Remember “Blast from the Past,” the 1999 film starring Brendan Fraser? After a nuclear war scare in the 1960s, young Brendan lives in the family bomb shelter with his mom and dad for 30 years. When he finally ventures out into Los Angeles for food and a ” nonmutant” wife, it becomes a hilarious “fish out of water” tale that reminds us how much things have changed in three short decades.
The movie is a useful analogy-for the convenience store industry as well. Imagine you’ve been transported from a 1960s store to the 2006 version. (If you’re not old enough, think of the movie.) Isn’t every single aspect of the business different? The products, the product mix and the packaging have changed. Store design, display cases and customer demographics have changed. Most of all, the way the business operates has changed. New technologies from POS terminals to self-service food kiosks have transformed every interactionwith clients, employees, vendors and the home office.
On the human resources side of the business alone, payroll, time and attendance, and employee benefit management have largely been converted to electronic automation and self-service models.
Yes, in most c-stores everything has changed completely, save one interesting exceptionhow hourly employees are recruited and hired. For most, the process is much the same as in the 60s: advertise openings, collect handwritten applications, conduct interviews, schedule drug and background tests and complete all the associated paperwork when a new person is hired.
This situation is not unique to the industry. In a recent survey of 100 senior executives in a variety of trade channels, only 3% said their company is currently using automated systems for HR and only 2% planned to do so within the next 12 months. If you break this down further and look at just the process of managing the hourly employee lifecyclerecruiting, selection, onboarding, progression or talent management and, finally, off-boardingthe figure drops even more dramatically.
This reticence to harness the power of automation to manage the hourly hiring and employee life-cycle process is due in large part to these three reasons:
- Return-on-Investment: While it’s easy to determine what automatingwould cost, the benefits in terms of saved time, money and legal exposureare, in the minds of many, difficult to quantify up front. Most system vendorscan supply case studies that document healthy ROIs for their clients. (A studyconducted for one c-store client estimated a projected ROI that ranged from600% to 1000% over several years.)
- It’s Not My Problem: In highly decentralized industries (like c-stores)with a small number of employees at multiple locations and where the HR functionis located at corporate headquarters, it’s usually the case that while operationsis responsible for recruiting and selection, HR still owns the function. Theresult is that while it is an operations pain for those in the field, it isnot HR’s pain. Only a proactive HR department will address the situation.
- Turf Wars: Deciding to automate the hourly hiring process requirescross-functional support in any organization. While an HR group may proposeit, HR is not a profit center, so finance has to approve the funding. If financelikes the ROI, it’s likely the IT group will have an NIH (not invented here)reaction and cite all the technical difficulties as well as all the otherprojects in their pipeline that take priority.
A Look Back
The first major advance in automating the hourly employeehiring process was in the early 1990s when Home Depot built its own automatedHR system and created the first self-service, instore employment kiosks.
By the late 90s, job hotlines using interactive voice response (IVR) technology were in widespread use. The rapid adoption of IVR was spurred by an incredibly tight labor market. These systems allow employers to collect applications 24/7, and are relatively inexpensive. They can also be as simple as a dedicated answering machine or more complex, such as being programmed to determine if applicants meet basic hiring criteria.
The next development-portable,analog employment kioskswere rolledout when most retail environments were not yet wired for the Internet, and only50% of their target labor pool had Internet access. These units collect completedapplications at store locations and job fairs and transmit the data via phonelines to a central collection and distribution point.
Only in the last five years has it become commonplace for employers to offer employment applications on their Web sites, and how this tool is being used in the c-store industry varies widely. In a random sampling of 12 chains, seven offer on-line applications (one of these was not functional), three offer print and snail mail or e-mail links, and two offered only job descriptions. While a step forward in the use of technology, it is still not easy for job applicants to navigate most systems, and most do not perform any basic screening steps.
Where Things Are Going
Today, Web-based solutions handle basic screeningand eliminate redundancies. A typical automated process begins with the applicantanswering a few qualifying questions determined by the employer. If approved,the applicant supplies more information and completes any skill and personalityassessments. Applications can be made available via phone or the Internet, makingit possible to apply from virtually anywhere. This gives the employer a muchlarger pool of prospective employees from which to choose.
Presently, there are several vendors offering hourly employee recruiting and hiring systems for c-stores: ADP, Deploy Solutions, JobFlash, Kronos/Unicru and Taleo.
Most of these offerings promise to increase applicant flow, reduce turnover(by screening for better-qualified candidates) as well as increase operatingefficiencies and reduce costs by eliminating paperwork and transcription errors.
At the high-end, the Deploy and Unicru offerings also have the ability to:
- Run a variety of reports including EEOC data;
- Collect and transfer data to capture WOTC and WTW credits;
- Schedule background, drug and reference checks;
- Automatically populate the myriad forms that must be completed once anapplicant accepts an offer;
- Create interview question sets that use sophisticated logic branching toeliminate redundancies and facilitate fact-based hiring decisions;
- Facilitate the administration of performance and salary reviews with performancemanagement tools; and
- Systemize employee off-boarding (keys returned, exit interviews, etc.) andclosed-loop analysis.
HR departments have always amassed reams of information about employees. When an hourly hiring system is automated, that information then becomes intelligence. Just one advantage is the ability to identify the best source of new hires, be it referrals, newspaper ads, billboards, schools or existing customers.
When it comes to automated hourly hiring systems, decision makers have one of three choices:
- Do Nothing: The do-nothing choice could be prudent as the technologiesadvance and systems become more affordable, but the risks are great. Job applicantstend to follow the path of least resistance and convenience store marketersare not just competing against each other for new hires. The competition todayis every other employer that can use any of the people who meet the same basichiring criteria, such as the entire retail, restaurant and fast food worldsfor starters.
- Do It Yourself: If you have the resources to build your own system,it could be perfectly customized to meet your organization’s needs. This isnot a viable option for most, however, and in many cases has turned out notto be the ideal choice because custom-built systems ten
d to stagnate overtime. Companies that once invested in them are now looking to outsourcingbecause outside vendors keep updating to add features and value.
- Buy a System: If you decide to shop for an outside solution, themost important criteria are that the vendor has strong c-store expertise,a proven track record and one deciphers how well the system meets your needs.Does the system work via IVR, Web, kiosk? Does it recruit, select, assessand integrate with your other processes and systems?
The following summarizes the responses of c-store executives to a recentsurvey of automated hiring system users:
When asked the top two reasons Tesoro decided to automate, retail HR managerPatrick Chalfin responded: “To significantly upgrade the quality (customer serviceskills, honesty, work ethic, etc.) of our hourly employees, which converselyeliminates “warm body” desperation hiring and cost reductionsminimumof 25% reduction in newspaper want ad costs; 4% to 5% annual reduction in turnover;minimal DSOE to install hiring kiosks in stores. When asked: “If you had itto do over again, would you?” Chalfin replied, “Absolutely. It has met all expectationsand we continue to add enhancements.”
The corporate director of HR at a chain with about 2,000 locations, reports they turned to automation to: “Streamline the hiring process making it easier on our management; saving time and resources and to improve consistency by ensuring the highest-quality candidates are hired, reducing the potential for discriminatory hiring and eliminating exceptions to our hiring process.”
Richard Kenny, SPHR and field staffing manager for 7-Eleven Inc., reports that it has become easier for a person to apply for every job they see online, “and in turn we are getting 10 times the response we used to get for the same number of hires,” he said.
Gary Bylsma, director of human resources for WESCO, claims that as part of the chain’s Churn Buster (turnover reduction) program, it found one central reason that people leave an organization is that “the hiring process is not consistent and well-defined for the store manager.”
To remedy the situation, WESCO implemented a new screening process comprisedof three separate interviews, which include behavioral question sets that lookfor desired traits (responsibility, values, etc.) and skill testing. The result?”We have reduced our associate turnover from 80% to between 30% and 40%,” Bylsmasaid.
Another HR manager for a chain in the process of building their own systemreports the anticipated benefits include: “accurate paperwork that will ensurenew hires are paid correctly and on time; the chance of Social Security numbersbeing transposed will be greatly reduced, saving time and money; accountabilitywill improve because every document will be electronically time-stamped at storelevel and in the HR department; and starting pay will be more consistent, jobcodes and titles will be accurate.”
Bob Reale, vice president of human resources and governmental affairs for The Pantry (Sanford, N.C.), is working with Deploy to implement an automated system to get “a higher caliber of applicants and better control of our applicant pool so we do not lose prospective employees,” he said.
Two c-store chains report having earned more than the cost of their systems in captured Work Opportunity Tax Credits.
In their 2001 book, The War for Talent, authors Michaels, Hanfield-Jones and Axelrod report that when Les Wexner, chairman of the board of The Limited, saw his company’s earnings hit a wall and its stock plunge, he conferred with the likes of GE’s Jack Welch and PepsiCo’s CEO Wayne Callaway. Wexner found that while he had been spending most of his time checking sales numbers, reviewing new ads and developing product concepts, “they spent about half their time on peoplerecruiting new talent, picking the right people, grooming young stars and dealing with underperformers.
As a result, Wexner totally restructured his business to focus on hiring and developing talent. Within three years, profits had grown from $285 million to $445 million, and the company’s stock price had almost doubled. Looking back on how his approach to managing had changed, Wexner declared, “I used to pick sweaters; now I pick people.”
The authors conclude: “Of the many prescriptions in this book, embracing a talent mindset is the most important. A talent mindset is the deep-seated belief that having better talent at all levels is how you outperform your competitors.”
Automated employee hiring systems make it possible to choose frontline, hourly employees as carefully as most organizations select their salaried professionals.
Yes, most everything in the c-store industry has changed since the 60s, butwhat was true then is still true today: better talent, at all levels, is thebest competitive advantage you can have.
Mel Kleiman is a trainer, consultant, and author on strategies for hiringand retaining the best hourly employees. Mel’s books include the bestsellingHire Tough, Manage Easy and 267 Hire Tough Interview Questions. For more information,visit melkleiman.comor call (713) 771-4401.