How to Reduce Employee Turnover

A.W. Naves
May 23, 2024

Employee turnover is an important issue in any industry, but it poses unique challenges in the rapidly growing cannabis sector. High turnover rates can disrupt operations, increase costs, and negatively impact company culture. Understanding the main factors contributing to high turnover and implementing effective retention strategies is essential for business success.

What is the Current Turnover Rate in the Cannabis Industry?

Recent data shows that the average turnover rate for the cannabis industry is approximately 55% for budtenders in both the U.S. and Canada over a 12 month period​​. This high turnover rate is concerning, as it affects business stability, customer service quality, and overall profitability.

A graphic on the left indicates the average employee turnover by country and a budtender on the right.

What Causes High Employee Turnover in the Cannabis Industry?

High turnover in the cannabis industry is driven by several unique challenges:

  • Regulatory Changes and Job Insecurity: The cannabis industry is subject to frequent regulatory changes, creating uncertainty and job insecurity for employees. The constant fluctuations can discourage long-term employment commitments.
  • Competitive Job Markets: With the rapid growth of the cannabis industry, employees, particularly budtenders, have numerous job opportunities and may frequently switch employers.
  • Work Environment and Management Practices: Poor management practices and lack of career advancement opportunities are significant factors. Employees often leave because they do not feel supported or see a clear path for growth.
  • Training and Development: Many cannabis employees report a lack of formal training, especially concerning product knowledge and customer service. This type of insufficient training can leave employees feeling that their jobs are more difficult and less rewarding, leading to dissatisfaction and turnover.

How Does the Cannabis Industry's Turnover Rate Compare with Other Industries?

The cannabis industry turnover rate of 55% for budtenders is comparably lower than what we've seen in other frontline industries. On average, the turnover rates for frontline retail and restaurant workers hover around 60% and 72%, respectively. However, in comparison to the overall US turnover rates across all industries, which is 47.2%, the budtender turnover rate is relatively high. Looking at the numbers, it's clear that customer-facing jobs generally tend to have higher turnover rates than the nationwide average.

How Can Effective Onboarding Reduce Turnover?

A structured onboarding process can significantly impact employee retention, job satisfaction, and productivity. Here are some key strategies and elements of successful onboarding:

  • Pre-boarding: Start the onboarding process before the employee's official start date by sending a welcome email that includes access to company resources and introductions to relevant members of your team.
  • Orientation: On the first day, offer a comprehensive orientation that includes a tour of the workplace, introductions to the team, and an overview of company values and policies. This helps new employees understand the organizational culture and their role within it.
  • Clear Goals and Expectations: Establish clear, attainable goals and define success metrics for new hires. This clarity helps employees understand their responsibilities and track their progress, increasing their confidence and likelihood of staying with the company​.
  • Training Programs: Develop a thorough training program that covers job-specific skills, company systems, and compliance requirements. Continued training and development opportunities keep employees engaged and invested in their careers with your company​.
  • Regular Check-ins: Schedule regular check-in meetings to provide feedback, discuss progress, and address any concerns. These sessions help build a supportive relationship between the employee and their manager, which is crucial for long-term retention.
  • Mentorship: Assigning a mentor to new hires can provide additional support and guidance, helping them acclimate more quickly and feel connected to the team​.

For detailed onboarding solutions, consider Kaya Push’s comprehensive onboarding tools.

A budender standing on the left and a graphic that shows turnover rates by Canadian provinces within 12 months of hire.

What Role Does Company Culture Play in Employee Retention?

Company culture plays a critical role in employee retention, especially in the cannabis industry. A positive and engaging company culture can significantly reduce turnover rates. Here are some key aspects of company culture that impact employee retention:

  • Clear Values and Mission: A company culture that clearly communicates its values and mission helps employees feel aligned with the organization's goals.
  • Employee Recognition and Rewards: Recognizing and rewarding employees for their hard work and achievements boosts morale and loyalty.
  • Work-Life Balance: Promoting a healthy work-life balance is essential for retaining employees. Flexible working hours, remote work options, and understanding personal commitments can make a significant difference in employee satisfaction and retention​.
  • Strong Leadership: Effective leadership that supports and listens to employees can create a positive work environment. Leaders who are approachable and provide regular feedback can enhance job satisfaction and reduce turnover​.
  • Team Building and Social Events: Organizing team-building activities and social events helps build strong interpersonal relationships among employees.
  • Professional Growth Opportunities: Providing opportunities for professional growth and development is crucial for employee retention. Training programs, career development plans, and mentorship opportunities can help employees see a future within the company that will keep them on your payroll.

Successful company culture initiatives can include regular team outings or social events; an employee wellness program that promotes positive physical and mental health; and open lines of communication between management and lower-level employees who want to be heard when they have suggestions or concerns.

How Can Competitive Compensation and Benefits Help Retain Employees?

Competitive compensation and benefits play a crucial role in attracting and retaining top talent. Given the cannabis industry's rapid growth and the increasing demand for skilled workers, offering attractive pay packages and benefits has become essential.

A budtender is smiling behind the counter, ready to serve customers.

Competitive Salaries

Salaries in the cannabis industry have been rising to keep pace with the demand for qualified professionals. For example, senior management roles, such as CEOs and CFOs, can command significant salaries, often ranging between $100,000 and $250,000 annually. Additionally, salaries for lower-level positions, such as budtenders, should also be competitive to be in line with retail salaries, if not higher, to attract and retain top talent. 

Benefits Packages

Benefits packages often include health insurance, retirement plans, and other perks like equity and bonuses. Offering such benefits helps companies differentiate themselves in a crowded job market and makes them more attractive to potential employees.

Equity and Bonuses

Many cannabis companies are also incorporating equity and bonus components into their compensation packages. This not only provides immediate financial rewards but also aligns employees' interests with the company's long-term success.

What Training and Development Opportunities Can Decrease Turnover?

Effective training programs not only equip employees with the necessary technical skills but also show them that the company is invested in their professional growth. This investment can lead to increased job satisfaction and loyalty. In the cannabis industry, specialized training programs are particularly important due to the complex nature of the products and the stringent regulatory requirements. Here are some types of training that can help you retain employees long-term:

  • Compliance Training: Given the regulatory landscape, compliance training is essential. This includes understanding state and federal laws, safety protocols, and proper handling of cannabis products​.
  • Technical Skills Development: Programs like the Green Flower Institute’s Ganjier certification offer rigorous training for retail, manufacturing, and cultivation roles. These programs, inspired by sommelier certifications, cover a wide range of skills from plant anatomy to health and safety, helping to standardize training across the industry​.
  • Soft Skills Training: Customer service and communication training can help improve customer satisfaction and build stronger customer relationships.
  • Career Development: Providing opportunities for career advancement through ongoing education and development programs can help retain employees.

All of these training opportunities serve to reduce the learning curve for new hires, promote employee morale, reduce employee errors, and create a sense of belonging within the company. These types of employee learning will help address high turnover rates and maintain a satisfied workforce. This investment in employees not only benefits the people you employ but also contributes to the overall success and growth of your business.

Three budtenders attending a training session at a dispensary.

Final Thoughts on Reducing Employee Turnover in the Cannabis Industry

In summary, reducing employee turnover in the cannabis industry requires a multifaceted approach. By implementing structured onboarding, fostering a strong company culture, offering competitive compensation, and providing continuous training opportunities, businesses can improve employee retention and achieve long-term success.

KayaPush’s comprehensive HR solutions can also help your business improve employee retention and thrive in the competitive cannabis industry. Book a demo with us to experience the power of strain free HR. 

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May 2024


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