Do You Have an Employee Retention Strategy?
It’s shocking the number of convenience store operators who don’t know how much employee turnover is costing them. They know their turnover percentage, but not the actual dollar amount.
Here is a simple formula you can use. Let’s use an average cost of employee turnover of $2,500 per employee. This is on the low side -- $5,000 is more the average – but even using a low number like $2,500 will more than prove my point why you should have an employee retention strategy in place.
If you employ six employees and your turnover is 100 percent, that’s six employees at $2,500 or $15,000 in turnover costs. If your average gross profit margin on inside sales is 25 percent, you have to increase inside sales by $60,000 ($15,000 divided by .25) just to cover your turnover costs and break even. So, let me ask you a question. What’s easier: reducing employee turnover costs or increasing store sales by $60,000? If it were so easy to increase store sales by $60,000, wouldn’t you already be doing it?
Without an employee retention strategy in place, you’re at risk of losing good employees when the economy turns around and more job options become available. This is already happening. NACS, the Association for Convenience & Fuel Retailing, recently reported that employee turnover for January 2012 was 58.9 percent. 64.7 percent for March and 68.1 percent for June. If your strategy for reducing employee turnover for the past three years has been to simply rely on a recessionary economy, the expiration date on this strategy is about to expire.
Strategy Here is a four-part employee retention strategy that costs you nothing – other than your time.
1. Employee interviews. Just asking employees if they’re satisfied with their jobs isn’t enough. Instead, try this simple but powerful question: What would cause you to take a job with another company tomorrow? This query prompts your employees to share their underlying criteria for job satisfaction, and identifies those elements that are missing. Here’s another question to ask your long-term employees: What is it about working here that has kept you here this long? You’ll start to see a pattern/theme emerge in the responses to both of these questions. Identify the top three themes and focus on making them even better.
2. Transferrable skills. Remind your employees of the skills they’re developing by working at your c-store. Use these same skill sets in your employee recruiting materials and discuss them during your job interviews as well. The following 11 skills are “transferrable skills,” meaning they are applicable to other businesses and industries:
- Customer service
- Customer conflict resolution
- Merchandising and retailing
- Safety and security
- Loss prevention
- Interpersonal skills
By focusing on skill development with your employees, you take some of the attention off of wages. After all, there’s more to a job than just pay.
3. Flexible work schedule. People don’t have two lives -- professional and personal. They have one life and trying to balance that one life is challenging, especially when you have elderly parents to take care of, a sick or disabled child at home, daycare and a part-time job. The ability to offer your employees (as best you can) a flexible work schedule can help you hold on to your employees and gives you a competitive advantage.
4. Fun in the workplace. Almost half of our waking life is spent at work, so shouldn’t it be a place where we can learn, grow, develop and have fun in the process? Celebrating significant personal events such as birthdays, anniversaries, graduations and accomplishments, as well as holidays and store success, enhances job performance.
If now is not the time to implement an employee retention strategy, then when?
Terry McKenna is principal and co-founder of Convenience Store Coaches & Employee Performance Strategies Inc., where he helps convenience retailers achieve greater financial results by optimizing their workforce. McKenna can be reached at (910) 458-5227 or [email protected] He also maintains a blog at www.terrymckenna.typepad.com.
Editor's note: The opinions expressed in this column are the author's and do not necessarily reflect the views of Convenience Store News for the Single Store Owner.