Retail Associates that Maximize the Customer Experience: Matching Talent to the Brand

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1 Retail Associates that Maximize the Customer Experience: Brought to you by: Sponsored by:

2 Retail Associates that Maximize the Customer Experience: Introduction In 2012, the Bureau of Labor Statistics pegged the number of retail sales associates in the U.S. at nearly 5,000,000, and projected that figure to grow by nearly half a million by That s a huge labor pool that harbors an incredibly wide range of skill. With an estimated median annual turnover rate of 67% in the industry 2, hiring associates is a time- and labor-consuming exercise that directly impacts the bottom line. It s also a daily challenge for store managers, who are tasked with spinning a number of plates that include associate management, customer service, merchandising oversight, scheduling, corporate reporting, and constant interviewing. How can retailers ensure that they re engaged in the most efficient, consistent, and compliant recruiting and onboarding process especially those in a widely distributed enterprise? How can they be sure that process is producing associates that will emulate the best performers they employ? How can they be sure the associates they hire will become ambassadors of the brand, deliver the experience customers expect, and produce positive results for the business? In this paper we ll outline four steps to building a process that identifies, recruits, and develops retail associates that will carry forward on your brand promise and your bottom line. 1) Identify Important Behavioral Traits To ensure new associate hires meet both store-level needs and the expectations of the greater brand, retailers must identify a profile of the ideal associate. This profile is not universal among retail segments, much less brands, and it reaches far deeper than a smiling face and able hands. To build a profile of the ideal associate for a specific brand, the retailer must begin by developing a baseline of the metrics most important to the business, the ones that sustain the company s progress. These key performance indicators (KPIs) might include sales per hour, average dollar value per transaction, or customer satisfaction scores, to name just a few. Once those factors are determined, the retailer can identify current associates within the organization who contribute directly to those core metrics within the unique sales environment. Who s leading sales? Who s driving the most upsell? Who s most referenced in customer feedback? The best practice for developing such a profile is to take a representative sampling of associates and run them through a standardized assessment to identify their behavioral DNA. The assessment should identify the individual s core attributes and determine which of those attributes are in practice when they re on the sales floor. Job competition contributes to the aforementioned heavy turnover in the retail industry. It s not just poor performers who find themselves on the open market successful retail sales associates are commonly on the lookout for higher-paying jobs, higher-profile jobs, and opportunities for career growth. With that said, it s important to note that someone who excels in sales at a competitor s store might not exhibit the optimum behaviors and character attributes for success in your organization. That s one reason it s so important for retailers to build a customized approach to associate and candidate assessment. In conducting the assessment, retailers determine not only the traits that make their best performers great in the context of their unique retail environment, but also those traits that contribute to the inability of their worst performers. Documenting the behavioral attributes that correlate to high (or low) performance leads to the creation of benchmarks by which candidates can be measured during the recruitment and interview processes. In talent science, this is called a Fit Score and it s measured on a scale of 0 to 100. Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, Edition, Retail Sales Workers, on the Internet at 2 Hay Group survey, May 2012, 1

3 Retail Associates that Maximize the Customer Experience: With the character traits of their best retail associates identified and systemically documented, retailers can implement predictive tools that assist their search for and evaluation of candidates that fit their desired behavioral criteria. 2) Duplicate Best Behaviors When candidates apply for associate positions at retail stores, hiring managers effectively know nothing about them beyond the personal and job experience data shared by the candidates on their applications. However, with a documented profile of the most- and least-desired associate attributes for your specific stores created, those managers have an inherent advantage: they know what to look for. This is the foundation of talent science. Here s how a Fit Score assessment works during the hiring process. Prior to both the interview process and any evaluation of the skills and experience candidates share on their applications, recruits are directed to take the same unique assessment that identified the Fit Score of the retailer s current associates. Again, that Fit Score enables the identification of a candidate s potential to execute on the retailer s unique goals for its associates, whether that means meeting or exceeding sales quotas, providing exceptional customer service, driving complementary purchases, or virtually any other metric that s important to the retailer s brand. Ensuring that every candidate takes the assessment before managers pore over their resumes and applications creates hiring efficiency. Managers can selectively pursue and personally evaluate candidates based on their Fit Score. Ensuring that every candidate takes the assessment before managers pore over their resumes and applications creates hiring efficiency managers can selectively pursue and personally evaluate candidates based on their Fit Score. The standard assessment should measure several different behavioral dimensions, including: Sociability (is the candidate typically the life of the party or an introvert?) Proactivity (is the candidate passive or aggressive?) Willingness to take direction (is the candidate an independent self-starter or willing to be micromanaged?) Competitive nature (does the candidate hate to lose?) Ambition (does the candidate have inner drive or are they complacent?) 2

4 Retail Associates that Maximize the Customer Experience: These factors are tested, measured, and weighted to produce a Fit Score that s specific to the personnel needs of the retailer s unique culture and business environments. You can t improve what you can t measure. With a core onboarding process designed to produce brand-specific matches to high-performing associates, retailers are equipped to measure, monitor, and train for improved performance. 3) Measure the Impact As new associates are onboarded and their Fit Scores documented, retailers begin to amass a data repository with a Fit Score range that helps drive continuous improvement. The dynamic profile of the ideal candidate results in at least three primary and significantly measurable benefits: Associates who fit into the retailer s culture from day one tend to maintain their employment for longer durations. In some cases, talent science has resulted in 30% to 50% reductions in turnover, which results in incremental reductions in the cost of onboarding associates. That cost is significant. A recent Center for American Progress study concluded that it costs, on average, $3,328 to find, hire and train a replacement for a $10 per hour retail employee. 3 Retailers who improve their quality of hire enjoy better sales performance, as better hires equate to more engaged and better fitting associates who are more satisfied and behaviorally matched to the job. In fact, organizations in Gallup s Q12 Client Database with an average of 9.3 engaged employees for every actively disengaged employee experienced 147% higher earnings per share (EPS) compared with their competition. In contrast, those with an average of 2.6 engaged employees for every actively disengaged employee experienced 2% lower EPS compared with their competition during that same time period. 4 Retailers with Fit Scores and assessment data on their candidates and associates have the insights needed to improve ongoing associate development. When focused on the customer experience expected in a unique retail merchandising environment, associate training initiatives can reap incredible rewards. In fact, a study by the Wharton School of the University of Pennsylvania commissioned by Experticity in 2013 found that retail associates who completed just one module of custom sales training sold 69% more than those without training. Associates who completed six modules of training sold an incredible 123% more than those with no training. 5 But, how can merchants know what training is necessary for which associates without a baseline understanding of the relationship between the individual associate and their sales performance? Fit Score Assessments serve as both an onboarding tool and as the foundation for improvement to ongoing associate development initiatives that drive success. Without doubt, talent science mitigates the high cost of attrition and contributes to the bottom line. But the benefits don t stop there. In addition to driving better hires, improving the customer experience, and driving sales performance, employing talent science during the onboarding processes ensures standardization that protects employers from the significant costs associated with non-compliance. 4) Maintain Standardization in your Recruitment and Onboarding Process Especially in large retail environments, there is inherent risk that busy store managers engaged in distributed hiring processes will unintentionally practice rogue hiring tactics. In addition to subjecting the business to a potential degradation of the quality of its workforce, this lack of standardization can expose the business to discriminatory risk. Equal Employment Opportunity Commission laws dictate that even the questions asked during the interview process can t hint at discrimination against any job applicant because of the person s 3 There Are Significant Business Costs to Replacing Employees, CAP, November 2012, 4 State of the Global Workplace: Employee Engagement Insights for Business Leaders Worldwide, Gallup, 2013, 3

5 Retail Associates that Maximize the Customer Experience: race, color, religion, sex (including pregnancy), national origin, age, disability, or genetic information. This means your hiring process has to be compliant with federal law, and maintaining a compliant process includes the wording and administration of interview questions, tests, and behavioral assessments. The threat is real, and the EEOC makes sure of it. In 2013, Toys R Us spent $35,000 of a Columbia, Md. store s profit and an undisclosed amount of equitable relief to settle a disability discrimination lawsuit that arose from a violation of the Americans with Disabilities (ADA) act during a deaf candidate s interview process at the store. 6 Other legal actions have resulted in penalties on retail organizations that climbed into the millions of dollars, With a documented talent science management process in place, managers are well supplied with the information they need to comply with laws governing the interview process, and rogue managers are held accountable for non-standard hiring practices. With a standardized system based on time-tested execution in retail settings, potential claims of discrimination are held at bay. Conclusion The implementation of a talent science program that begins at the recruitment phase holds the potential to yield big dividends for retailers. By developing a system that documents candidate Fit Scores, which are directly correlated with the attributes sought in a successful associate, retailers can create a baseline that results in efficiencies gained in the hiring process and better associate performance from day one. The streamlined hiring process and attrition reduction that result come as significant benefits to time-strapped store managers. The process also drives ongoing training to complement sales associates strengths and correct their weaknesses, and standardization protects the business from the legalities of non-compliance during the hiring process. These are incredibly important benefits, adding to the associate retention advantage created through talent science that s so critical in retail, where turnover remains a plague that s expensive and time-consuming to treat. Organizations in Gallup s Q12 Client Database with an average of 9.3 engaged employees for every actively disengaged employee experienced 147% higher earnings per share compared with their competition in Those with an average of 2.6 engaged employees for every actively disengaged employee experienced 2% lower earnings per share. 5 EEOC, 6 Toys R Us Will Pay $35,000 to Settle EEOC Disability Discrimination Lawsuit, EEOC, October 2013, 4

6 Retail Associates that Maximize the Customer Experience: About Infor Infor is the world s third-largest supplier of enterprise applications and services, helping more than 70,000 large and mid-size companies improve operations and drive growth across numerous industry sectors About ISR Integrated Solutions For Retailers is the premier source for technology solutions in the retail industry. Our goal is to help retail executives make informed decisions about technology and operations solutions for every sales channel. The magazine and website provide insight on how retailers can achieve critical business objectives by integrating leading-edge solutions across the entire retail enterprise Brought to you by: Sponsored by: 5