The biggest threat to retail isn’t Amazon. It’s poor recruiting!
Skeptical? Well, look no further than the recent announcement that the famous and profitable Napa Valley restaurant Terra is closing because “we can’t get staff.” If you work in retail, consider this as a “canary in the mine” warning. And even in the cases where poor recruiting is not yet forcing closure, these staff shortages are directly reducing service levels and operating hours. Many blame record low employment, but the real cause is the fact that most retail managers only know how to recruit during times of high unemployment.
Let’s face reality: most retail managers suck at recruiting in a highly competitive job market.
Simple But Effective Tools for Eliminating Your Retail Recruiting Problems
Fortunately, great recruiting in retail doesn’t require a lot of money or even effort. The key to success begins with dropping the current intuition-based historical recruiting approach that becomes ineffective when there is a huge talent scarcity. Next shift to the exclusive use of recruiting tools that have data proving that they work in a war for talent. I have identified the top 12 most effective data-driven recruiting tools for today’s retail environment. They are listed below, with the most effective recruiting approaches listed first.
- Referrals are best — Your best employees already know and hang around with many others who also work in retail. Those interconnections make referrals the No. 1 most effective recruiting tool. The key to referral success is directly asking each of your top-performing employees to identify, assess, sell, and then recommend at least one quality potential recruit each month. To encourage referrals, offer a reward for each referral who is hired (usually a book of free movie tickets or up to $100 in a cash bonus). Also, give every employee an “exceptional service referral card,” so that they can give them to any top retail employee who they meet during their everyday interactions with retail people. Provide direct feedback to employees after they make weak referrals.
- Boomerangs are a known quantity — Rehire former top employees. Because retail traditionally has a significant turnover rate, it’s common to lose employees for a variety of reasons. Fortunately, there is a high likelihood that some of your top-performing former employees would love to return when their conditions change. They are great hires because you already know their performance and that they fit with your culture. Periodically reconnect with your best former employees to determine if they’re willing to return. If they can’t, still ask them to become referral sources.
- Spread your employer brand on social media — You can get many more referrals and other hires if you make your employer brand image highly visible. Let managers and employees know that they are expected to spread positive stories about what it’s like to work at your firm among their friends and connections on social media. Start by identifying which of your employees are well-connected on social media. The next step is for the management to develop a story inventory covering the most exciting aspects of your firm. Include stories about new technology, employee successes, and innovative products and services. Continually provide your employees with these compelling stories. Also, consider rewarding an employee with a $25 Starbucks card whenever any new hire acknowledges that they found out about your firm from one of the employee’s social media posts.
- Treat other retail as your farm team — Recruiting becomes much easier once you realize that there is an abundance of talent working at your competitors that are located within five miles of your facility. And fear not about ethical or legal issues. Because employees are not owned, no issues arise when you convince a competitor’s employees to leave for a better opportunity. Also, remember that every firm makes it a standard practice to steal their competitor’s customers, and that raises no ethical or legal issues. Top talent working at other top firms are superior, because they are fully trained, and they have already proven themselves. And this means that if your own firm provides a superior work environment, it’s relatively simple to convince the best retail employee at your competitors to join your team. Further action steps include encouraging your employees during their search for referrals to proactively identify at least the names of the best who are working at nearby retail. But also ask your new hires during onboarding to identify the best employees at their former retail firms. In particular, look for recruiting targets at competitors that provide “white glove service.”
- Recruit your customers — Some of the best recruits (your customers) probably visit your retail facility once a week. Your best customers make great recruits because they already know and like your firm and its products, and they are unlikely to have commute issues. If you have a customer loyalty program, start by using it to identify potential recruits. For other customers, let them know that you frequently hire customers, by putting a sign inside your facility. Rather than the hideous “help wanted” instead place a sign that reads, “If you like shopping here, maybe someday you’d like to work here.” In addition, ask employees to wear a “Ask me about what it’s like to work here” button or T-shirt to encourage inquiries. Your manager should approach good customers one on one. And over time convince them to apply or ask them to make referrals. Let customers who are potential hires know that they get a significant discount as an employee. Wells Fargo even once printed a “Are you looking for a career?” hiring note on its ATM receipts for all customers to see.
- Use references as a referral source — When you call the references of a potential new hire, also ask them “Do you know anyone else who is at least as good?” If you end up hiring a reference referral, be sure and call and thank the reference and then ask them if they would be willing to continue to make referrals. You can also give some free products to the reference whenever you hire a referral from that person.
- Same-day hiring – In a highly competitive job market, it’s a major mistake to let a top candidate leave without getting a “yes” from them. This means that hiring managers must learn to make assessments quickly (especially when the candidate is a referral or customer) and to make an offer to a top candidate immediately after an interview.
- Power selling is required — In a tight job market, managers must become experts in selling candidates. Make it a standard practice to ask top candidates “What do you need in order to say yes?” And then develop a sales approach that shows that you meet each of those “attraction factors.” Also use peer interviews, because coworkers are almost always the best at selling candidates. Consider providing top candidates with a sign-on bonus or an exploding offer (g., a decreasing bonus if they delay their decision) to encourage them to make an on-the-spot decision. Also, realize other factors like scheduling and growth opportunities are often key attraction factors.
- Target those who seek supplemental income – Not everyone wants a career in retail, but there are many in our society who are seeking supplemental income. Target community groups made up of the retired, those on military pensions, the disabled, and stay-at-home spouses. In order to get them hooked, you may have to offer them part-time work that precisely fits their schedule initially. Also, consider offering them 25 percent to 50 percent higher pay if they’re willing to work during your critical peak time periods.
- Revisit silver medalists — Periodically revisit “silver medalist” candidates (those who came in second) from a previously open job. You already know them and their interest. And after a 6- or 12- month delay, they are now likely to be more skilled and experienced.
- When hiring, also focus on retention — Hire people who have a high probability of staying at your firm. A primary key to retention success is to avoid hiring people who “put money first,” because these individuals are likely to leave immediately when another firm offers them even a small amount of higher pay. So, ask top candidates to list and rank their “attraction factors,” from the most important to the least important. And then be cautious about hiring individuals who put compensation first or second on their list. Re-recruit new hires every six months in order to re-energize them and to identify any potential retention issues.
- Additional effective approaches — There are some other recruiting approaches that you should consider. Start by working with community and veteran’s groups and even churches to identify new residents who might have a family member that needs a job. Also consider hiring a top candidate and a friend at the same time, because working alongside a close friend may be a key attraction factor. Also, reconnect with top candidates who dropped out of your hiring process to determine if their situation may have changed over time.
Things to Stop Doing
In addition to adding new recruiting tools, hiring managers should stop recruiting the “traditional way.” Those dated approaches simply won’t work in times of extremely low unemployment. That means putting a low priority on newspaper ads, job fairs, and large job boards. Also, be careful about putting up large external “help-wanted” signs. They might send a message to potential candidates that you are desperate, and it might also scare away some customers who may fear you may be understaffed. Avoid stretching out your interviews over many days, and don’t spend 100 percent of your interview time assessing. Instead, spend at least half of your interview time selling your top candidates.
The Best Retail Firms to Target
If you have the necessary courage to target other retail firms for recruiting directly, start with chains that are known to have excellent initial recruiting and excellent employee development. In my research, I have found that you can best find high-quality retail employees and managers working at firms like The Container Store, Costco, Apple stores, Starbucks, IKEA, Trader Joe’s, Publix, Whole Foods, and In and Out.
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The Competitive Hiring Advantages of Small Businesses
Retail giants like Starbucks and Walmart are so desperate for talent that they are going as far as offering a free online college education for their employees. Fortunately, it’s not necessary to resort to these expensive options, provided that merely realizing that the key to recruiting success is the tools that you use. Be aware that your initial selection of recruiting tools can only get better if you make it a standard practice to collect data on which tools do (or don’t) produce the best candidates and top-performing hires.
If this article stimulated your thinking and provided you with actionable tips, connect with me on LinkedIn.