I like to talk about the value in delivering great customer experiences, but for retail businesses, which rely on store employees to deliver that great experience, it’s just as important to deliver great employee experiences.
I was standing in line at Lowes yesterday when I heard one employee tell another about his five-year award. From the way he described it, it was clear that Lowes, like most companies, recognize service milestones with some sort of meaningless trinket. This exchange reminded me of my own experience after 20 years with Circuit City in which I received an email instructing me to a website where I could choose from five items (ladies watch, mans watch, golf bag, desk clock, luggage), all of which really conveyed how much the company appreciated my service (sarcasm intended).
A number of studies estimate the cost of recruiting, hiring and training an $8/hour to be between around $5,000. At around 70%, retail has one of the highest industry turnover rates and many companies experience rates significantly higher. To put this in perspective, a big box or specialty retailer with 50,000 employees averaging $8/hour will spend $175 Million each year replacing employees. This cost does not include mistakes made due to lack of experience or the cost of lost productivity.
Why does retail have such a high turnover rate? The chief reasons include the obvious ones (pay and benefits), but also include things lack of job security, inflexible work scheduling, fairness, poor communication and lack of recognition. Much of this boils down to failure of store management to develop good relationships with their employees.
Companies invest every day in customer retention. What would happen if the big box or specialty retailer spent some of that $175 Million a year on employee retention? What if store managers could spend less time recruiting new employees and more time developing better relationships with the ones they have? What if, instead of an e-mail telling your employee to select a 20 year award, you and high level managers or executives wrote personal notes to thank the employee for their service. Would consistently great employee experiences lead to great customer experiences? I think so. What things are important to providing a great employee experience? I like these:
- Providing good work environment with clear values and goals
- Ensuring equitable pay and fair treatment
- Demanding results while caring about people
- Giving frequent, direct and honest feedback about performance and opportunities
- Discussing and mapping employees’ careers 18-24 months in the future
What are some other ways to create great employee experiences?