Sports Direct’s staff turnover three times UK average
Staff turnover at Sports Direct rose by over 3 points to 22% among salaried staff last year, according to the company’s annual report, almost three times the UK average. Sports Direct has recently been criticised for its treatment of staff by the UK parliament. Negative coverage has seen the company’s share price experience losses of 60% within the last year. Next month, shareholders at the group’s AGM will vote on proposals for an independent review of the treatment of Sports Direct’s employees.

Sports Direct, which parliament has criticised for treating its lowest-paid workers “without dignity or respect”, also appears to be struggling to convince its white collar employees that it is a good place to work.

Turnover among the embattled retailer’s salaried UK staff, which includes those employed at its headquarters and managers in its stores, rose by more than three percentage points last year, to 22%, according to its annual report.

The figure is almost three times the average turnover rate of 8% for UK employers, according to a survey last year by the Chartered Institute of Personnel and Development.

In its annual report, the sportswear chain states: “Store manager stability with Sports Direct is currently sitting at 80.4%, this is a decrease of 12 [percentage points] on the [2015 full year] figure. Assistant manager and footwear manager stability currently sit at 79.8% and 83.5% respectively, which is a decrease of six [percentage points] and seven [percentage points] across the positions.”



The rising staff turnover rate will add to the pressure on Mike Ashley, Sports Direct’s billionaire founder and majority shareholder.



Jane Chesters, a partner at human resources consultancy Orion Partners said: “Zero churn among staff is not a good thing, but 20% within management roles would be a challenge to an organisation.

“When it comes to store manager roles, the productivity of a store can be as much to do with the calibre of the store manager as the location or the product. If you get high turnover [in those roles] it can have a significant commercial impact.”The company’s share price has shed more than 60% over the past year following scandals about its treatment of low-paid workers and concerns over its trading performance. It has also been operating without a full-time finance director since December 2013.

A scathing parliamentary inquiry found last month that Ashley had been running Sports Direct in a manner “closer to that of a Victorian workhouse than that of a modern, reputable high street retailer”, building his success on a business model that treated workers “without dignity or respect”.

The report by the business, innovation and skills (BIS) select committee, which was triggered by a Guardian investigation last year, said Ashley had used “appalling working practices” and treated his “workers as commodities rather than as human beings”.

Ashley gave evidence to the committee in June, when he said the retailer had grown too large for him to manage. He also admitted the company had broken the law by failing to pay staff the national minimum wage.

His admission confirmed the findings of undercover Guardian reporters, who revealed that the company was paying staff less than the legal minimum wage. HM Revenue & Customs is now investigating Sports Direct for breaching the wage law.

The company responded to last year’s reports by announcing an internal review of its working practices to be led by Ashley, plus a pay rise for staff, which it said would cost it £10m. The moves have failed, however, to quell negative headlines.

At the group’s AGM next month, shareholders will vote on a resolution calling for an independent review of its treatment of employees. The resolution brought by the Unite trade union calls on the board to commission an investigation to report back within six months.

Sports Direct did not respond to a request for comment. Its annual report states: “We estimate that [the staff turnover] figure will reduce during the remaining 2011 share scheme vesting period.

“Our share schemes are utilised to attract, motivate and incentivise our people and potential future employees. We have found that creating a shared goal has improved employee satisfaction levels.”

In the summer of 2015, the group handed 2,000 managers and other permanent staff share bonuses worth almost £155m in total and an average of £77,000, as part of a four year performance scheme started by Sports Direct in 2011.

The payout was triggered when the group beat targets for increasing its top-line operating profit every year for four years. However, targets on a new 2015 share scheme have been missed, meaning it has failed to pay out and has now lapsed.