By Mel Kleiman, President, Humetrics
Convenience Store Decisions and Humetrics recently collaborated on our sixth annual HR survey. The following results, based on respondents’ recent experiences and expectations, offer industry-wide insights as well as useful benchmarks.
This year’s survey asked 32 questions relating to human resource issues and collected responses from mid-February through mid-March 2014.
Respondents’ employers ranged in size from 25 or fewer employees (21.2%) with less than $1 million in annual revenues (3.1%) up to more than 500 employees (27.2%, up a bit from 24.4% in 2013) and more than $500 million in annual revenues (12.5%). The vast majority of respondents this year were in the 101–500 employee range (33.3%) and the $50 million-$500 million annual revenues categories (34.8%).
When we look at the respondents by job title, we find that 41.4% are corporate human resources professionals, 10.3% are regional/store managers, 3.5% unit level managers and 44.8% comprise “other corporate personnel.”
Employee Screening & Staffing
When it comes to staffing and training activities, most of these responsibilities are handled by store managers with the exception of drug testing, which more often is handled by human resources personnel (52%) or a third-party vendor (16%). Job applicant prescreening (testing, etc.) is also more often done at the corporate level (43.8%) or by a vendor (12.5%), as opposed to by the store manager (31.3%).
Twenty-eight percent of this year’s respondents increased staffing levels in 2013 and expect to add more personnel in 2014. The majority (58.3%), however, reported staffing levels stayed about the same in 2013 and 52.8% expect they will not change much in 2014. While 13.9% reduced staff in 2013, 19.4% expect a decrease in 2014.
Again, like last year, employee turnover is still at historically low levels for the industry. With the exception of part-time employees, most respondents said the majority of employee turnover still ranges from 0-7% across the board. When we look at full-time, hourly employees only, 54.5% of respondents did report turnover as being greater than 25%, but this is nowhere near the 100%-plus that was the norm in the convenience store channel just a few years ago.
Twenty-two percent of participants expect to devote more time and money to employee recruiting activities this year (vs. 10.6% last year) while most (62.9%) said recruiting activities are expected to stay at about the same levels this year as last.
When we look at the recruiting methods used to attract both hourly and salaried employees, there is only one notable change from last year’s results. While still not universally employed, about 50% reported using social media (Facebook, Twitter, LinkedIn, etc.) this year, up from 28% in 2013 and only 2% in 2012. The recruiting tools deemed “most effective” were:
When asked about the tools employers use to screen in the best job applicants, responses show that more employers are using more screening tools. Other than employment application forms and resumes, those most widely in use for hourlies are criminal records checks, in-house or outside service reference/background checks, the telephone prescreen interview and drug testing. While approximately 50% are now using attitude and personality assessments, about one-third of respondents expect to add one or both of these tools in 2014.
The top three staffing/human resources challenges cited for 2013 were recruiting, reducing turnover, and employee screening and selection. In 2014, respondents said they expect the biggest challenges for the next 12 months will be recruiting, reducing employee turnover, managing benefits (specifically Obamacare) and compensation.
The most frequent reasons hourly employee give for leaving are, in order:
• More money;
• Family-related matters;
• Differences with manager/supervisor;
• No opportunity for advancement.
The most frequent reason hourly employees are fired are, in order:
• Would not meet performance standards;
• Could not meet performance standards.
Approximately 60.5% of respondents reported that training programs stayed about the same in 2013 and about 50% expect them to stay about the same in 2014. Of those who will increase their investment in training (about 46%), the greatest emphasis is again on customer service skills (72%), followed by tobacco/alcohol sales (52%), foodservice safety/sanitation, teamwork and safety (all at 48%).
Approximate, yearly training budgets ranged from $50 to $1,000 per employee with the median falling at just under $400.
Labor Costs and Benefits
Not surprisingly, approximately 78% of respondents expect labor costs will increase in 2014.
Currently, store managers’ salaries range from $22,000-$55,000 annually with an average of $39,490 (slightly higher than last year’s $36,500). Assistant managers’ range from $15,000-$37,000 per year with an average of $25,662.
The hourly rate for a full-time employee ranges from $7.15-$12.50 per hour with an average of $9.12, down slightly from $9.35 last year.
When asked: “Which statement best describes your current pay policies for hourly employees and managers?” the results for salaried employees were:
• Selective raises (36.1%);
• We have a pay-for-performance program and give raises based on productivity (25.4%);
• Across-the-board raises of 1-3% (22.2%);
For hourly employees, the 2013 results were:
• Selective raises (40.5%);
• Across-the-board raises of 1-3% (29.7%);
• Pay for performance (18.9%).
Slightly more than 24% reported a 2013 “wage freeze” and 37.6% expect that to be the case in 2014 as well.
Less than 30% reported any initiatives undertaken in 2013 or planned for 2014 to reduce labor costs. Most of the additions comprise new systems and/or technologies.
When asked about Obamacare, respondents were divided between those that reported it would have no effect on staffing levels (48.6%), growth plans (43.2%) and employee mix (43.2%), and those who believe it will have a negative impact on all three (48.6%, 56.7% and 56.7% respectively).
It’s interesting to note that paid personal time off gained considerable favor over the past year, although it should be kept in mind that the same employers or people did not necessarily complete the survey each year.
More than 80% expect benefits packages to stay about the same in 2014, while 25% expect they will increase and 9% think they will be decreased.
In addition, 60% saw healthcare costs increase last year and 80.7% expect them to rise in 2014.
Approximately 66% said employee-related lawsuits “were at about the same levels as 2012” in 2013 and 53.1% expect them to stay about the same in 2014 while 45.4% reported levels for worker’s compensation claims were about the same and about one-half expect them to be the same again this year.
When asked: “Has you company been audited for any labor-related issues in the past year?” 6% answered, “yes.”
When asked if any efforts are underway to unionize employees, 91% said “no,” 3% said “yes,” and 6% responded “don’t know.”
As for new technologies acquired to improve the hiring process and/or productivity, about 80% reported no additions in 2013 or planned for 2014. The implemented or planned most mentioned additions by the other 20% were scheduling systems, new training technologies, and new payroll systems or suppliers.
Finally, when asked: “How was business in 2013 and how do you think 2014 will compare in each of the three categories listed below?” the majority of chains polled reported that they think 2014 will improve or at least hold
Keeping Your Best Employees
People are always interested in getting a better job. The catch is they want it to fall in their laps. That is good and bad news for retailers. According to Snagajob, an employment Website used primarily by hourly workers and employers of hourly workforces, job seekers have applied to 3% more retail positions in January and February 2014 compared to the same two months last year.
This means more good people are considering retail, which could help you elevate your customer service. It could also mean that your good people are looking for other companies where they will feel more appreciated.
Over the past 12 months, Snagajob noticed a number of employee trends, including:
• Beginning in the second quarter of 2013 Snagajob found that roughly 62% of employers said they’re increasing their workforce.
• From May 2012-April 2013, Snagajob saw a 3.4% increase in the number of job seekers reactivating their job search.
• People want to search for jobs through their phones: from May 2012-April 2013, Snagajob saw a 101% increase in average monthly mobile visits.
From Snagajob’s recent minimum wage survey:
• Most workers would be content making $9 per hour and 33% of employers are willing to pay that rate.
• About 83% of employees said they would take a job at $7.25 per hour today, if they were guaranteed a $1 pay increase after every six months of work.
• More than 70% of employees said they wouldn’t support a minimum wage hike if it meant job cuts for co-workers.