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Retailing 133: Hiring Smart

When 4 out of every 5 new employees turn out to be bad hires, it’s time to tighten up your hiring procedures.

By Jay Townley

Is it good or bad to hire employees who hop from job to job? This question can cost you time and money … or it could represent an opportunity for your store.

Job-hoppers can range from applicants who can’t hold a steady job to those who make great employees but will bolt when a better offer comes along. The trick for your retail business is to quickly weed out the good from the bad — and hang on to the best. Even “job-hoppers” can become great long-term employees if the fit is right.

Research shows that, for one reason or another, 80 percent of new hires by small businesses turn out to be bad hires. Establishing “hiring smart” policies and procedures is all about reversing this.

Where Do You Start?

First, keep up-to-date job descriptions for all of your store’s positions, including qualifications you feel are important.

Next make sure you have a job application form. If you don’t have one, ask the businesses around you or your Chamber of Commerce if they have sample forms. Also, search online and visit your local office supply store to see if they have “stock” application forms.

When you have an opening, have every candidate fill out an application. You, of course, will read each one. Then, have a manager or trusted advisor read through them and suggest those they think have the most potential.

You also should consider online screening assessments of job candidates, which are readily available today for a reasonable cost. Such assessments can help you determine if an applicant is reliable and trustworthy.

Here is where many small businesses make a mistake: Hiring on “gut-feel” without having the applicant take an online assessment, or without asking for references from former employers, or without conducting at least two interviews.

For every applicant that has a good, interesting, promising application, and who has a good to great online screening assessment, conduct a preliminary interview with you and at least one other person. If the applicant gets through the first interview, ask for at least three references (and make sure you call the references). Then set up a second interview, again with you and at least one other person whose opinion you trust.

Replacement Cost

If all this sounds like a lot of work, well, it is. But compare the costs here with what it could cost you and your business if your “gut” leads you to make another bad hire. In addition to chasing away customers, bad hires can create customer-service problems and cause other, good employees to bolt because they’ll think your business is poorly run. Research shows that it costs the typical small business anywhere from $3,500 to $5,000 to replace an $8 an hour employee!

There’s another 80/20 rule at work here. Retail data also shows that the typical small retail business that doesn’t hire smart and train and educate its staff ends up with 20 percent of the sales floor associates making 80 percent or more of the sales. It doesn’t take long for that 20 percent — who are the best hires the store has made — to become discouraged at having to carry the rest of the store associates, and jumping to the next job they can find.

In addition to hiring smart, your tennis retail business can hang on to great full- or part-time staff, including former job-hoppers, by providing consistent training and education to improve sales efficiency and effectiveness.

You can reverse this 80/20 rule so the majority of your sales associates are consistently improving their close rates and increasing the size of their sales tickets.

This is part of a series of retail tips presented by the Tennis Industry Association and written by the Gluskin Townley Group (gluskintownleygroup.com).

From the September 2014 issue
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