Our last blog post focused around the need to re-evaluate store level incentives. In one of our latest Points of View, “Store Labor and Role Transformation,” we also touch on elements of incentives, compensation and measurements. This interesting topic has received a good amount of attention, and I’m curious to explore the nature and caliber of retail store employees a bit more.
When discussing incentives, the need to reevaluate stems from different pressures: changing business models, increased competition, new legislation and the desire to fill new store level roles with “high quality talent.”
What does that mean?
Let me explain. When I was in business school I worked for a small chain of restaurants, where I was involved pretty closely with the store staff and management. While there was a definite difference in their qualifications (e.g., education level or industry experience), there was often a bigger distinction in the quality of the workers:
• Did they take pride in their job or was it just a paycheck?
• Did they take a vested interest in the success of the store?
• Did they find new and better ways of performing their tasks?
• Did they genuinely care about the customers and their fellow workers?
• Did they take training and development seriously or did they “just get it over with?”
• Did they consistently show up on time, ready for work and with a good attitude?
Answers to these questions have a direct correlation to the value an employee has to the company. All the education and years of experience have limited value if the employee does not genuinely care about the job or the company. I actually based my final graduate school project on exploring the need to recruit high quality employees and paying them more vs. just filling slots on a timesheet. I hypothesized that if a company could find one high quality employee, they could pay them 150% more than the “average” employee, and the company would receive 200% or more in productivity or value and not have to hire two employees. I still think this is true. Maybe the numbers aren’t exact, but you get the idea: more value at a lower cost.
Costco is a great example – and one of my favorite retailers. I have never had a bad experience in any Costco stores – despite the fact that it’s a non-thrill warehouse environment, has concrete floors, is packed with other shoppers on weekends (my only free time to go), and I just can’t escape the “ugly” lights (fluorescents). However, they pay their employees well and have one of the retail industry’s top benefits packages. I have never seen any of their employees in a bad mood, unable or unwilling to help or uninterested in their job. The success of the company underpins their employee strategy. If you’re interested, read more at: Why Employees Love Working for Costco.
It makes a difference.
I did marketing for another chain of stores some years ago, and they used an advanced screening test to ensure new hires “fit” the personalities they desired for their very customer-focused, high-paced, high-quality environment. Their training program and opportunities to advance in the company were clear, and the company was able to foster a very intimate, team-building environment. They also provided above-average wages and benefits packages, despite many part-time staff. We all really cared about how well the company did and about each other, and it was evident.
Wegmans and Whole Foods are two more excellent examples of attracting and retaining high quality workers and the resulting higher productivity and enhanced customer experience. These two retailers consistently appear on Fortune’s annual ranking of 100 Best Companies to Work For, and both deliver an exceptionally high quality customer experience. Parker Avery also touched on the need to focus on store level employees a few weeks ago in “The Missing Ingredient…Employees.”
While education and years of experience are great to have on a resume, I would venture to guess that any hiring manager would take a high quality worker over a “slacker” with a graduate degree any day of the week. But how to attract and keep these high quality workers? It takes a holistic view of what employees’ needs and expectations are vs. what the company perceives them to be or what the company has traditionally offered. Along with things like competitive wages, benefits for part-time staff and schedule flexibility, it takes:
• Clear expectations of success, both for the company and the role
• Giving staff a reason to care about their performance (outside of compensation)
• Open and non-judgmental communication with management
• Clear growth / career advancement opportunities
• Company respect for staff
• Employee empowerment and feeling they are making a difference
The Parker Avery Group is about to embark on the first of our 2014 research studies, where we are seeking to take a deeper dive into the changing roles within retail stores. Along with impacts due to channel integration and increased focus on customer experience, one area we will explore is how retailers are changing the way they recruit, hire and retain employees to address the need for high-quality talent.
We will be soliciting feedback from retailers who are involved in these strategic human resource and operational decisions. If you are a retailer who is interested in being part of this study, please contact tricia[dot]garrett[at]parkeravery[dot]com
– Tricia Garrett