From Home Furnishing Business
Recruit a Dream Team
By: Tom Zollar
In a recent article we talked about the fact that it is the owner and manager’s responsibility to find and develop the right players to make a team successful.
While having a great coach is critical to success in any performance related endeavor, the players—or the salespeople—really must make things happen in the game. Therefore, the process of recruiting key employees is highly important to an organization.
From a sales perspective, recruiting is an integral part of the larger process of staffing a store to provide the best experience for consumers. Recalling our discussion about missed opportunities in the February issue, if a store doesn’t have proper staffing levels, it will never be able to maximize the customers’ response to what it offers.
Staffing and recruiting go hand in hand to guarantee a store has the right people, as well as the right number of people.
Staffing is the process of planning for the needs of an organization in each department or business area. As Jim Collins calls it in his book Good to Great, this is defining the bus and all of the seats. It involves several important processes including: organizational development, organizational charts, chain of command design, and job plans and descriptions. Without going through this process first, the chances of successfully recruiting and hiring the right people within a business are not likely. A complete compensation program for each area also needs to be appealing to those targeted for hiring.
One of the most critical functions in retail is determining personnel needs or staffing levels for the sales floor and reviewing or reacting each month to changing situations and demands.
A common question I get is—how many sales people do I need? The response is usually—how much business do you want to do?
In truth, this is the most basic consideration. In this case, people are money. The simple rule-of-thumb approach is to divide targeted sales volume by a store’s historic average or its targeted, sales per staff member. As an example, a store has an eight-member sales staff that sold a combined $4.8 million last year. The average per person was $600,000. Based on a market analysis, the store has the traffic and share potential to do $6 million this year. Simple math says the store needs 10 full-time sales associates to hit the goal.
The store could try to get its current salespeople to increase average sales by 25 percent to $750,000 each. That, however, is unlikely to happen.
While the correlation between the number of salespeople a store has and the volume a store can do is undeniable, it is not the right way to look at staffing a sales floor. The real question is: how many people can handle and still deliver the required service level customers need to have in order to maximize the shopping experience?
This is the most critical number for retailers to know because it is the only way to properly match staffing levels to the traffic levels. Without it, retailers run the risk of being understaffed and allowing salespeople to drink from a firehouse. Of course a store could also end up over-staffed in which case it will become hard for good people to make a living. If that happens, the best ones always leave first.
For the record, most stores tend to be understaffed, since the sales people constantly resist any additions to a sales team.
We also must understand that this number varies greatly by store based on products and services offered. Here are some general guidelines based on experience:
Store Profile Ups per Month per Associate
· High velocity, low-to-medium priced, no sold orders 140 to 180
· Low-to-medium; some sold orders 120 to 140
· Medium-to-upper; heavy sold orders and some design 100 to 120
· Medium-to-upper; heavy design and some in-home 80 to 100
· Upper with mainly design and in-home 60 to 80
Of course it will also be different for each of salesperson based on selling style, design skills and personal pace. However, the historic average per associate is what should be used to establish staffing levels. Once that’s determined, it becomes a matter of establishing expected traffic levels and dividing it by this number. In other words: if the sweet spot for monthly salesperson ups is 80 to 100 and a store normally gets 1,000 ups per month, then the store will need a minimum of 10 full-time sales associates to properly serve customers.
After reaching a targeted staffing level, retailers should constantly track, review and rate employee performance to make decisions on future needs. If a staffing change is needed, recruiting the best available talent is imperative.
Recruiting is the process of finding the best candidates to fill vacant or soon-to-be vacant positions. It is the ongoing part of the process that Collins refers to as “putting the right people in the right seats on your bus”. Once roles are defined and people are in position, inevitably some of them will need to be replaced or additional staff will be needed to accommodate growth.
One of the most active areas of turnover in retail is on the sales floor. It is so active and so important that recruiting selling staff should be a constant, ongoing effort.
Keep in mind—recruiting is not an event, it is a journey. You need to train and coach managers to constantly search for talent in the community. Many of the best have special recruiting business cards they give to waitresses, shoe salespeople, clerks, receptionists—anyone they think would make a good candidate for your sales or management organization Drafting the best talent is a key ingredient to building a winning team.
Hiring the right people for the job can be overwhelming. Check out these tips to ensure you don’t make a hiring mistake.
· First, look within the company for current employees who want to and can step into a new role. It is amazing how much talent already exists in an organization. Don’t pigeonhole. Most want to grow and evolve, so if you they aren’t offered an opportunity to grow, the good ones eventually leave to find growth elsewhere. We have seen many top salespeople come out of the office, customer service and yes, from the warehouse and off the delivery truck. Always start recruiting efforts from within.
· Set up ongoing programs within the organization to recruit customers, friends and others through current employees. This is a great way to find talented and interested prospects. Most successful retailers have a reward or bounty program that pays a bonus to employees who recruit new people to the company. Teach employees the words to use and coach them on driving home the message. If a customer seems to enjoy the process, a salesperson could broach the subject of employment.
· Always have in-store and exterior recruiting signage to encourage walk-in candidates. This is the most cost-effective way to generate candidates. Place signs in visible places such as by the street, near the entrance and at the sales counter. Make sure the message is specific, exciting and positive. Something like: “Looking for people that want to have fun helping clients create beautiful homes. Join our team and grow with us.”
· Consult with other retailers, local businesses and vendor sales representatives about potential candidates. Good people who want to develop and evolve are highly visible to the people they interact with. Always share needs with reps and other business people. Ask them to let you know if they meet anyone that would make a good candidate for your team. Your local Chamber or any other business organization is a great resource, use it.
· Local job fair participation if applicable, along with connecting with local colleges or organizations that might provide access to prospective employees. Most people at these events or coming out of college do not look at retail as a career. However, present the case for your company as a potential long-term growth opportunity, you have a good chance of finding some interested candidates. Some great retailers, including City Furniture, have been successful in recruiting talented and motivated long-term employers from local colleges. Don’t disregard this potential source if it is available to you.
· Personal recruiting by management within the community at other businesses like restaurants and mall stores. This is possibly the most powerful opportunity you have, and it is probably the most overlooked too, because it takes a consistent, active effort to get it done. One of the best places to actively recruit new talent is at your local mall. The salespeople at mall stores understand retail, have terrible hours, earn less than you are probably going to pay them and have little growth potential. Store managers at places like Eddie Bauer and many shoe stores are well trained and underpaid. With the cutbacks, most support people have been let go, forcing the manager to do much more work with no extra pay—they are looking.
· Online recruiting sites and service providers like Monster.com, Indeed.com, etc. are good resources for finding sales and management. Some charge fees, but they will work with you to help maximize return. Learn how to search and review resumes to whittle down the ones to follow up. It’s easy to create a great resume today. Be careful or you will end up wasting a lot of time.
· Advertising in local markets for prospects is still an option although to do it right can be costly. One efficient way to share your message is to include a hiring statement in all your ads. If you run a dedicated recruiting ad, avoid the classified section. The people you want to attract are currently employed and not looking there. Pay a bit more for placement and the rewards will be greater.
· Use a headhunter if necessary. Typically the most expensive option, strong recruiters are effective. National recruiting services are mostly used for management searches, but some retailers have also found experienced designers using them. If you are located in or near a major metro area, then there are often local recruiting agencies focused on retailer needs.
Editor’s Note: Tom Zollar is retail operations practice manager for Impact Consulting where he creates and delivers sales training for retailer sales associates and managers, facilitates retail performance groups, coaches managers and helps retailers grow their business. In other words, he’s our resident coach.