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Retail Experience - Improving the Quality of Hire Boosted Workplace Productivity

For the past year we have been working very closely with the management team of a large Canadian Retailer that has stores from coast to coast.  The average store has a staff of 100-150 employees with 40,000+ employees across Canada.  Before the study began we agreed on the areas that we wanted to measure to see if the HiringSmart Process was working.  These areas were retention of good people, absenteeism, shrinkage and sales.

For the first phase of the study we began to use the online hiring portal combined with the Step One Survey II on every person that applied.  This would give us our base line to measure what we were attracting and give us the opportunity to practice using a different approach than in the past.  Concurrently, we assessed the existing management team using the Profile XT.  This gave us information that would be used over the year to help the general manager coach his own managers, and for the human resources person to complete a succession planning exercise for the store.

Quality of data improved by 25%

At 3-month intervals we met together to review the data that was collected, and make adjustments to the process.  Our target was that 70% of our Step One Survey II reports would come back to us with a distortion scale between 7 and 9.  With this score we are confident that what we are reading is accurate.  Distortion scores below 7 suggest that we are getting a less than accurate picture of the candidate.  After the first 3 months we were only reaching 60% of the reports obtaining 7 or higher.  For the second 3-month period, we used the TalentSeeker application form to pre-screen the candidates before having them complete the Step One Survey II.

Comments by Management Team:

“We are attracting higher quality people.”

“Our standards have gone up.  We are much more selective of who we hire.”

“The people we have are the people that we want to keep.”

“Things get done faster and without pain.”

Retention increased by 57%

This is where the real learning happened.  As data regarding attitudes towards integrity, reliability and work ethic were added into the decision making process for selecting new employees, we discovered that as the scores increased in these three areas, turnover was not improving, it was actually increasing.  Two things happened:

1. Those who were employees in the store prior to the new hiring process left in greater numbers as the new people arrived.

2. We discovered that we needed to do a review of the managers that were supervising the new employees.

We discovered that we had been selecting employees in the past that suited the management style that we had.  After 6 of the 13 managers were replaced, retention of employees with higher scores on the assessment stayed 57% longer than they had before the changes were made to the management team.

Absenteeism Declines

At the beginning of the study, absenteeism was a daily occurrence.  At the end of the study, it was recorded 1-3 times per month.  This has directly contributed to the productivity (specifically) of the cashier and floor staff.  Sales per man-hour of payroll Increased to general a savings of over $90,000 for the first year on payroll expense – fewer people were required to get the same sales.

Learning in Sales

Sales did not increase.  However, the number of complaints for out-of-stock items did increase.  The learning has been that if you increase the quality of the employees providing customer service on the floor in your retail store and manage them appropriately, you must increase your inventory or you will cause a new problem – workforce productivity spikes and they sell too much too fast.

Overall, the findings show that the management team has mastered the HiringSmart process, successfully screening out effectively.  As the year passed, the Step One Survey II results became more of a confirmation of observations than a provider of new information.  Candidates that are making it to the assessment stage are consistently above the population average for integrity, reliability and work ethic.

Editor’s Note:
A large retailer in the same shopping plaza has approached us about our work as they have found an increase in shrinkage and absenteeism in the past year.  Do you think this is because they were hiring the people that did not get hired at the other end of the parking lot?

Hiring Myth #10

chartMyth #10: Investing in employee satisfaction makes good business sense.

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