Managing Today’s Retail Workforce

Because major shifts in the economy have created unparalleled effects on the labor market, Convenience Store Decisions and Humetrics Inc. collaborated on our first ever human resources study in order to help convenience store owners understand the actions those in our industry are taking–or planning to take–in the coming months.

An in-depth survey asked more than 25 questions relating to major staffing issues affecting chains across the country. Responses were collected from late May through early July.

The 75 industry respondents ranged in size from more than 500 employees (13.2%) with more than $500 million in annual revenues (3%) to 25 or fewer employees (36%) with $1 million in annual revenues (9%).

The summarized survey results include some interesting surprises, as well as some insights gleaned from reading between the lines.

Given the level of concern about the floundering economy of late, the survey results paint a very different picture for the convenience store industry. Looking at the next 12 months, more than half (56.6%) of the respondents expect staffing levels to remain the same and another one-third (35.5%) expect to actually increase staffing. Only 7.9% predicted staffing levels would decrease.

Of the respondents who are in a hiring mode, most are looking to add part-time hourly associates (83.9%), while 58.1% are adding full-time hourly workers and 32.3% and 16.1% need frontline managers and multi-unit level managers respectively.

“So, we see between the lines that, while ours might not be an industry of choice for most job seekers, for those of you in a recruiting mode, it would be wise to capitalize on the industry’s stability in the face of nationwide layoffs in other industries,” said Mel Kleiman, president of Humetrics, which tallied the survey results.

And there’s another recruiting trump card many c-store chains easily overlook, Kleiman said. When it comes to recruiting store managers, most c-store organizations report the best results come from internal promotions (32.4%).

“How many people know what a great industry of opportunity ours is?” Kleiman said. “What kind of recruits would you attract if you changed that sign from “Help Wanted” to “We Grow Store Managers?”

If more employees thought they might have a shot at a management position, what effect might that have on the industry’s extraordinarily high employee turnover levels?

“We can’t help but ask because, even though this economy is causing most employees to cling to their jobs for dear life, most of our respondents reported that turnover is staying at about the same traditionally high levels for both hourly employees and salaried positions even during the downturn,” Kleiman said.

Of the handful of respondents who are predicting decreased staffing over the next year, the cuts are expected to be evenly divided between full-time hourlies and the corporate/office staff level.

Growing From Within
In spite of all the attention given to job boards, Web sites, Facebook, Twitter and other social media sites, the best recruiting sources for new frontline, hourly employees continues to come from traditional sources: employee referrals, in-store advertisements and walk-ins.

As mentioned above, 32.4% of respondents promote from within when they need managers. Referrals are the second best source of managers at 22.5% and, surprisingly, newspaper want ads are third at 16.9%.

No surprise at all is the fact that company Web sites and Internet job boards are poor recruiters. “While they deliver quantity, as we’ve all come to discover, quality is sorely lacking,” Kleiman said.

 

In another surprise given the economy, 97.3% are increasing their training activities and budget or remaining at the same expenditure levels. When asked why, typical responses included:

• Well-trained and friendly employees will set our company apart from the others.

• Forced to by environmental regulations.

• Better training = better customer experience = higher sales.

Of those who have increased their investment in training, the greatest emphasis (80%) is on customer service skills, while foodservice safety/sanitation and manager/district manager training came in at 57.8% each.

“Considering that the No. 1 reason for employee terminations in our industry is theft, we found yet another surprise. Roughly 40% of respondents are not doing any type of background or reference checks on new hires and only 36% conduct drug testing,” Kleiman said. “It’s highly likely this failure of due diligence is a contributor to both employee turnover and shrink.”

Missed Opportunities
One area convenience retailers can immediately benefit is on their tax filings. The CSD/Humetrics survey found that just 25.7% of respondents are filing for and collecting work opportunity tax credits, while 37.1% didn’t know what they are and another 37.1% know about them, but don’t file.

Determining why is outside the scope of this survey, but one respondent’s comment may be a clue. “After a year of reporting all new hires to a firm that files for these tax credits, we found none, not one, of our new hires qualified us for a tax credit,” he said.

“Understanding how tax credits work and the opportunities available to the convenience store industry could add thousands of dollars to your bottom line,” Kleiman said.

When we asked about full-time employee benefits, 95.7% reported they provide paid vacation and sick leave, 73.9% offer health insurance, 53.6% have a 401k program and 43.5% provide a dental care program.

Several respondents added that they offer simple IRAs with company matching, credit unions, life insurance, profit sharing accounts and bonuses. Less than 10% are either increasing or decreasing benefits, while about 85% are keeping benefits at the same levels.

The results are a little different for what’s offered to part-time people in that while 80.4% extend vacation/sick leave, more offer a 401k (43.5%) than a health plan (37%), with dental coming in at 21.7%.

Of the few who are putting more of the burden of benefits on their employees, more than half are asking managers to share more of these costs while 37% are asking more of hourly employees. Well over 70% reported no changes in this regard.

When asked: “Which statement best describes your current pay policies for hourly employees and managers?” the most frequent response was, “we are giving selective raises,” followed closely by “we have a pay-for-performance program and give raises based on productivity.”

When it comes to investments in systems or technologies designed to manage labor costs, improve the hiring process and boost productivity, about 60% reported making no new technology investments at this time. “Perhaps, this is where the economic slowdown is having an effect,” Kleiman said. “For those who are investing, most are looking to improve scheduling, timekeeping and payroll systems.”

Respondents that participated in this survey and requested the in-depth report have been given access to the detailed findings, which will serve as a benchmarking tool for those charged with staffing, strategic planning and other human resources responsibilities. A follow-up survey will be available in January 2010 with complete benchmarking data. CSD

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