There are two coffee shops in my neighborhood: a Tim Hortons and a Dunkin’ Donuts.
The prices at both are pretty much the same. The food is different - if anything I prefer Dunkin’ Donuts. And yet, I got to the Tim Hortons every morning.
Why? It isn’t the advertising or the price or the food or any of the “big picture” decisions that CEOs or the marketers make. It is because the Tim Hortons’ staff is incredibly friendly and always gets the order right, while the Dunkin’ Donuts’ staff is both forgetful and, while not rude, certainly not particularly engaging.
The difference between the two stores is not how they market, how good their food is or their location, but the $9-an-hour employees who work there. And the truth is, at many of America’s businesses, low-paid, hourly employees are literally the face of them, i.e. the people that the customers primarily interact with.
Attract Great Workers At All Levels
If any company wants to truly differentiate itself, it needs to make all hires a priority. And that means having both a strong magnet to attract strong candidates and a standardized hiring practice that ensures good results.
First, the magnet. What are these low-paid workers looking for? A recent study by Business Insider found that younger employees, i.e. most of the people who are applying to these jobs, still value money over everything else. So paying a dollar or two more an hour is still the best way to become more desirable.
Along those lines, it is crucial to have some sort of management-training session available to these workers, so they can move up. The Wall Street Journal reports that promoting from within is far preferred by CEOs and cheaper than hiring someone from the outside and it provides a desirable carrot to workers. A program like that can also greatly reduce turnover.
That sounds good, but for many companies, they are looking at bottom line costs and wondering how they can afford a dollar or two more an hour or a management-training program. Well, Society of Human Resources Management (SHRM) also reports that replacing just one $8-an-hour employee costs $3,500 alone, so an investment that will improve employee retention is well worth it.
Also, improving customer service – which most of these hourly jobs involve – directly increases customer retention, and just a 2 percent increase in customer retention has the same effect as cutting costs by 10 percent, according to Emmett Murphy’s book Leading on the Edge of Chaos. And finally, better employees mean less employee theft, a $50 billion problem in the US, according to statisticbrain.com.
The Most Important Step
Okay, so you’ve increased what you are paying your hourly workers. That will help get more applicants, both good and bad. So how do you make sure you hire just the best ones?
Well, we look at Google, which is probably the leader in having a data-driven hiring process (their story is outlined here). But for an example of hiring hourly workers, just look at K&N Management, which runs eight fast food restaurants in Austin, Texas.
K&N advertises on its website an $11-an-hour salary for its workers, very high for the generally low-paying south. But they also make the same investment into HR technology to screen through its 3,400 resumes it gets each year for roughly 200 positions, according to SHRM.
The screening tools allow K&N to centrally manage its hiring process at all of its restaurants. Its screening software also quickly identifies the best people, so those relatively-high salaries are well spent, according to SHRM.
“We can see at a quick glance if the person is a good fit for the position, and it also makes the onboarding side much easier,” K&N Hiring Manager Danielle Robinson told SHRM.
Donna Desilets, the vice president of Gregg Appliances Inc, agrees. Desilets also uses candidate-screening software to centralize hiring at her organization, as she was responsible for hiring roughly 5,000 hourly workers last year at 200 hhgregg appliance and electronics stores, according to SHRM.
“Because HR is centralized and the business is decentralized, it is helpful to have that tool for the hiring manager,” Desilets told SHRM. “There is a consistency factor, since everyone is taking the same assessment. Combined with the interview guides, it gives hiring managers a greater level of confidence that they are selecting the best employees.”
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