The biggest challenge in every business, and I really think this is more of a challenge even than finding good people, is once you get them, how to you keep them?
Some people come to me and say, "I have 100 percent turnover." Well, they don't. They just have 30 percent turning over three times. If they had 100 people, they still have the same 70 they had before. They've just hired for these 30 positions three times. And that's pretty common.
We've always said that 100 percent of the turnover in most retail environments is among the 30 percent of the people who keep churning. Of the group that turns over a lot, we typically find there are three reasons they don't stay:
1. Their own profile of what they were looking for and what the job had to offer (in terms of their vantage point) was not met. In most cases this is number one.
2. They were seeking an opportunity and it was not there. That is, they wanted more than just a job.
3. They are good producers, and whatever they were getting was not equal to whatever they perceived they were worth-a compensation problem.
I started looking at turnover in the grocery industry and was overwhelmed. Typically, this turnover can be attributed to one of two things: a) the kind of position they're recruiting for (part-time, flex schedule, or minimum wage; and b) the fact that they don't enhance that position at all.
Or it can be a case of having to hire fast, another common problem. It's well known in the business that if you hire when you have to, you're hiring out of urgency. And because of that, you're probably making poor decisions.
In other words, you need an ongoing recruiting program, 24/7. Recruiting is a full-time job. And second, make sure that even if you don't have an immediate position for somebody you consider a good candidate, keep in touch with them. That's critical.
recruiting is a full-time job;
if you're recruiting when you have a position open, you're hiring out of urgency, which tends to drive up your turnover levels; and
if you hire out of urgency, you probably are not devoting the time it takes to effectively orient new hires into the business.
Retention is staged
We believe that retention is a staging process. For example, if retention numbers are going to improve, you have to break down the retaining cycle into 90 days, the first 6 months, the first year, and then three years. Those are the staging points in retention-and also tend to be the turnover points.
The majority of people will turn over in the first 90 days, so what can you do to ensure that certain things happen in those three months that will reduce the turnover rate?
The most important thing in those first 90 days is orientation and training-not to the corporation, but to a person's specific function. The quicker you get a person comfortable and confident in the role they need to play-the one they're hired for-the better chance you have of retaining them.
If you spend the first 90 days teaching them what the company is all about, rather than what their job is all about, turnover tends to rise. I've seen many sophisticated programs that spend 90 days trying to teach a person everything about the company, the product, the market. They miss the most important point, which is to create a functional capability that the new person becomes comfortable with relative to the stress and challenges of their position.
If I have a counter person, and I don't immediately teach her how to effectively deal with upset customers, or to plan to get through high traffic times at the counter, my turnover will be astronomical. That's because I'm missing what I call the "stress points." Let's say I'm hiring a person to answer the phone. He probably needs to learn a great answer to only five questions. But I'm trying to teach him everything about the 160,000 SKUs we have on the shelves, rather than the five questions everybody will ask when they call. This is significant in the orientation program for the first 90 days and dramatically affects whether they get through that first staging point or not.
Attitude and feedback
We've always said that if you're not feeling good, or somebody's not telling you that you're doing well at what you're doing, that contributes to turnover. That Tom Peters management-by-walking around pat on the back ("I really like the way you did this") is a huge part of why people stay. That kind of attention is a huge factor during this critical period.
So is doing what you said you would do during the hiring process. If you tell them this is the way it is, then that's the way it is. Because people hope that when they hire on for a job, the promise is experienced. In other words, what you say is what you do. That builds trust. If you say you're going to put them in an orientation program that will start next Monday, and they don't start for a week and a half, you're building a foundation of turnover. "Promise and deliver."
Another thing we've found that's critical in retention in the first 90 days is the "buddy system." Pair new hires with somebody who appears to be of like kind (not a manager) and is in a leadership position. We call them senior associates: people who have been there at least a year and proven themselves through taking on tasks that were not compensation-driven. For example, they got together with a bunch of employees and put on a Halloween party, or they designed a special event in the store, or planned the company picnic.
These are what we call "leadership windows." It's how we test employees, by giving them an opportunity to volunteer for tasks like that and watch their leadership role in them. Those kinds of people are matched with a new employee so the new hire has a co-employee with this type of attitude about the company-which becomes very significant in terms of managing the new employee's attitude. What typically happens is that buddy system will happen anyway, but the employee will pick the person if you don't. And they'll find a co-worker who agrees with every lousy experience they have, who reinforces their idea that maybe this isn't a good match, rather than the positive expectancy that comes from these senior associates.
Another valuable component during the first 90 days is weekly feedback. A spark becomes a fire that becomes devastating when what could have been handled isn't handled and becomes a problem.
We have found weekly one-on-ones for at least 15 or 20 minutes, talking about three things, to be helpful with retention:
1. A performance standard-not a job description. In other words, what was expected that week and how did they do?
2. What questions do they have about things, anything, openly?
3. What's going to happen the next week?
We have seen significant change in attitude among people who find out that they're really in a 90-day orientation program earning the right to be a member of the team. They're more diligent, more committed, seek to have their questions answered, and approach the one-week reviews differently because they know that this is building.
All activities of an employee-typically in a front-line position within some kind of franchise unit-entail a certain number of functions they need to learn. If they don't learn them in progressive, sequenced order, then there's a weakness in the process. If a person gets to week three and knows everything about the product on the shelf in the pants department, or how to dip an ice cream cone, but they don't know how to greet a customer at the counter or answer their questions, you have failed in the vertical learning process.
Your challenge then, is to determine what 12 competencies you want the employee to be able to do at a rating level of 7, 8, or 9 at the end of 12 weeks. To achieve this, take those 12 weeks and time sequence their learning process so that each week there is one more thing they learn. And at the end of each week, if they have learned it, they pass on to the next competency. This way, in the third week, they're working on number three and they're competent at a 7, 8, or 9 level on numbers one and two. If not, they spend another week on number two. That's what we call vertical integrated training or orientation.
You can't afford not to do these things. The cost of turnover is just too high. In some organizations it's as little as $2,000 and in others it's as high as $8,000, when you figure in the cost and time of recruiting, advertising, interviewing, hiring, and training you spend over a 90-day or six-month period.
People say it's not that bad. I say, "Well, you didn't calculate missed sales because that person wasn't up to speed, the customers who were driven away, the phones that were not answered, and the products that did not go out the door because you didn't have a person on the job who was trained at a level of competency. I mean that's a soft cost, but over time, it's huge.
When they reach the twelfth week, your turnover could drop 40 to 50 percent because of this orientation program. And second, you now have an employee able to effectively do the things your average employee is doing, with no other learning. This is not "Hire now and maybe in a year you'll get to where we want you to be." No, it's 90 days, or you're not here-because we can't afford you, so to speak.
The big question I hear from new hires is, "What if I don't prove myself by the end of the 12 weeks? What if I'm not ready?" I say, "Well, you'll know that before we get there. You'll know this job is not right for you, and we'll know the opportunity is not right for you before we get there." It's a two-way street.
You don't move from step to step up any organization today that's a growth leadership organization without having to pass through these points. And at the end of 90 days, if they succeed at each step, they become an associate, a member of the team. We have a little event, pat them on the back, their name goes on the wall, and the trainee badge comes off. At that point, we drop back to a one-month performance objective for the next nine months.
Next time: Employee training for retention for the next milestones through 36 months.
Thom Winninger has been referred to as America's Market Strategist. His expertise is in value differentiation and revenue growth and he speaks at over 75 conferences each year. His message has appeared in over 300 trade publications and he is author of four books. View Winninger live at www.winninger.com.
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