Nugget Market Cheese Manager Kyle Smelosky rearranges product before the afternoon rush

Nugget Market Cheese Manager Kyle Smelosky rearranges product before the afternoon rush

Hire Smarter. Make more Money

Why the retail industry needs to rethink the way it hires employees

Back Article Jul 31, 2013 By Kristina Shevory


Caitlin Kelly never considered working in retail until she was laid off from her full-time reporting job at the Daily News in New York six years ago. She had worked at a steady progression of large metropolitan dailies and assumed, at age 50, that she would retire from one. While she was able to make some money as a freelance reporter, it wasn’t enough, and she eventually found herself applying for a sales associate job at The North Face.

It was her first retail job, and she says her manager later told her he hired her because she enjoyed the outdoors and was engaging. She excelled at the job, doubling and tripling her sales goals and, she says, really enjoyed helping people find the right gear for their camping, trekking or backpacking trip because she was an avid traveler herself.

“This isn’t a low-skill job,” says Kelly, who wrote the book, “Malled: My Unintentional Career in Retail,” about her experience. “You’re almost a combination of bartender and therapist when you’re interacting with the public. People are hungry for some social interaction; that’s why they go into a store.”

In a competitive marketplace where customers are pinching pennies and using mobile phones to hunt deals, it can be tough for a retailer to attract — and keep — customers in their stores. They may consider sales, coupons or store remodels, but something more prosaic would likely have a larger effect: hire smarter.

Many retailers assume their employees, most of whom are paid near minimum wage, will leave relatively soon, so they don’t consider hiring for longevity and quality. But if retail employers were to re-examine who they hire, they could very well improve their customer experience and boost sales.

“Technology has enabled and empowered the consumer like never before,” says Lew Kornberg, managing director of corporate retail solutions at commercial real estate brokerage Jones Lang LaSalle in Chicago. “As a result, retailers have been forced to up their game. If they don’t, they become less and less relevant.”

Retailers are increasingly looking at their employees as brand ambassadors — people who are enthusiastic about the company and will impart that excitement to customers — rather than as cashiers. Good sales associates help retain customers and generate sales because they help a retailer stand out in a crowded marketplace and pass on real knowledge to consumers. At a time when about 75 percent of purchases are still made offline, according to a Verde Group-Wharton School of the University of Pennsylvania study, it stands to reason that retailers need to do whatever they can to make their store stand out.

“There is no better way to engender loyalty than having a cracker-jack salesman connect with a customer,” Kornberg says. “People have to look forward to what’s new and talk to salespeople. That’s true of a company with 1,000 employees or one employee.”

A good sales associate can stand out at a time when poor customer service seems endemic and consumers have gotten used to little help. Many consumers have turned to their smart phones for shopping advice because they find customer service to be so abysmal. In a May study sponsored by Google, 1 in 3 shoppers use their smart phones for product information rather than rely on a salesperson. For appliances, more than half of shoppers use their smart phones.

To be sure, it can be difficult to hire and retain good salespeople when wages are near minimum, unless a company provides inducements in the way of pay increases, flexible schedules or an enjoyable workplace culture. Turnover has traditionally been high in retail, and it has increased as the improving economy gives employees confidence they can find other jobs, according to the Hay Group, a global management consulting firm in Philadelphia. In 2012, median turnover was 67 percent for part-time workers, a 33 percent rise over the previous year. Fewer full-time workers left their jobs, however, with turnover at 24 percent in 2012 versus 27 percent in 2011.

Hiring well isn’t a feel-good measure. It also can improve a company’s financial performance. Reducing turnover can bring down employee costs because a manager reduces time spent hiring and training new workers. It can also create a more cohesive marketplace — and happier employees. Among Fortune magazine’s annual list of the top 100 best places to work, turnover is two to four times lower. Those companies’ stock also performed better, as much as 4 percent higher than their competitors between 1984 to 2011, according to a paper in the Academy of Management Perspectives.

Sales management, particularly in retail, has traditionally been driven by finances and keeping costs low. A good workplace culture was viewed as something nice to have, not an essential. But now that customers can purchase anything on the Internet, they expect a custom experience when they step into a store, and retailers have adapted by reevaluating their hiring practices, employees, store design and products. “They now realize they need to develop a culture that draws and retains people,” says Maryam Morse, senior principal at Hay Group.

At Southwest Airlines, many employees come to the airline from disparate fields, looking to start second careers. There have been teachers, stay-at-home moms, accountants and those in the fashion industry. When hiring, Southwest looks for three qualities: “a servant’s heart, a warrior spirit and a fun-loving attitude.”

“If we get the right people on board, we can train people for skills,” says Chris Mainz, a Southwest Airlines spokesman. “We try to think outside of the box in who we look for. We don’t give our people a lot of rules and guidelines.”

More and more companies are now looking at developing career paths and improving their culture because they realize their bottom line will suffer if they don’t. Creating a better work environment requires some imagination, but it can reap benefits in retention. One of Morse’s clients created an employee recognition program and celebrated their achievements with an Oscar-style event complete with a red carpet and awards. Sales contests are another popular incentive. At one retailer, an employee who hit their monthly sales goals could pick a gift from a box of wrapped items. The gifts, which ranged from gift cards to iPods, were substantial enough that employees actively strove to be selected.

Many companies who treat customers well also treat their employees well. They typically have good benefits, robust training and provide benefits both tangible and intangible. Sales staff is often given latitude to respond to an individual customer’s likes and dislikes and doesn’t operate off a script.

Businesses with great customer service often have flexible hiring practices. Instead of focusing entirely on a resume, they focus on personality. People who are friendly and are passionate about the industry and company will impart that passion to the customer.

“If you look at someone’s resume, you’ll get their experiences, education, but what you’re not getting is behaviors,” says Marc Wallace, a vice president and sales incentive practice leader at Hay Group.

At Nugget Market in Woodland, Calif., Mary Muller, the grocery chain’s director of human resources, looks for an eclectic mix of people who want to help others and have an easygoing attitude or a “bright smile” instead of long-time retail experience.

“You can have a great skill set. You can be the best at cutting meat or decorating cakes. If you don’t have a great attitude, you’re not going to fit in,” Muller says.

Nugget Market must be doing something right. For the eighth year in a row, the grocery store chain was listed in Fortune magazine’s top workplaces nationwide. Some of its employee benefits explain why. Employees get flexible schedules, discounts and health benefits if they work more than 92 hours a month. This year, the grocer, which has been owned by the same family since its founding in 1926, is hosting free rafting trips for all of their associates.

“The people make the difference. If you can buy the same can of soup from any grocery store, what’s going to bring you in?” Muller says. “It’s the service and environment. We have that in mind when we hire. We consider our people to be our competitive edge.”


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