Training and preparing employees for advancement is one proven method for attracting and retaining these talented workers.
By Mel Kleiman, Contributing Editor.
In the course of my more than 25 year’s of consulting and professional speaking work about how to recruit, select and retain the best frontline employees, I have identified one common case of mismanagement that causes many convenience retailers to stagnate and some to eventually fail. It’s the practice of tolerating mediocre performers.
Let’s face it, it’s not the dishonest or disrespectful or undependable people who keep our stores from excelling. No, we’re smart enough to cut our losses and fire those losers fast. It’s the mediocre, just-doing-enough-to-get-by people who keep us from building an exceptional, winning team that outperforms the competition.
I’ve seen far too many nationwide chains, multi-unit manager, managers and especially single store operators put up with mediocre performers rather than replace them. I’ve known managers who won’t fire average-Arnie because he’s been with the company for five years, and situations where everyone else has to work that much harder because lazy-Lucy is a relative. Other typical scenarios are because the employee’s wife just had a baby or Christmas is coming. These kinds of justifications aside, however, the three biggest reasons mediocrity is allowed to flourish are because:
1“I just don’t have time right now to hire and train a new employee.” This is another way of saying you don’t have any bench strength. There’s no one at the ready to take the mediocre employee’s place, get in the game and play to win. In other words, the convenience of mediocrity trumps the inconvenience of change.
2 “We will have to pay unemployment.” No one stops to think about the long-term cost of substandard performance versus the limited-time payment of benefits. One way or another, you’re going to pay and the right decision is in favor of the overall quality of your organization.
3 “Things are going great.” It sometimes happens, too, that when a company is quite profitable and growing, the healthy bottom line makes it easy to ignore the underperformers. However, should the economy slump or the company stop thriving, the deadweight could be what eventually sinks the ship.
There are some simple solutions to this problem, but, like most things worth doing, they aren’t necessarily easy for c-store operators.
• Recruit and interview religiously. Commit to interviewing a specific number of applicants each week in order to build a database of highly- quality people you can call on when needed. Network in your professional circles and start an employee referral program that rewards employees who send you applicants you hire.
• Raise the bar. Too many managers hire the first warm, minimally qualified per-son who shows up. Kick your hiring standards up a notch and don’t settle for less. Screen in applicants with a track record of successful achievements and a can-do, positive attitude. If the job requires certain skills, have applicants demonstrate they can do what’s required in a way that meets your standards.
• Hold people accountable. Spell out what it takes to be a successful member of your organization and make sure everyone knows exactly what’s expected. Correct anyone who misses the mark so they can get back on track. (If they repeatedly miss the mark, they don’t belong on your team.)
• Become an employer-of-choice. Is your company a fun place to work? Do you have family-friendly policies? Do all the players on your team enjoy working together? When you can answer “yes” to these questions, you’ll be able to attract top-notch talent at every level.
Of course, it’s important to exhaust all remedies for improving a mediocre player’s performance (additional training, performance reviews, warnings, etc.). If these measures don’t get them up to speed, it won’t be a surprise when you hand them their pink slip. Think of it this way, their poor performance and failure to improve tell you they don’t really like their jobs, so you’re doing them a favor when you free them up to move on. And, once the deed is done, don’t be surprised when others on your staff say, “What took you so long?” Your employees usually know long before you do when someone doesn’t measure up.
For more than 20 years now, numerous surveys and studies have shown that employee referral systems (ERS) are the only recruiting tool that consistently delivers high-quality workers who stay on board longer in every industry across the board. In fact, world-class organizations like Southwest Airlines, Microsoft, Disney, and Ritz Carlton reportedly attain from 50-70% of their annual new hires exclusively through employee referrals.
Unfortunately, in the c-store industry, the source of the most job applicants is walk-ins, which is the main reason c-store employee turnover is off the charts. When an applicant walks in exactly when you need someone, they can’t help but look great to you. The problem is a great applicant is not the same thing as a great employee.
I can share a great case in point, and it’s actually about a c-store client. Turnover was running at 270% and the average new hire lasted less than 60 days. When we broke down the data, we found that employee-referred hires stayed on the job at least three times longer.
These are the reasons why: Employees won’t refer people who they don’t think will be a good fit. There’s no faster way to make a bad name for themselves with the rest of the team. You’ll do your normal screening and interview, of course, but a referred applicant has already cleared one level of insider prescreen.
People know what they are getting into. Friends tell each other the truth and your employees tell their friends much more detailed information about the job and working conditions than you ever would. When applicants know up front what’s great and what’s not and apply anyway, there is a much higher likelihood they’ll stay on the job longer because there are no surprises.
Employees like to work with friends. Taking a new job is a scary enough on its own. Not knowing a single soul you’re going to work with makes it worse. The prospect of working with someone the applicant already knows and likes makes the job far more attrac-tive than any other.
People are always interested in getting a better job. The catch is they want it to fall in their laps. Most ERS applicants are already working and are only passive job seekers at best. They won’t spend a lot of time browsing job boards or noticing your “Help Wanted” signs. But, if a friend thinks they’d be a good fit and would like your organization better, they are much more likely to apply.
An ERS also delivers a fantastic return-on-investment versus other tools. One survey I saw reported the cost per hire for a non-exempt position as $2,100 via print ads, $1,000 by means of a job fair and $392 via an employee-referral program. Website banners run in the thousands of dollars per year and recruiters’ salaries or commissions are nothing to sneeze at.
Your numbers or the tools you use may vary, but ERS will still deliver the best ROI when you factor in applicant quality and longevity. Besides allowing you to hire better people faster (pre-qualifies applicants and shortens the recruiting cycle), an ERS will improve morale and productivity because your employees have a vested interest in seeing the employee they referred succeed and the referred employee doesn’t want to let a friend down.
The downside to an ERS is that sometimes referred candidates can tend to be all from the same background, school or former employer, which can limit diversity. For this, as well as other reasons, it’s still a good idea to use a mix of recruiting tools with the emphasis on your ERS.
The best ERS has several things in common:
• Commitment. It has to start from the top. For any referral program to be successful, senior management has to buy in and support it consistently. They need to send a clear message that it’s everyone’s job to actively search for new team members. I’ve seen far too many of these programs kick off with a lot of fanfare and hullabaloo only to lose steam or disappear entirely when personnel change or a new program of some sort takes the spotlight. Top management has to walk the talk when it comes to their “most impor-tant assets.” You can’t just put it out there and hope it will fly.
• Marketing. The ERS must be promoted constantly. In some instances, weekly hot job emails that also list employees who have made successful referrals keep things moving. I’ve also seen a CEO routinely email congratulations to all those who took the time to make referrals. Make sure it’s on the agenda of every staff meeting and announce openings, congratulate people and award prizes or simply give a round of applause. Also, these programs have to be re-energized at least once a year with new tools, ideas and incentives. Keep putting new life into it.
• Incentives. Although some companies do give cash, I’m not a big fan of that. Cash gets spent on something soon forgotten or used to pay bills. Instead of cash, think about things like gift certificates, lunch with the boss, time off or movie tickets. This is where your creativity gets a workout. I’ve also seen drawings for one big prize (like a car, big-screen TV or even a cruise) where everyone gets one entry for every successful referral. And it’s always a good idea to reward every employee for every single referral—no matter what the outcome—with something like a personal thank you, coffee mug or something like first choice of shifts for a week.
No matter what mix of incentives you settle on, do not make the mistake of giving the awards after the newly hired employee has been on board for a certain number of days or months. The only way to reinforce good behavior is to reward it on the spot, not 90 days later. Plus, you don’t pay the recruiter, job board or job fair only if the new hire stays on board a certain amount of time. Why penalize your own employees, who just did you a huge favor, this way?
Ease Plus Efficiency Equals Effectiveness
This is where most ERS go wrong and die a slow death. To make your system deliver, you need to make sure:
Referred candidates get top priority and there is an efficient system that lets referring employees know how things are going. This is very important to both the employee and the applicant. Kid gloves are called for here.
• Whenever there’s a job opening, everyone knows at once be it via email, bulletin boards and staff meetings.
•There’s an easy way for employees to refer people and make sure they get the credit for it. Some companies have created virtual postcards that employees can send to friends. Many have online referral forms. An easy way is to provide “referral cards” where the employee can fill in his or her name and give it to the potential candidate.
• No hard feelings result when referrals are not hired. Good communications can ward this off.
No matter the size of your operation, you can make employee referrals work for you. If corporate doesn’t institute a full-blown program or you just don’t have the money or time, just make it a point every month or two to ask your best people: “Do you know anyone in your school, church, class or neighborhood who might be interested in working with us?” It’ll work wonders.