Employee Engagement & Retention

Each year we survey our employees to measure their level of engagement. Available to every employee, the survey is completed anonymously and covers several topics, including the co-op's benefits package, operational and leadership effectiveness, and communications.

For REI, "engaged" employees are those who are satisfied with their jobs, committed to their work, loyal to REI and eager to help shape our successes. Engaged employees contribute to our strong culture and values, and they demonstrate pride and enthusiasm in their work, which results in an inspiring workplace.

Highlights

In 2008, 84 percent of employees responded by providing valuable feedback, including the following key findings that build our overall engagement score of 86 percent:

The independent firm that conducted our 2008 employee survey, Towers Perrin/ISR, also provided comparison results from our business peers. The average employee engagement level in the U.S. retail industry was 78 percent favorable, while "global high performing companies" had an 82 percent favorable rating. "Global high performing companies" have above-industry-averages on return on invested capital (ROIC), net profit, and employee engagement scores.

In 2008, REI's employee turnover rate was 34 percent, well below the retail industry rate of 62 percent. We credit our low turnover to the many attributes of our unique workplace, including an environment where employees see their contributions supporting our core purpose, our culture and our comprehensive benefits package. REI's turnover rate has declined steadily over the past five years, and was at its lowest in 11 years in 2008.

We measure retention by calculating the percentage of new hires from a particular year that are still employed at year-end. Our annual turnover percentage rate is measured by dividing terminations (voluntary and involuntary) in a particular year by average headcount across all months of that year.

Challenges

In mid- to late-2008, with the soft economy affecting many retailers, we closely monitored our business to ensure that we completed the fiscal year in a profitable position. This put additional stress on teams across our business as they focused on serving our members, customers and communities while maintaining expense targets.

In 2008, REI retained a new firm to conduct our company-wide employee engagement survey. When we began this new vendor relationship we took the opportunity to make enhancements in the anonymous survey that will give us added insights from employees. As a result, the new format makes it difficult to conduct a direct "apples to apples" comparison between 2008, 2007 and previous years.

Looking Ahead

REI is committed to increasing employee engagement levels within the co-op and ensuring that employees at all levels recognize their individual contributions support REI's continued success. We will continue to measure success in employee engagement through the survey process, and will take the steps necessary to keep our employees involved and supported by responding to the survey findings.