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From Home Furnishing Business

Editor's Letter : Legal EASE?

Think about it, after all; retail has amazingly long hours, little thanks, sometimes finicky consumers.

That’s a lot to take without a love for helping people create welcoming homes.

Several conversations with retail friends have all led back to the frustration that legal topics and issues bring into their businesses. Staying abreast of changes in regulations impacting business owners is more than a full-time affair—there are hour and wage regulations; safety regulations; truth in advertising regulations and the list goes on and on.

Hint at the possibilities of a lawsuit over copyright infringement from a competitor or supplier and some retailers may break out into a body-coating sweat. Heaven forbid a legal squabble with a consumer who happened to break her arm and injure her rotator cuff when she stumbled over a low-profile cocktail table while she was admiring great artwork on the wall. (True story, by the way, that cost a retailer a good chunk of change in lawyer and settlement fees.)

In today’s world of hurry-up electronics, smartphones, the Internet and social media, copyright regs get more and more murky and indepth. It’s hard to know what is a copyrighted content, images or designs when surfing through Pinterest, Facebook and Google+. When does someone cross the line from sharing and step into copying?

On another regulation front, the industry is having to reevaluate the use of flame-retardant chemicals in upholstery and bedding. I remember stepping into this industry nearly 20 years ago when the debate over flame retardants was raging as to should we or shouldn’t we use such chemicals in home furnishings to prevent fires.

Today’s research shows the chemicals could leach and result in ill effects to people. Back in 1994, there were folks in the industry who stood firmly against  such treatments for the very reason of the unknown human impact of the chemicals. California—the state with some of the strictest regulations­­—is currently leaning toward changing its standards on chemical treatment for upholstery. Typically, as goes California, so does the rest of the Union.

It’s enough to make one’s head spin, and it’s not easy.

The legal aspects of running a retail business seem more complicated than our country’s tax code. Thankfully, there are lawyers in the world who understand the ins and outs of legal matters that mean the most to retailers.

Inside this month, we take a look at a few of the legal issues retailers face on a regular basis. By no means did we delve into every single law or nuance that you or your colleagues have to worry about. THAT would take some doing.

My advice?

Read the issue, and take some notes. Voice your concerns with your legal counsel. Make him or her a true business partner that you consult on a regular basis instead of only in times of legal crisis. You’ll be glad you did.

Happy reading.

Publisher's Letter: Employee Management

My second position was with a client that I worked with by way of the Fortune 500 that asked me to come to work for them. It was a dedicated third-party logistics provider that was privately held and employed just over 120 people. Less structured than my previous job, but attempting to become a “real” company.

This brings me to my present position as publisher of Home Furnishings Business. A team of five, the majority of us work from home, with some support from our parent company.  Each company has had its share of pros and cons, but each was driven by the fact you must have good employees to deliver on the promises you make to your clients.

At one time or another with each place I have been employed, I have hired, fired or have been counted on to keep morale up within my group of employees. I know the old saying, sh*t floats downhill but it amazes me how quickly a senior manager will run when such tasks come up.

Right or wrong here are a few things that I have learned along the way. 
When hiring, don’t try to just fill a vacancy. Use this time to find an “upgrade” and find someone that will work well within your team. If you hire a person that is motivated, smart and has a good work ethic, you can train them on the necessary skills to help them be successful in the position. They will grow into the role. Don’t rule out hiring from outside your industry, sometimes a fresh set of eyes, ears and ideas is what the position needs as a jumpstart. Explain what is needed for them to be considered successful and supply the tools to make that happen.
Firing, this is a tough one for most people. In today’s world of documenting potential issues, problems and inch-thick personnel files, it’s my thought that a person has a pretty good idea which path they are on before the firing takes place. If you have completed your supporting documentation and included it in this file, you should have no concerns about your next step. You have outlined what was needed for that employee to be successful, and they have not reached those goals. Lose no sleep when terminating an employee; you’ve had discussions along the way about performance issues and addressed this with each item that was put in the file. Cut the cord and move on, your team will be better for it.

Happy employees are more productive employees, but keeping employee morale up is a difficult task. Management needs to keep an eye on morale. Good employers will make sure an employee is feeling  happy and secure in the position, so they can focus on doing their job and not have concerns about the “what ifs”. It’s a fact that an employee will be more productive if they feel good about the company. Remove any doubts employees may have, and you will be rewarded by them. Be sure to acknowledge employees for the effort they give. Celebrate the wins and always be sure to include families in your celebration. The family may not be on your payroll, but they are a vital support for your employee. It’s important for family members to feel included and part of your team. 
This issue of Home Furnishings Business delves into these topics. Take a moment to read it and learn from others who are much more seasoned than me in what makes a successful team in the furniture industry. I’m sure you will walk away with an idea or two that will help you become more successful and create a team environment that will exceed your expectations.

Obamacare’s Impact a Question Mark

The jury’s still out on the impact of the Patient Protection and Affordable Care Act, better known as Obamacare, on businesses.

Jill Benson , an attorney specializing in employment issues in the Greensboro, N.C., office of Womble Carlyle, noted that employers will have to provide coverage in companies with 50 or more full-time employees. The next big deadline is March this year to give notice to employees, but that could be pushed back.

“It’s not clear yet what minimal essential coverage will be,” Benson said.

Taylor Ganz, vice president of finance, planning & administration at Profitability Consulting Group, said he’s spoken to a number of retailers who are reducing some full-time positions to part-time; and all part-time positions to 28 hours a week or less in order to reduce the number of employees they must cover in a health insurance program under the law.

“Some are raising prices, but they should be raising prices anyway,” Ganz said. “Up to now, a healthy benefit package has been a useful retention and recruitment tool, but because of the uncertainty around the new regulations it’s unclear how many retailers can offer the full level of benefits. … It’s the uncertainty about the law’s mechanics.”

With a huge number of retail associates spread over its Thomasville store network, Furniture Brands International has stayed abreast of health-care reform developments, said Beth Sweetman, senior senior vice president of human resources.
“We’ve been on top of health care reform for a couple of years, and we already comply with the legislation—we know what’s coming,” she said. “For us I think it will be an attraction and retention tool. Benefits are a significant spend for Furniture Brands, so we watch that carefully.”
Susan Brashears, at Brashears Furniture in Berryville, Ark., doesn’t expect much impact from Obamacare on the retailer’s benefit packages.
“We were already providing insurance for our people, and we have under 50 people,” she said. “We actually got a small rebate back from our health insurance company last year.”

Casting Call

It’s been almost two years since Home Furnishings Business took a look at hiring, and a lot has changed in that time.

Last time we addressed this issue, the economy was digging out of recession. Now, business is on the upswing for most furniture stores compared with first-quarter 2010, and the general economy is in far better shape.

The gist is that while hiring for jobs in furniture stores isn’t the seller’s market it was a couple of years ago, retailers looking to expand their business had best maintain good hiring practices to ensure the associates encountering customers and the back-of-house personnel processing and delivering orders are up to the challenge of servicing an uptick in business—now’s no time to skimp quality hires.

It boils down to making hiring and talent scouting a process, versus a reaction to meet an immediate need.
“Recruiting is a job that should be carried out 365 days a year regardless of whether you have a position to fill,” said Taylor Ganz, vice president of finance, planning and administration at retail consultant Profitability Consulting Group. “There are two reasons: First, every organization has its dead weight whether it’s a mom-and-pop with nine employees, or a Top 100 (retailer) with 700. You should always look to upgrade the weakest talent on your team.
“The second reason is at some point, you will lose an indispensable, can’t-live-without member of your organization. It’s not a matter of if, but when.”
Your employee might get another job opportunity, a spouse might get relocated, they might be in a snowmobile accident—you name it.
“If that’s when you start scrambling for a replacement it’s too late,” Ganz said. “The most important part of leadership is developing a deep bench.”
Constant awareness of people who could make your business better is key to that constant search. Joe Milevsky, CEO of consultant JRM Sales & Management, suggests that retailers always stay on the hunt.
“I had a client who was at a convenience store, and the employee went so over the limit of what they had to do that (the client) offered a job,” he said, adding that the new hire ended up a top salesperson.
Go hunting in malls, women’s stores, shoe and clothing stores.

“I’m not going to overtly steal that person,” Milevsky said. “I might say ‘I’m looking for someone with interpersonal skills like yours. Do you know people with skills similar to yours?’ … You have to physically get out and do it.”
Look at your personal network: “People have all these great associations—church, civic groups, maybe even the golf club—but they never think to ask,” Milevsky said. “I’m always looking, always interviewing. Someone comes into the store asking about a job, whatever I’m doing I take time—if they took the time to come in, I’ll see them for at five minutes at least, maybe set up a more formal interview for later.”
All that helps retailers build a tickler file of prospects so that when they need to hire, they have a plan in place versus reacting to an immediate need.
Ask customers.
“If they like the store’s environment, they might feel they want to work there, but don’t have the experience,” Milevsky said. “If the retailer has the ability to train that person, customers are one of your best potential sources.”
And when you must make a change among current personnel, building a pool of potential talent eases the burden, noted Ganz’s colleague at PCG, Rene Johnston-Gingrich, vice president of training and development.
“It makes these difficult changes that much easier knowing you have a pool of people to draw from,” she said.

“In terms of sales help, one of the last things I’d do is placing an ad,” Milevsky said. “Word-of-mouth is very important—you can incentivize employees for successful hires.”
Ganz suggests including words to the effect of “if you’re interested in a great opportunity, call …” on the back of all your associates’ business card so they can pass those out when they spot potential talent when they’re out and about.
“If you see people you think could help your operation, give them a card whether you have an opening or not,” he said.
Thomasville Home Furnishings stores utilize an employee referral program, said Beth Sweetman, senior senior vice president of human resources at Thomasville’s parent company, Furniture Brands International, St. Louis. Current associates get compensation for referring new employees that stay.
“A referral from an employee who knows the person and what they can do usually ends up being the best fit,” she said, adding that the chain is working to improve its managers’ ability to reach out to potential talent. “We’ve learned that our store managers need training on basic networking to keep a constant flow of possible employees ‘in the hopper.’ We’re developing networking training, because getting out in the local community is the best way to build a pool of talent. We aren’t there yet, but we’re working on it.”

Job boards, and particularly the business-oriented social network LinkedIn, are other channels that furniture retailers are utilizing to build their talent pool.
“Over the years we have tried all the traditional methods but recently we have been successfully using,” said Susan Brashears, an owner at Brashears Furniture, Berryville, Ark. “It is very effective in our region. You can manage your account daily. That means being able to modify the ad if you’re not seeing the response you want, and also being able to respond to candidates the same day they apply. In addition, it is very affordable.”
LinkedIn has turned out well for Thomasville’s store recruiting.
“That seems to work more effectively for us than the national job boards, though we’re on all of those, too,” Sweetman noted.
And while Fairborn, Ohio-based Morris Furniture’s most effective leads are associate referrals, Dan W. Little, human resources manager, said the next most effective is ads posted on Internet boards.
Morris also is exploring social media and have done some sourcing via its Facebook page.
What does not work at Morris?
“We have had no success recruiting for sales at local job fairs,” Little said. “The challenge is overcoming objections to commissioned based sales. This is an ongoing effort for us.”
Wherever you’re looking, always keep in mind that you cannot always hire accomplished “winners” out of the gate, said David Markowicz, vice president of human resources, Jerome’s, San Diego.
“That can be expensive, but you can train and develop the new hires into winners if they have the right attitude and a high level of enthusiasm,” he said. “So focus on hiring strong entry level people and then have a plan/program that will develop/mold them into what you want them to be.”

Different departments demand different skills, but retailers contributing here differ on their hiring approach for specific functions.
Thomasville, for instance, views hiring pretty much the same way for any position, said FBI’s Sweetman.
“The way I look at it hiring is hiring,” she said. “Prospects all go to the same places, national job boards, LinkedIn groupings, so you can get an idea of what positions they’re looking for.
“As we’re hiring the younger generation, that’s where they’re going to look. Our hiring process is the same across job functions.”
Morris Furniture looks for sales position candidates through referrals and the Internet.
“For sales positions, we do not limit our search to just applicants with past sales experience,” Little said. “Many candidates without sales experience can be molded into top sellers. We have found that some past candidates with sales experience had selling strategies or customer service attitudes that were not conducive to our team oriented showrooms. When screening an applicant we look for skills we can’t teach—integrity, work ethic, teamwork. 
“We generally do not run print ads for sales positions with the exception of a store opening. Sourcing via the Internet creates a steady flow of applicants who are Internet savvy.”
When Morris is opening a new store—the retailer has a new Ashley Homestore location on the way—the retailer adds “Now hiring” information tags to print sales advertising, and uses signage at existing stores. A similar message appears on press releases when applicable.
“We have had a high success rate with internships for local college students,” Little said. “Almost a third of our interns eventually came on full time after graduation.”
He added that for entry level and delivery positions, those are areas where print seems to do as well as the Internet in generating candidates.
When examining candidates for particular positions, fit the skill set and the personality set to the ideal you have in mind for that position, suggested Rene Johnston-Gingrich at PCG.
“It’s a little like Internet dating,” she said. “What’s your ideal, what are your must-haves, and what are the deal-breakers?
“During the selection process, do the work—that lessens the chance of hiring the wrong person.”
Is there an applicant with strong organization skills and willingness to take direction but whose interpersonal style might be lacking? Think back-office or warehouse versus the sales floor.
“Most people can be trained, but don’t try to fit a square peg into a round hole,” said PCG’s Ganz. “Look at their skill sets in previous jobs where they were successful, and whether they can transfer that to your operation.”

OK, you have a pool of potential talent for your store, and you’re “open to buy.” Following are things to watch for during the interview process.
“There are two things I can’t teach. The first is interpersonal skills,” Milevsky said. “If I think I can change someone that momma and poppa couldn’t change, I’m probably making a mistake. Do they like people, do they have the ability to listen, do they have ethics and morals, how do they see themselves?
“Second is their internal motivation.  … I can demotivate someone, but the motivation itself to succeed has to come from within. I can provide a great environment that encourages them to succeed, but I can’t make them succeed.”
Watch for red flags during the interview, said Ganz and Johnston-Gingrich at PCG.
“I was interviewing someone once, and she cursed,” recalled Johnston-Gingrich. “Nothing huge but she did it so casually, and I recognized a lack of professionalism. … She was also talking about a conflict situation at her previous position, too, which was a bad sign. She charmed me the rest of the interview, though. I hired her but ended up having to fire her.”
Ganz has two very important words: resume gaps.
“Anyone can give you a resume and fill out an application, and if they list someone as a reference, they can generally count on (a good word),” he said. “What you have to do is look for employment gaps. Say they had a position from 2002 to 2004; and another from 2006 to 2008. You want to know what happened between 2004 and 2006.
“In today’s economy, people aren’t afraid to say they’ve been out of work, but if there’s a gap, you still want to know what they were really doing. If they were unemployed, you can ask what kind of job did you look for; what did you do to occupy your time; what were your job-hunting strategies?”
That can give you an idea whether they were showing initiative, or just sitting around collecting unemployment.
And above all, check those references, and beyond that, perform adequate vetting of the people you’re considering for interaction with your customers.
“Looking at our clients … they often miss one gigantic step, and that scares me—they don’t vet properly,” Milevsky said. “When they don’t do that I see a lot of mistakes that lead to (termination).
“Background checks, I had one client with an applicant that gave a false Social Security number. Today it’s so easy to check all that information—a day or two versus a week or two.” 

Inset Story

The Legal Side of Hiring

Jill Benson, an attorney specializing in employment issues in the Greensboro, N.C., office of Womble Carlyle, has advice for furniture retailers who want to make sure their hiring practices meet legal requirements.

She noted that the Equal Employment Opportunity Commission has new rules for background and credit checks of job applicants, and documentation is essential.

“Most employers and retailers conduct criminal background checks for their employees,” she said. “The EEOC issued an enforcement guidance in April 2012 (governing hiring practices).”
Is your employment application up to date with current applicable language?
“Update your employment applications to say, ‘have you been convicted’ versus ‘have you been arrested,’” she suggested as an example. “Make sure there’s a disclaimer to the effect that if you answer ‘yes’ to a conviction or arrest, it does not automatically disqualify the applicant from employment.”
Look at your policy on background checks.
“For example, employers cannot have a blanket policy that they don’t hire convicted felons,” Benson said. “It’s perfectly legal to conduct a background check on a new hire. However, make sure you are considering the nature and gravity of the criminal offense, when the conviction occurred, and how it relates to the job in question before making any adverse employment decision. You can consider convictions, but not necessarily an arrest. And how does the conviction relate, if at all, to the job in question?”

The Legal Side of Hiring
She suggests that employers weigh the factors, and make sure there’s no blanket policy or prohibition against convicted felons.
“You don’t see many problems at the hiring stage unless you unlawfully discriminate—and it doesn’t have to be intentional,” she added. “Every company should have an Equal Employment Opportunity policy.”

People Savvy : Retaining the Right People

The boss!

The relationship usually begins with fair pay and adequate benefits that are the cornerstone of a successful company in recruiting and retaining committed workers. If you provide a living wage for your staff, you then have the luxury to implement additional motivation tools. Without the competitive compensation, you risk losing your top talent.

Once you have pay and benefits in place, then it all falls under the manager. People normally don’t quit the company … they quit the boss. In the past, managers predicted the most vital motivational aspect of work for people was money, although personal time and attention from the supervisor has been cited recently as most rewarding and motivational for them at work.

Feeling valued by a supervisor at work is essential to employee motivation and positive morale. Your words, body language, expression on your face telegraph your opinion of your staff’s value.
Your arrival at work sets the mood daily. Smile. Walk tall and confidently. Walk around your workplace and greet people with sincere good mornings. Mornings can be the hardest part of the employee’s day. They are fighting off fatigue, have trouble focusing and getting excited. Offer fresh brewed coffee to help start the day. Not only will they be grateful for the caffeine, they’ll be more productive throughout the day.
Ordering pizza or taking the staff out to lunch occasionally keeps spirits high. Socializing without worrying about the bill puts them in a good mood and helps them enjoy their work environment and colleagues. Get to know them. Ask about families, hobbies and interests. They will appreciate it. People are often motivated by camaraderie. People don’t want to come to work to fight. It is important to understand employees’ basic desire to work collaboratively … a fundamental goodwill.
Treat them with respect. Use simple, genuine, powerful, motivational words such as please, thank you (and hand-written thank you notes), you’re doing a good job … ask about their day off … recognize birthdays, anniversaries and personal accomplishments to demonstrate caring and value.
Always remember a satisfied employee knows clearly what is expected from them daily. No surprises. Hold individual weekly meetings with staff to discuss progress and upcoming expectations. Consistent communication is the key. Establish employee recognition programs to acknowledge notable contributions and to incentivize others to improve.

Challenge them. Whenever you task an employee with a project, you want them to succeed. Be aware that if you only give assignments/goals where success is assured, you’re hurting yourself in the long run. If your associate is not going to learn something, the assignment/expectation you gave likely wasn’t robust enough. Pushing people out of their comfort zones allows them to develop new skills. Control, creativity and challenges in their work inspires motivation.
Continue training them to stay up-to-date with trends in their field. Enroll them in seminars, have them read relevant books/articles and discuss the content. Keep them fresh and inspired.
The ability of the employee to speak their mind is another key retention factor. Do you solicit ideas and provide a comfortable environment for honest feedback? Ensure that your open-door policy is meaningful. Conduct periodic employee satisfaction surveys. Be sure to address any issues you uncover promptly and thoroughly to avoid losing staff for good. The perception of fairness and equitable treatment is imperative for morale.
In short, when word of your company culture gets around, it will significantly improve retention and make it much easier to recruit the most talented workers in the job pool. 

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