial emergencies. Additionally, traditional benefits packages often focus on long-term security while overlooking acute, day-to-day financial needs. Even when employees have access to financial wellness education or support tools, many lack the practical means to build enough emergency savings or access fair credit when crises strike.
To be clear, a genuinely resilient workforce isn’t built on one solution alone. Emergency relief funds are critical, but they work best in conjunction with a broader suite of financial stability tools — like employer-sponsored savings programs, access to low-cost loans, and financial coaching, for example. A holistic portfolio approach ensures that employees can address immediate crises while also building toward long-term financial security.
This gap between what workers get today and what workers need has grown more apparent as economic pressures intensify. Rising housing costs, inflation, and increasingly frequent natural disasters have created an environment where financial shocks are both more common and more devastating.
The retail workers who power customer experiences simply cannot wait for point-in-time bonuses or increases when we know they are facing immediate financial emergencies. Without broad, accessible safety nets, workers make understandable choices to pursue even marginally better opportunities. Luckily, it’s never been easier for employers to be a trusted part of this safety net.
The Business Case for Retail Employee Financial Wellness Programs
Forward-thinking retailers know that emergency relief funds deliver measurable returns on investment. The math becomes compelling when comparing the full cost of turnover against the investment in financial stability programs. Take, for example, that the median grant size delivered to employees across all Canary programs in 2024 was only $750. Even relatively small amounts of money can make a real difference when someone needs enough to cover rent that week. Again, money at the right time really can make all the difference. Given the steep cost of replacing an employee who leaves due to financial stress, the impact of even relatively small, timely financial relief creates clear savings.
Companies that offer Canary’s emergency relief fund to their employees can easily see the validation behind this. Last year, grantee data showed us that:
- 92% of grantee survey respondents agree that the Grant Circle makes them feel better about working for their organization
- 75% of grantees indicated that the grant provided breathing room to figure out their next steps
- 52% of grantees reported that the grant was enough to cover their financial need
- Before receiving a grant, 18% of grantees reported being late or absent from work because of financial hardship
By working with a third-party to review and administer charitable grants, employers across industries have been able to reduce workers’ financial stress, provide meaningful relief, and reap the rewards of a happier, more engaged workforce. Retailers would be well served to similarly prioritize and invest in the immediate financial stability of their employees.
Implementation Strategies for Successful Financial Wellness Programs
For leaders looking to implement employee financial well-being programs focused on financial stability, a practical, staged approach have proven effective:
- Start with data: Measure the financial well-being of your workforce, particularly by analyzing turnover patterns to identify where financial instability may be a driving factor.
- Build the business case: Calculate your specific cost of one lost employee to demonstrate the potential ROI of helping bridge the gap for them instea.d
- Design for dignity: Ensure program accessibility doesn’t create stigma or unnecessary barriers. The key here is a promise to keep participation as anonymous as possible to the sponsoring organization.
- Communicate early, clearly, and often: Make sure employees know help is available (and how to access it) before they decide to leave.
Common objections about employee relief program costs can often be addressed by starting with pilot programs in high-turnover locations or departments. Concerns about setting precedents can be mitigated through clear, consistent eligibility guidelines that provide fair access while maintaining program sustainability.
The Future of Retail Employment
As the retail sector evolves, efforts to support financial stability represent more than just a retention tool – they signal a fundamental shift in how employers understand their relationship with workers. Leading retailers like Visionworks and Tandy Leather (through Canary), along with companies like Levi’s and Home Depot (through internal funds), are committed to approaches that recognize the connection between employee financial well-being and business performance.
While some companies run their own internal relief efforts, there are significant challenges to overcome. With a fully managed, nonprofit-backed relief fund, you can provide financial assistance to employees without setting up your own foundation, getting HR involved, or risking legal complications.
In today’s competitive labor market, retailers prioritizing their employees’ financial resilience are certain to gain advantages beyond mere cost savings. They build workforces characterized by greater loyalty, engagement, and customer focus. They establish employer brands that attract talent in tight markets. And they create more resilient organizations capable of weathering economic uncertainties.
The message to innovative leaders is clear: financial stability isn’t just an employee perk – it’s a business imperative for anyone committed to breaking the costly cycle of turnover and building a sustainable competitive advantage through their people. What steps will your organization take to ensure workers can weather financial storms and stay engaged for the long term?
Canary manages emergency relief funds that power emergency payments to individuals in crisis. Reach out to our team to learn more about how we’re helping retailers reduce turnover and strengthen workforce stability.
