Financial Wellness in High-Turnover Industries: A Game-Changer for Retention

Walking into a retail store or restaurant today, you’ll likely see new faces—too many, in fact. High employee turnover has long been accepted as the norm in industries like retail and food service, with U.S. retail turnover averaging a staggering 60% according to the Bureau of Labor Statistics. But what if it didn’t have to be this way?

Forward-thinking businesses are rewriting the playbook, proving that investing in employees’ financial wellness is the key to improving retention, boosting productivity, and strengthening workplace culture.

The Real Cost of High Turnover

Replacing a single low-wage worker costs about 16% of their annual salary, according to research by American Progress. For a retail employee earning a median salary of $30,600, that’s an estimated $4,896 per turnover event—just in recruiting and hiring expenses. The costs escalate when factoring in lost sales, retraining efforts, and the impact on team morale and customer experience.

But the financial toll is only part of the equation. A report by Claro Money’s Wellbeing Division found that 73% of retail workers feel negatively about their finances. The consequences of financial stress ripple through the workplace:

• 57% experience reduced productivity
• 16% take more sick days
• 24% actively seek higher-paying jobs
• 43% report stress or poor mental health within a six-month period

Employers can’t afford to ignore these numbers. When employees struggle financially, businesses struggle operationally.

Why Emergency Savings is a Game-Changer

Financial stability isn’t just about long-term retirement goals—it’s about managing day-to-day expenses and unexpected emergencies. In 2023, nearly half of U.S. consumers faced an unexpected emergency within three months, with average costs soaring to $1,700. These weren’t luxury expenses but essential costs like car repairs ($1,300 on average) and medical bills ($1,500 on average).

For employees living paycheck to paycheck, these expenses can be devastating. And when workers lack financial security, turnover skyrockets.

Case Studies: How Emergency Savings Programs Reduce Turnover

Companies that offer employer-sponsored emergency savings programs are seeing real, measurable results. Here’s what happened when two organizations made financial wellness a priority:

• A 726-employee nonprofit implemented a workplace emergency savings program. Employees who participated had a turnover rate of just 6.64%, compared to 11.26% for nonparticipants. That 33% improvement saved the organization over $150,000 in turnover-related costs, delivering a 3.75x return on investment.
• A quick-service restaurant chain bucked the industry trend. While Chipotle reported a jaw-dropping 183% turnover rate, this company saw a dramatic shift after introducing an emergency savings program. Participants had a 28% turnover rate—far lower than the 79% rate among nonparticipants. The company retained nearly three-quarters of its workforce in an industry where losing and replacing staff multiple times a year is considered standard.

The benefits extend beyond just retention. Among participants:

• 92% save more than they withdraw
• 82% increase their contributions over time

A financial safety net creates a positive cycle—employees feel more secure, perform better, and stay longer.

Why Emergency Savings Outperforms Traditional Benefits

Traditional workplace benefits like 401(k)s were designed for long-term financial health, but they don’t address the immediate financial stress employees face. According to the Aspen Institute Financial Security Program, workers with access to employer-sponsored emergency savings:

• Are more resilient to financial shocks
• Experience lower financial stress, improving mental health and job performance
• Build stronger loyalty to their employer
• Are less likely to seek new jobs for small pay increases

Additionally, employees with emergency savings are far less likely to take loans from their retirement accounts, reducing the risk of long-term financial setbacks.

How to Build a High-Impact Emergency Savings Program

The best financial wellness programs go beyond offering an account—they integrate smart strategies to drive engagement. Here’s what works:

1. Make It Easy

• Simplify enrollment
• Automate savings through payroll deductions

2. Offer Incentives

• Provide matching contributions or sign-up bonuses
• Employer matches can significantly increase participation

3. Prioritize Education and Communication

• Regularly share success stories and financial education
• Employees need to see how emergency savings fits into their financial future

4. Provide Personalized Support

• Offer access to financial coaching
• 36% of retail workers express interest in one-on-one financial guidance

5. Leverage Technology

• Use modern platforms that provide real-time tracking and easy fund access

The Bottom-Line Impact for Employers

Businesses that prioritize financial wellness through emergency savings programs see benefits that extend beyond turnover reduction:

• Higher employee productivity
• Lower absenteeism
• Stronger employee satisfaction scores
• Improved ability to attract top talent
• Better team morale and workplace culture

These programs also create long-term financial security. Employees who build emergency savings are less likely to withdraw from retirement accounts, reducing administrative costs for employers and ensuring more employees retire with savings intact.

The Future of Employee Financial Wellness

With financial stress on the rise and only 15% of retail workers currently receiving financial wellness benefits—despite 75% wanting more support—there’s a massive opportunity for companies to lead the way.

Reducing turnover isn’t about increasing wages alone. It’s about addressing the root cause of instability: financial insecurity. By making emergency savings a standard benefit, employers can transform workplace culture, strengthen employee loyalty, and achieve long-term business success.

High turnover doesn’t have to be the cost of doing business. The solution is clear: invest in your employees’ financial well-being, and they’ll invest in your company’s future.