The revolving door factor: Budtender turnover in the cannabis industry
January 17, 2020
Share this post
This report uses Headset sales data for individual employees to look at the state of turnover in the cannabis industry. It examines everything from turnover rates at the typical store to seasonal employment trends. This report will be useful for any retailer looking to gain a better understanding of what’s going on with arguably their most important employees, the budtenders.
Budtenders are the core of any retail business, being the most customer-focused employees. Though they might technically be the lowest people on the totem pole, smart cannabis business owners know that they’re really the foundation. Thus, keeping them around is key.
For this report, we’ve looked at our data to see when employees started showing sales (got hired) or stopped showing sales (left the company). This allows us to see turnover from all sides—when it’s happening, who’s turning over, and perhaps even why!
For example, turnover spikes after summer, traditionally the busiest season. It’s also not surprising to learn that budtenders who sell more stay longer. Success is invigorating, right? That said, turnover is still very common. The vast majority of stores see a high rate of turnover, with much of that happening before their new hires even have time to settle in.
Clearly, there are some takeaways to be had. This report is for anyone out there who’s charged with the tough, tough task of hiring. We hope these insights will help you attract and retain the very best!
Data for this report comes from real-time sales reporting by participating Washington State and Colorado cannabis retailers via their point-of-sale systems, which are linked up with Headset’s business analytics software. This report is based on data collected in the states of Washington and Colorado over the past year, over a 12-month period. That data is cross-referenced with our catalog of over 275,000 products to provide detailed information on market trends.
Headset’s data is very reliable, as it comes digitally direct from our partner retailers. However, the potential does exist for misreporting in the instance of duplicates, incorrectly classified products, inaccurate entry of products into point-of-sale systems, or even simple human error at the point of purchase. Thus, there is a slight margin of error to consider.
State by state
Washington State and Colorado have very different turnover profiles. Among employees reporting sales in the past year, Colorado has a much higher rate of turnover. In Washington, 47% of employees stayed, while only 38% did in Colorado. In Colorado, 44% of all employees were new and left in the same year. Colorado also shows a greater turnover among longer term employees. The number of employees with sales in the year prior in Colorado was 33%, but only 15% of those employees were still around in the current year. Compare that to Washington, with 44% and 24%, respectively.
We should note that, while burnout will definitely increase turnover, this doesn’t mean that Colorado employees are unhappier on average. Colorado has a much larger retail sector than Washington, where the number of stores is restricted, so it’s also possible that budtenders are moving around because they’ve got more opportunities.
A Lot of Flashes in the Pan
Among all employees who stopped reporting sales, 58% of them didn’t make it two months, and 40% didn’t make it even one. Only 14% of all employees who quit had been at their position for longer than three months. Clearly, onboarding and training are crucial. Employees who are not only made to feel welcome right away but given the tools to excel in that crucial two month period are employees who will stay
Tis the Season
For staffing shortages, that is. Typically, monthly turnover in both states is less than 8% of employees. In both states, turnover spiked august. It spiked again in Washington in October and in Colorado in December. An end of summer slump makes sense as a general trend, given that bud tending is still cool enough to be an attractive summer gig for college kids. The later slumps might be older folks who are seeing fewer tips as the weather gets less appealing to the outdoor smoking crowd. As for Colorado’s December slump, well, would you want to stick around for the Christmas rush when you’re surrounded by some of the world’s best ski slopes? We wouldn’t either!
A Few Stores Have the Secret
Most stores suffer from a relatively high rate of turnover, with a select few seeing almost none at all. The average store saw about 30% of its workforce turnover in a year, while 5% of stores in both states saw less than 10% leave. Interestingly, Colorado has more than double the number of stores with 10-20% turnover than Washington, and Washington has way more stores with over 50% turnover. So, despite Washington’s overall better retention numbers, the majority of stores in the state aren’t doing so hot.
High Performers Stick Around
This should surprise no one, but the highest performing budtenders have the highest retention rates. Obviously, it feels good to be good at what you do, but they’re probably also making a killing in tips! It’s easy to forget that bud tending is a tipped industry, so there’s an element of revenue sharing going on for high performers. However, it’s clear that helping all your budtenders do the best they can is good for not just them but also your business.
How Does Turnover Affect Growth?
Turnover being bad for business is a time-honored truth, and one that we definitely think applies to the cannabis industry. However, it’s worth noting that very high-growth stores (40%) have pretty high turnover rates. It’s not hard to see how burnout could play a role there. Stores between 20-40% growth have a much more stable workforce, with lots of “mid-term” employees (60-120 days) and almost no short timers (0-60 days). This data suggests that, while it might not matter how many people you go through if you’re churning and expanding tan insane pace, it seems like the people who are growing a little slower and steadier do benefit from low turnover.
Turnover is no one’s friend, but it is a constant. Not all departures are unhappy ones, of course, but they do represent a cost to any business. And as evidenced by those stats on how many budtenders bounce after a mere two months, the hiring process is tough.
However, it seems like there’s a lot that employers can do to keep their employees around. Using sales data to pick out when there might be slumps and then incentivizing employees to stick it out past them is one way. If you subscribe to Headset Retailer, for example, and you notice that your January sales numbers for the past three years are low, you could relax the reins on your staff. Or maybe just be extra nice? Either way, there are plenty of ways to get people to stay
The one that is probably the most obvious here is performance. Setting people up to sell well is probably the biggest win-win in any retail environment, and these numbers confirm that. And beyond just creating high performers, treating the ones you have well is also super important. If turnover is lowest among high performers, it follows that people who have been around longer tend to be better at their jobs.
By extension, the high rate of early-hire turnover isn’t terribly surprising either. This might just be the industry weeding out those who aren’t right for it. Bud tending is an amazing job, of course, but it’s not all sampling product and shooting the breeze. Good budtenders go out of their way to engage each customer, guiding them to the products and experiences that will keep them coming back. We hope this report helps you guide them and hang on to them!
Headset is market data and business intelligence for the cannabis industry. Our extensive Industry Report deep-dives into specific brands to help businesses better monitor the competitive landscape and perform exhaustive category analysis. Reports are generated via aggregate, real-time transaction data to get a unique and thorough analysis of what’s happening in the cannabis industry as the data becomes available. Headset offers three distinct products that help retailers, dispensaries, brands, product manufacturers, distributors, and investors move ahead in the industry