Each year in our Annual Report of the Grocery Industry, Progressive Grocer asks retailers about the issues they wrestle with. Without fail, labor issues, including recruitment, training and retention, are among the chief struggles.
The good news is that retailers, educational institutions and associations are responding. Most notably, grocery retail is attempting to be relevant to a young workforce demanding more than a paycheck.
Getting Them in the Door
What other industry has better recognition among Americans of working age than grocery? From an early age, grocery stores are part of our everyday existence. Yet, to a one, retailers indicate that they’re challenged with finding talent to hire. Clearly, there’s a disconnect between familiarity and allure.
“The industry doesn’t do a lot to make itself” attractive, says Robert Paul Jones, associate professor of marketing at the University of Texas at Tyler (UTT).
That lack of attraction hits applicants as they make their first pass at a store, according to Harold Lloyd, president of Virginia Beach, Va.-based grocery consultancy Harold Lloyd Presents, and author of “Supermarket Rules! 52 Ways to Achieve Supermarket Success” and other books for the grocery industry. From lack of personal interaction with applicants to broken or unkempt application kiosks, retailers don’t roll out the welcome mat for new hires, he says. “Assess your first impression,” Lloyd urges.
“What worked in recruitment and engagement five years ago doesn’t work now,” affirms Terra Powers, Norcal human resources and education manager at Pleasanton, Calif.-based Safeway (part of the Albertsons family of stores). “We have to move with the times. The industry has to be flexible and change and adjust to make sure we’re reaching our employees, our market, [and] the people we want to keep engaged.”
But the grocery industry relies too much on the tried and true, Powers believes. “Millennials want more flexibility and balance, and an understanding of their path and their options,” she says. “In previous generations, it was, ‘Put your head down and good things will come.’ Today, we need to advertise the opportunities; the new workforce wants to be reached this way.
Today, job applicants want to know that they’re a fit with the company. In a word: culture. If a retailer wants to create a unique, delightful experience for its shoppers, it should start by creating one for its store associates.
Regional grocery chain Raley’s, based in West Sacramento, Calif., starts with its Raley’s Way to attract talent with its mission, vision and values. The Raley’s Way, explains Mark Foley, EVP of human resources for the Northern California grocer, strives “to give you a good picture of our purpose, and how we get talent to come to us and stay with us.”
The Raley’s Way includes the “why”: to infuse life with health and happiness; the “what”: to make shopping easier, better and more personal; and the “how”: FAMILY, an acronym for attributes that Raley’s supports in its people: Fearless, Accountable, Memorable, Inspiring, Learning and You (make the difference). “If people are connected with our purpose, they’ll stay with us,” Foley asserts. “That’s how it ties back.”
The Raley’s approach of hiring for personality and passion, and then training to tasks, is supported by findings from a recent Coca-Cola Retail Research Council North America study. The report recommends that retailers should look for people “with emotional stability, optimism, self-efficacy, openness and who express conscientiousness” (see the sidebar on page 44 for more on the research).
Train ’em Up
Retailers are more likely to lose those valuable candidates early on when they don’t demonstrate a willingness to invest in training.
“If there’s nothing between ‘congratulations’ and ‘now get to work,’ there is no orientation,” notes Lloyd. This lack of onboarding is reflected in the industry average, which is just eight hours. “The best [retailers] provide 40 hours of training,” he says. They also keep it up with store meetings, department huddles, paycheck stuffers, bulletin boards, and more.
The lack of training and development is a likely factor in the high turnover rates in the retail industry. According to the Bureau of Labor Statistics (BLS), retail turnover was an estimated 55 percent in 2016. Industry experts indicate that grocery retail is closer to 60 percent.
Many in the industry claim that the turnover is due to the large percentage of young people in grocery jobs. BLS data support this, reporting that 30 percent of grocery store employees were between the ages of 16 and 24 in 2015. Retailers are likely the first employers that many of these young people will have.
Raley’s embraces the responsibility that comes as a first-time employer. “We understand that [for] many who work for us, it’s a first job, and we play a role mentoring these young people in life,” says Foley. “We mentor on how to work, dress for work, interact with customers, manage a checkbook, manage personal lives. It’s a responsibility to help them find their path. We know the path might not include us. But we also want to find those who are interested and show them the path within the company and show them that there are opportunities here.”
Unfortunately, many retailers don’t see the value of investing much time in training young talent, many of whom won’t last at a store for a year. But it’s a cycle of inefficiency in an industry tied to slim margins.
According to 2012 research published by The Center for American Progress, even for positions that pay less than $30,000 a year, retailers will spend more than 16 percent of an employee’s salary replacing them, so hiring and investing in good candidates supports the bottom line.
“High turnover lowers the quality of work, lowers productivity, and morale of employees is affected,” says Mary Kay O’Connor, VP of education at the Madison, Wis.-based International Dairy-Deli-Bakery Association (IDDBA). At the same time, it’s hard to account for training’s benefits. “Training management doesn’t always have a seat at the c-suite table,” admits O’Connor. “Training can be underrepresented, underfunded or not funded at all. Training can be the first thing to go in some groups.”
Competency-based training is essential, O’Connor says. “People need to feel comfortable with what they’re asked to do every day on the job.” That’s where IDDBA steps in. “We have a bevy of programs we’ve put in place for retailers and manufacturers, including competency training and creating engagement of the employee,” she notes. “Make them feel good about coming to work, and help them stay motivated.”
Given that about half its workforce are Millennials, Raley’s is adopting an approach to training and retention that reflects how people want to work in 2017, according to Foley. “Instead of strictly classroom training, we have some done on tablets. It might be a five-minute video, but that’s the expectation of younger people. They don’t want to sit in a classroom for two hours. We have a sanitation module that’s done in a fun, almost game-ified way.”
“Cross-training … is a brilliant strategy that no retailer has exploited,” suggests Lloyd. “It’s great for the company, great for the employee and great for the customer.” His next book, “Employee Retention Rules,” slated to be released late this spring, will address hiring and retention in grocery retail, including how to build relationships, cross-training, progression mapping, orientation, communication, discipline and “success plans.”
Raley’s has created its own version of the 10 characteristics of servant leadership that focus on people, results, thought and personal leadership. Associates identified as aligned with the company’s business values are tested to determine “if they have the agility to adapt and change and take on a larger role in the organization,” says Foley.
Using a practice sometimes referred to as “upskilling,” retailers should focus on identifying employees with potential and training them along a more structured, transparent career path, which allows store associates to recognize the skills that they’ll need for the next step.
“There’s lots of conversations about the reality of working in a store or warehouse, but not a lot about the path and trajectory of what a career in retail looks like in one, three or five years,” says UTT’s Jones.
Cynthia McCloud, executive education director of food industry programs at the USC Marshall School of Business, in Los Angeles, has noticed that, in just the past several years, retailers are adopting a development style common among CPG manufacturers.
“They invest in people and develop them, not just teaching them or sending them off to class, but move them around the company into different roles and different departments,” explains McCloud — for example, working from a store and then operations before moving to marketing, taking on a district manager role, analysis and finance. She’s seen this particularly among companies that have a succession-planning process.
“We’re seeing more of that from retailers who recognize that these future leaders need to know that the company cares about them and the company is willing to invest in them,” says McCloud.
In the forthcoming “Employee Retention Rules,” Lloyd writes that employees are looking for five things from their employers: orientation, communication, discipline, recognition and evaluations. Unfortunately, according to Lloyd, the industry selfrates at about a 44 on a scale of 100 when assessing its retention efforts.
Raley’s success with “retention is based on how well we communicate and [implement] change management, demonstrate opportunity for growth and provide support,” says Foley. “We believe in promoting from within, but we look for certain competencies rather than technological expertise. …We’re looking for people who live the values. … We look for informal leaders who exhibit servant leadership and respect their peers. Before they’re a leader, they’ve demonstrated these traits.”
Safeway has several programs that help employees identify their paths within the retailer, starting with Career Advancement Workshops designed for all store employees. The retailer has the equivalent of “a city of jobs,” notes Powers, and the workshops provide an opportunity to describe jobs throughout the organization and shine a light on executives who’ve worked their way up to the top. “People are always surprised that [senior executives] often started as courtesy clerks and cleaned urinals,” she says. “They see [these executives] as people like them.”
Another feature of the workshops is to promote the Retail Management Certificate, an accredited community-college program established by the Western Association of Food Chains, comprising eight courses deemed critical to managerial success.
Retention isn’t all about the paycheck, insists IDDBA’s O’Connor. “Millennials, in particular, want to work for a purpose in their job, and for the business’ entire organization,” she says. “Define the wider impact of their role and how important they are for the successful accomplishment of the company’s mission,” she advises.
Safeway’s Powers concurs: “When you invest in people, they feel valued and they want to give it back to you.”