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lightspeed-best-practices-for-hiring

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lightspeed-best-practices-for-hiring

  1. 1. FOR HIRING & BUILDING ANFOR HIRING & BUILDING AN
  2. 2. INTRODUCTION RECRUITING Attracting the best candidates Getting to know your candidates Hiring BUILDING AND MAINTAINING WORKPLACE CULTURE Training Employee engagement EVALUATION Salaries and benefits Promotions Performance reviews CONCLUSION TABLE OF CONTENTS 03 04 11 16 20 2
  3. 3. Finding the right employees can make or break an independent retailer. Good employees drive more sales. They attract more customers. And they help keep your work environment positive and productive. Keeping good employees is essential to your success. Studies have found that on average it takes $3,328 to find, hire, and train a replacement employee for a $10/hour retail position.1 But keeping retail employees can be a challenge. The median turnover rates for part-time retail workers is an eye-watering 75 percent, according to Hay Group, a management consulting firm.2 That means you can expect to lose three out of four of your part-time employees every year in a typical retail store. Even with these challenges, independent retailers have distinct advan- tages. This white paper explores those advantages and how to use them to attract and keep the best talent for your store. We will also look at industry best practices for recruiting the most common retail employees — millen- nials, the most efficient screening and interviewing techniques, tips on employee training and engagement, and proven methods for evaluating employees. INTRODUCTION 3
  4. 4. As an independent retailer, you have something that large retailers don’t: you can give your employees the opportunity to be an essential part of your business. You may be surprised how much this matters to people. While it may be tempting to hire the first person who walks in with a resume and availability on the days you need them, take the time to thoughtfully recruit your employees — it will pay off and save you time in the long run. RECRUITING 4
  5. 5. Attracting the best candidates To identify the right employees for your store, you first need to think about your customer. What are his or her shopping preferences? Lots of assistance or more hands-off? What neighborhood do they live in? What music do they like? How old are they? Do they have kids in tow? What occupies their time outside of their jobs? Expertise in your store’s specialty is valuable, but not as valuable as an aptitude for customer service. It doesn’t help to hire an electronics expert if she’s hopeless with people. As most stores must manage part-time shifts, they frequently end up hiring younger employees — the “millennial” generation, born between the early 1980s and early 2000s — whose schedules often fit with a retailer’s busiest hours. Clothing and specialty retailers in the US especially rely on younger employees, with shoe store employees being the youngest at a median age of 24.3 In Europe, 15 to 24 year-olds make up 16 percent of total retail employment.4 RECRUITING “Employees at small retailers have fantastic opportunities to learn and do things that would take years to work up to at a big retail store — that will attract a lot of good candi- dates.” - Karim Kanji, Retail Business Consultant former Store Manager and Retail Operations Manager for H&M, G-Star, and Diesel 5
  6. 6. Attracting millennials To find and attract candidates, especially the younger crowd, you should head to where they are: online or on campus. • Popular local online classified ads, like Craigslist, Kijiji in North America, or Gumtree in the UK, are free. You can also use social media such as Facebook, Instagram, or Twitter. • A sign in the window can be useful, but be cautious about attracting a stream of applicants while you’re busy in the store. • College/university career events are great places to showcase your unique qualities and recruit top talent. Selling the advantages of an independent store Compete with bigger retailers by emphasizing the wide range of responsibilities that employees will be able to take on in your store. Candidates coming from larger organizations will definitely appreciate the opportunity. • Cool technology and powerful retail tools are a definite attraction for smart young employees. New affordable POS systems using iPads and iPhones will garner interest from sharp candidates by keeping you ahead of the larger retailers often stuck with frustrating, aging systems. • Creating a social media strategy (and sticking to it!) will do the same. Getting candidates involved with your store’s Facebook, Instagram, or Pinterest pages will let them further develop these skills. • Hiring students with several university years still ahead of them is a smart move as well; career-oriented students love the chance to build up their resumes and gain a wide range of experiences before they hit the job-market full-time. RECRUITING 6
  7. 7. Finding the right candidates for your store It all starts with the right job description. Often underestimated by retailers, a good job description weeds out the candidates you don’t want, and helps you get applications from the ones you do. • A good example is comedian-turned-streetwear designer and chef-restaurateur Eddie Huang, who sprinkles his job descriptions with references to hip-hop music, like: “People Who Like Pyrex and Cavalli Furs”. Huang knows that any candidate who gets the reference will be the right cultural fit for his estab- lishments.5 • Hot retailer Bonobos’ jobs webpage says, “You’re smart and driven and pretty damn cool. We’re rein- venting retail. Could this be love?” Candidates already know they’ll be stepping into a different kind of store — in this case, one that relies heavily on eCommerce — before they’ve even applied. • Make sure your job description includes: • Who you are • What it’s like to work at your company • Your expectations of employees • What employees can expect of you Referrals — are they worth it? When it comes to referrals, the answer is “it depends.” Referrals are valuable for finding great managerial talent or potential future managers; they provide more assurance that the candidate is trustworthy. On the other hand, for sales associates, you may want to think twice. You don’t want two best friends to be more engaged with each other than with the customers. RECRUITING 7
  8. 8. Getting to know your candidates Screening Screening applicants is a long and tedious process. You have a stack of resumes to get through, and little time. But this process is important; careful screening will save you headaches and wasted time later on. • Focus on the applications showing creativity and attention to detail. These are valuable characteristics in retail. • Poor spelling or sloppy presentation? Ditch them. • Cover letters where candidates focus on the needs of your store demonstrate the right attitude. • If you’re dealing with an abundance of applications, consider an application form with a few screening questions, such as those outlined here by HR expert Dr. John Sullivan. Some examples include: • What job responsibilities do you excel at? • What do you know about electronics/children’s toys/bikes/etc.? • What people, team, and leadership skills are your strongest? • Do you have any supplemental skills, knowledge areas or experiences that we should know about? • Always check local regulatory requirements to avoid discriminatory hiring practices. RECRUITING 8
  9. 9. The interview After you’ve selected the candidates that you want to interview, you’ll need to meet with them. Most independent retailers don’t have much time to spare, so skip to the questions that give you a true picture of the candidate. For managerial positions, behavioral interview techniques work best. Start questions with, “tell me about a time…” For example, “tell me about a time when you had to deal with sales associates not showing up for work.” Or, “tell me about a time you received negative feedback from a customer.” • Find out who was there, where they were, how they behaved and what was the final result. • Look for a demonstration of leadership: Ask specific questions about team dynamics. Get examples of the roles they played within a team. • These types of questions help get away from rehearsed answers, and give a better sense of how your candidate handles different situations and personalities. In many cases, someone who shows excellent judgment may trump someone with more experience. RECRUITING “I have a genuine curiosity for what people do and how they do it. When people aren’t being truthful, probing questions become very difficult to answer.” — Ade Akin-Aina HR specialist and former recruiter for Target 9
  10. 10. For store associates, store-specific, scenario-based questions work best. These should be sales-focused, since this will be their primary responsibility. • Start questions with, “tell me what steps you might take to…” For example, “tell me what steps you might take to sell a suit to someone who has stated he’ll be attending a wedding.” Or, “our store sells five different styles of denim. What steps would you take to upsell or cross sell other items in our store?” • Observe how well they: • Respond to being given sales targets • Think through tasks • Respond truthfully about what they don’t know or understand • Ask questions. They likely have not heard the term “upsell” before — see if they ask about it. Hiring Every employer wants to hire the best candidates. To capture top talent, don’t be shy about selling your business. Tell them why they will be perfect for the job, and how you see them fitting in. Paint a picture of their life in your store. Be careful not to shortcut the process either: resist the urge to hire on the spot and always check references first. RECRUITING “Hire with your customer in mind, and then train people . . . In many cases, a passion for the product will be more valuable than experience.” — Ade Akin-Aina 10
  11. 11. Now that you have hired great employees, you need to keep them. You may be surprised to hear that it’s not all about the cash. A recent study showed 74 percent left their retail jobs “in pursuit of better opportunities,” while only 44 percent said they left for a better salary.6 Challenging and engaging employees, coupled with good training, helps you hold onto the good ones. BUILDING AND MAINTAINING WORKPLACE CULTURE 11
  12. 12. BUILDING AND MAINTAINING WORKPLACE CULTURE Training A clear training plan is your foundation. Sales associates report two times higher job satisfaction if they can meet a customer’s needs.7 The right training ensures they can answer all your customers’ questions, and more. The right training also helps your staff sell more. A recent study conducted in conjunction with a Wharton professor found that sales by knowledgeable, engaged store associates brought in 69 percent more money on average than sales by those who weren’t.8 A clear training plan helps you: • Set the right foundation for all employees to ensure that they understand your store’s vision and values. • Establish accountability for employees. • Ensure proper documentation, so that a store manager or assistant manager can conduct training, if you can’t. In a recent analysis of what went wrong at Borders, business analysts discovered the top store outperformed the worst store by 43 times. Part of this variation could be explained by labor practices. Stores in which employees had less training, greater workloads, and higher turnover performed worse. — Harvard Business Review 12
  13. 13. Your training plan should include: • A clear statement of your core values. Nordstrom’s core value is the basis of their legendary service: “Use good judgement in all situations.” • A structure based on the needs and habits of your core customer. For example, if your pet store provides personalized service, employee training should include instruction on how to access customer information in your computer or filing systems. Alternatively, if your customers generally prefer to be left alone while they shop, employee training should teach staff how to serve unobtrusively. • Training guidelines for the different employee roles in your store, such as new hires, current employees, managers or associates. Don’t forget about employees who have been with you for a while — they need regular training too. Product training Product training is essential to any retail store. As new products are brought in, staff members need to know and understand their features, so they can explain the benefits to customers. The nice thing about product training is that you don’t have to do it all yourself. More often than not, vendors are happy to come to your store in order to educate your team on their products. • Schedule product presentations over breakfast, or over drinks or a meal after store closing. • These are fun for everyone, and usually double-up as team bonding exercises. BUILDING AND MAINTAINING WORKPLACE CULTURE 13
  14. 14. Employee engagement As a manager you need to communicate regularly with your staff, so that small issues are dealt with before they become major concerns. To keep employees interested, stay open to feedback — feeling heard and valued is a key part of employee engagement. One of the best ways to get employees involved is through regular meetings. Managers should stay in touch with staff by meeting with them one-on-one and as a group. These discussions should play a big role in your life as a manager and a leader. One-on-one meetings • Check in regularly with each staff member — as sales performance issues arise or just to touch base. One-on-one meetings should happen every two weeks, or at least once a month. • Meetings don’t have to be a formal affair in the back office — an informal coffee or quick break works just as well, if not better. • Ask what you can do to help them do their job better. Do they need more training on your products? Where are they experiencing difficulties? Perhaps their talents could be better used in another depart- ment, such as visual merchandising at the front of the store or reports for the back office? Make this a two-way conversation. “The value of the team meeting cannot be overstated. Start every day with a team meet- ing, even if it’s just two minutes. It keeps your employees engaged, on target, and in touch with you.” — Karim Kanji BUILDING AND MAINTAINING WORKPLACE CULTURE 14
  15. 15. Team meetings • Even if you are a small store with just one or two employees, start the day with a team meeting. It establishes the day’s objectives, and sets the right tone for the rest of the day. • Whether your meeting is two minutes or 15, have a clear objective. • Team meetings are great venues for ongoing training. Use the opportunity to highlight individual and store goals. Keep it brief: issues you’ve noticed, a new collection coming out, trends, new products or a new sale. • This is also your opportunity to get employee feedback. Is there a better way to organize the storage space? Are certain customers causing problems for staff? Make sure they know that their ideas matter. • The team meeting is the ideal place to recognize people for outstanding performance, in any area. Em- ployees that feel valued are more likely to give more, and less likely to look for jobs elsewhere. • Finally, team meetings let your staff know that, quite simply, you’re there for them. BUILDING AND MAINTAINING WORKPLACE CULTURE For more information on how top retailers are enhancing customer service with engaged sales staff, download the white paper “8 Secrets to Steal from the World’s Best Retailers” from www.lightspeedpos.com 15
  16. 16. EVALUATION Managing employees is about managing expectations. You’ll keep your best staff around for longer if you are clear about what you expect and regularly let them know how they’re doing. Hard data is essential to establishing and following-up on expectations — sales figures don’t lie. On the other hand, retail requires a wide skill set, so numbers shouldn’t be the only thing you consider. Evaluate soft skills, on top of data, when assessing your employee’s performance. 16
  17. 17. Numbers you should monitor weekly, monthly, and yearly include: Metrics on individual performance • Total sales: This is the most important figure and lets you know how well employees are doing on the sales floor • Sales per transaction: Shows how well they’re cross-selling/up-selling to customers • Sales per hour: Indicates how efficient they are with their time • Presence/absences or tardiness: An important sign of their commitment — high absenteeism in your store is cause for concern and should be investigated Storewide metrics • Employee turnover: For accurate assessments of training costs • Length of employment period: Knowing the average employee tenure will help you define your HR strategy Salaries and benefits Salaries and benefits should be in line with or higher than industry standards in your region. You need to be aware of wide variations, however. While most big box retailers start at the minimum wage, the average employee wage at Costco is US$21 per hour, with 88 percent of employees receiving compa- ny-sponsored health insurance10 — typically double the national retail average.11 The average cost of labor was €19,400 per employee in the EU, but wages across the Union vary widely from country to country. EVALUATION 17
  18. 18. When thinking about wages, consider them as part of a larger plan. High wages will attract good candidates, but other factors are extremely important as well. A survey of over 17,000 employees ranked “fair pay” as the fourth most important reason for staying at their jobs. The top ranked reason was “exciting work/ challenge”. 12 Rewards and commission-based compensation Most sales organizations pay their sales force on a commission basis, to incentivize them to sell more. Commissions allow you to control your labor costs. Employees receive a base salary, and their income grows depending on how much they sell. Some retailers prefer not to pay commissions. It’s a lot of work to accurately track sales for every employee for every hour they work. Retailers that make mistakes here can find themselves caught up in ongoing employee or legal disputes.13 Store owners should think very carefully about paying commissions on an individual basis. This can create an environment that is too competitive and negatively affects the employees’ sense of teamwork, lowers employee engagement, and turns off customers. One option would be to tie commissions to the overall performance of your store, instead of individual performance. • In a recent survey of employees on employer review site Glassdoor.com, “America’s worst places to work for,” seven of the 11 companies listed were retailers. Half of those retailers had sales associates who complained about commission-based compensation.14 “Like many retailers with unhappy employ- ees, Books-A-Million [in the number one spot] institutes commission-based pay structures. Perhaps as a result, high stress and low pay were common complaints,” says the survey. EVALUATION 18
  19. 19. Other possibilities There are many ways you can make employees feel valued other than cash bonuses. • Ask your vendors for free products to give to your staff for an exceptional period. This is free advertising for your vendors and a welcome employee reward. • A few simple words of praise for outstanding performance at team meetings goes a long way. Promotions Promoting a top performer may mean you lose a good salesperson. It also, however, shows other em- ployees that hard work is rewarded and may encourage them. Be careful with who you promote. Good salespeople don’t automatically make good managers. Leadership abilities are incredibly important, as are initiative, good communication skills, and how much pride and ownership they show in the store. Trust is another major factor. If the promotion means they’ll handle the keys to your store, be sure that you trust them — a slipup on their part could spell disaster. EVALUATION 19 “When thinking about promotions, consider leadership and people management skills in addition to other talents. Good leaders know how to find other talented individuals and attract them to your orga- nization. They can make your organization stronger in all aspects.” — Anne Mezei HR Executive and Former VP HR at Aldo Group
  20. 20. EVALUATION 20 Performance reviews Regular meetings and good communication throughout the year mean that official performance reviews should not hold any surprises for your employees. It is always recommended that you document the review. Address all training points, expectations, and employee performance comments. This is a great time to think about milestones. • Were targets met? • What concrete steps can be taken for future improvement?
  21. 21. A high staff turnover rate is challenging — challenging for you, challenging for your staff, and challenging for your bottom line. While turnover is an inevitable part of retail, it doesn’t have to be a major burden. Use these best practices to ensure that you hire the right employees, and keep them engaged and motivated. Not only will you free up more time for yourself, you’ll also see bigger profits. CONCLUSION 21
  22. 22. At Lightspeed, we build end-to-end commerce solutions that retailers can use to build, manage and grow their businesses by creating better shopping experiences. We do it by unifying point of sale, inventory management, customer management, and analytics across all channels, in-store and online. More than 21,000 businesses use Lightspeed’s tools to sell over $9 billion a year. ABOUT LIGHTSPEED Start your free trial. Questions? Call us at 1-866-932-1801 or +32 9 221 22 20 22
  23. 23. 1. Heather Boushey and Sarah Jane Glynn. “There are Significant Business Costs to Replacing Employees.” Center for American Progress. Nov. 16, 2012. 2. Krystina Gustafson, “Retail’s Turnover a Plus for Economy but Challenge for Stores,” CNBC. Sep. 23, 2014. 3. Bureau of Labor Statistics, U.S. Department of Labor. “Employed persons by detailed industry and age, 2013 annual averages,” on the internet at http://www.bls.gov/cps/industry_age.htm 4. Jonathan Reynolds and Richard Cuthbertson. Retail & Wholesale: Key Sectors For The European Economy. Institute of Retail Management — Said Business School. University of Oxford: 22. 5. Jasmine Sun. “How to Hire an Awesome Restaurant Staff, by Eddie Huang,” Food & Wine. January 28, 2013. 6. Bob Phibbs. “How to Hire Great Retail Employees.” MasterCard Biz. Sep. 11, 2013. 7. Press Release. “Hay Group study finds employee turnover in Retail industry is slowly increasing.” Hay Group. May 7, 2012. 8. 2013 Experticity Retail Buying Experience Survey. ReRez Research. 9. Krystina Gustafson, “Retail’s Turnover a Plus for Economy but Challenge for Stores,” CNBC. Sep. 23, 2014 10 Zeynep Ton. “Why “Good Jobs” Are Good for Retailers,” Harvard Business Review. January 2012. 11. Kevin Short. “11 Reasons to Love Costco That Have Nothing To Do With Shopping,” Huffington Post. Nov. 19, 2013. 12. Jonathan Reynolds and Richard Cuthbertson. Retail & Wholesale: Key Sectors For The European Economy. Institute of Retail Management — Said Business School. University of Oxford: 25. 13. Kira Lerner. “Macy’s Sales Associate Sues Over Commission Pay Policy,” Law360. August 19, 2014. 14. Thomas C. Frohlich and Douglas A. McIntyre. “America’s Worst Companies to Work For,” 24/7 Wall St. Accessed on Yahoo! Finance. June 23, 2014. SOURCES 23
  24. 24. OTHER RETAIL RESOURCES The Inventory Guide Best practices for inventory management. Increase profits, keep the right goods in stock, and run a better business. Download the PDF > Retail Tech Forecast Find out what technology independent retailres are using in their stores – and how they’re using it to sell more. Download the PDF > The Independent Retailer’s Guide to Buying Inventory Intuition meets data in this free guide to making the best buying deci- sions for your business. Download the PDF > 8 Secrets to Steal from the World’s Most Innovative Retailers Learn the secrets that are fueling success at some of the world’s top retailers, and how you can apply them to your store. Download the PDF > POS Buyer’s Guide Shopping for a new POS? Here are 9 questions to ask to be sure you choose the best one for you and your business. Download the PDF >

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