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[ FEATURE STORY]
The most important assets
Retailers have to know how to find, then retain, the best employees
by Maura Keller
The third person in four months just gave their notice. They said they are leaving for better pay, better hours, better benefits or better advancement opportunities. Does it feel like there is a revolving door at your company? Is your employee turnover leaving you feeling dizzy? Employee procurement and retention efforts are vital components of every business’ success and can dramatically affect your bottom line.
Hiring the Best
Recruiting and hiring the ideal employees goes hand-in-hand with employee retention.
“There is a renewed emphasis today on retention as retailers react to an increasing number of their employees walking,” said Roger Herman, CEO of The Herman Group. “Supporting this attention, the trend is heading toward better hiring, with a focus on screening to get the right people for the right jobs. More recruiting will be done through the Internet. And wise and shrewd retailers will work to build stability and continuity.”
According to Dr. Beverly Kaye, co-author of the Wall Street Journal business best-seller Love ‘Em or Lose ‘Em: Getting Good People to Stay and founder and CEO of Career Systems International, statistics indicate that we’re headed for a perfect storm.
“There is a confluence of several factors,” Kaye said. “The economy is healthier so there are more choices out there for people. We not only facing a healthier economy, but with 76 million baby boomers retiring at the end of the decade, we will have a drastic demographic shortfall. There simply aren’t enough Gen-Xers to fill the jobs being left open by the baby boomers. It’s going to leave us with a six million person-to-job shortfall by 2010, according to the U.S. Bureau of Labor Statistics.”
Furthermore, there is going to be a predicted skill shortage, meaning that people with specialized skills are going to be harder to come by.
In order to head off this predicted “perfect storm” owners and operators need to put a concerted effort in improving their procurement efforts.
“Successful procurement has focused on a more thorough interviewing and screening process,” said Tony Priftis, team leader in the retail search practice at Kaye/Bassman International. “An increasing number of retailers are adopting a behavioral-based interviewing strategy and methodology. This strategy involves a formalized set of questions that establish a pattern of past behaviors being indicative of future performance. The big picture benefit here is a more thorough screening process will produce a better hire, resulting in longer retention.”
Procurement strategies that continue to benefit the retailer include using technology tools such as kiosk locations within the store, where an applicant can apply online for a position.
“This strategy has helped to build an ever-ready database of applicants,” said Rawn Johnson, team leader in the retail search practice at Kaye/Bassman International. “The strategy that does not work is the ‘quick fix’; making a hire to fill a void, especially at the store level. More often than not, this ends up costing the retailer more in the long run.”
So, what characteristics should a potential “long-term” employee possess? According to Linda D. Henman, president of the Henman Performance Group, a proven record of achievement is a key attribute any potential employee should possess.
“In other words, look for evidence that he or she loves success,” Henman said. “Even if you’re hiring hourly high school workers for a convenience store, look for people who have played sports, belonged to clubs, etc. It shows that they love the feelings of accomplishment.”
The three things that Henman said are not negotiable for any job are:
- They must be smart enough to do the job, whatever that is. If it’s a management position, obviously they need to be more advanced than someone who will be doing other kinds of things.
- They need to like to achieve.
- They need to be honest.
“In retail, if the particular job involves interacting with the public, which most do, they should have good people skills. How did they impress the interviewer? That’s probably how they will impress customers, too,” Henman said.
Additional characteristics that aid in employee retention include stability of past work history and a goal-driven personality since a person who has goals is more likely to evaluate a career opportunity for its long-term potential.
“Work ethics, team player and the applicant who can demonstrate an ability to deal with adversity are all ‘big picture’ characteristics that retailers seek to help improve retention,” Johnson said.
An emerging trend that retailers continue to pursue, at the store level, is hiring the more mature, older candidate. The rationale is a perceived stronger work ethic, greater pride in providing customer service and integrity when it comes to handling the retailer’s money and merchandise.
By and large, retailers are looking for a higher-caliber candidate from both an education and experience standpoint in merchandising, marketing and people leadership roles at the corporate level.
Retaining the Best
While every industry is plagued with its own set of reasons and circumstances for employee turnover, the retail industry’s are evident: long hours, including nights, weekends and holidays, low to moderate pay, working with the public, and management’s challenging expectations of providing a high level of customer service.
As Herman pointed out, “uncontrolled employee turnover can cause serious hemorrhaging on the bottom line. Replacing a valued employee is expensive: recruiting, selecting, hiring, onboarding and training. To reduce these costs, employers must improve their retention. Retention is the No. 1 strategy for competitive employers today.”
Leigh Branham, author of The 7 Hidden Reasons Employees Leave: How to Recognize the Subtle Signs and Act Before It’s Too Late, said, “The most vulnerable time for losing an employee is during the first six months, so that’s when managers should be watching most closely.”
New hires may enter the company with unrealistic expectations and when they experience something that’s different from what they expected, they may feel buyer’s remorse, start questioning their decision, then disengage completely and start looking for another job.
Improved communication
“That’s perhaps one of the biggest reasons people leave,” Branham said. “There was a lack of communication or misinformation about what their job really entailed. When they get on board, they are faced with unexpected surprises in their role. To eliminate this, managers and owners need to communicate clearly with a potential hire and have the role well defined before they begin.”
Herman added that the front-line supervisor is most influential in determining how long an employee will be with a retailer.
“If the supervisor and employee have a good relationship, there is a greater chance the employee will stay,” Herman said. “Retention is a management issue, not a human resources issue.”
Henman agreed. “The single most important thing a company can do to keep talent is to train their managers,” she said. “People typically don’t leave jobs; they leave bosses. All other things being equal, a person will choose to work for the good boss, the person who has good coaching skills and good interpersonal skills. Fortunately, these can be taught and learned, but most companies don’t develop their bosses enough.”
There are telltale signs that an employee is dissatisfied with their position.
“The signs are not hard to read if an employer is paying attention,” Branham said. “It’s also important to periodically touch base with each of your employees and ask, ‘How are you feeling about things?’ or ‘Is the job and the company what you expected?’ Even ask about their sick child; showing you are aware of their situation and care enough to ask is important in the mind of the employee.”
Training and development
One tool that has proven to be a key retention component is training and development.
“Employees want to be taught what to do, how to do it, and most importantly, want to be able to grow intellectually and professionally,” Priftis said.
Therefore, the establishment of a well-defined training and development program will ensure associate retention.
Most important is inclusion. “When management adopts a culture and style of including all associates in the business and making them feel important, and soliciting their ideas and input, retention has increased exponentially,” Johnson said.
Turnover reports and exit interviews can tell an employer a lot about job satisfaction. “While these tend to be ‘after the fact,’ they can provide valuable information that can be used to course correct,” Priftis said.
Experts agree that a proactive approach to retention, when adapted, can be most beneficial.
“Programs like ‘coffee with the boss,’ where associates have the opportunity to sit with their supervisor and discuss problems, concerns, ideas have proved to affect retention in the long run,” Priftis said.
Also, recognition and reward programs do a lot to maintain morale and reduce turnover. Formal performance reviews, which provide both management and associate the opportunity to discuss problems and develop solutions, are very effective tools in reducing turnover.
“Retail and hospitality have some of the worst turnover problems because people often see the jobs as a temporary way to make money, not a career,” Henman said. “Those companies that offer coaching and advancement tend to keep the best people the longest. Some people neither want nor need to advance, but they want to take pride in their work. When bosses create a pipeline of responsibility, the best people respond favorably.”
Heed advice
Having good listening skills is not only paramount to retaining employees, but it is also key to having satisfied employees.
“Retailers need to take heed and not only listen to what employees tell them in the exit interview, but do something about it,” Johnson said.
Think outside the box and come up with a creative way of providing first-class customer service, along with accomplishing all the merchandise and floor upkeep tasks. Listen to what your associates are telling you; after all, they are the ones that are in the trenches every day.
In fact, Kaye said that current trend studies are reporting the highest degree of dissatisfaction among employees that we have ever seen.
“In every survey, workers are saying, ‘I am not putting my whole discretionary effort into the job. I’m holding back either because I’m not happy where I am working or I’m not treated well.’ This indicates that employers need to make a concerted effort in retention.”
Herman said that the most effective methods for evaluating employee job satisfaction are ongoing one-on-one communication and employee surveys.
“We recommend that surveys be conducted at least annually, and semi-annual is better,” he said. “Employees can respond efficiently online, so taking the pulse is easy to do.”
Provide challenges
One of the biggest mistakes bosses in retail make is to micro-manage.
“Instead of giving their direct reports projects and clearly defined areas of responsibility, they give them pieces of the project,” Henman explained. “When people don’t have decision-making authority, they tend not to take their jobs seriously.”
For instance, the Ritz Carlton gives each employee the authority to make guests happy, even if that involves hundreds of dollars. Their turnover is one of the lowest in the hospitality industry.
“Research tells us that people have three basic needs: inclusion, control and affection,” Henman said. “If bosses make employees feel like part of the company, give them appropriate control over decisions that affect their area of responsibility and show that they care about each person, their turnover is likely to go down.”
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