Leadership Lessons for Employee Retention

Aug 14, 2019

Did you know high employee turnover burns through more than just staff?

For starters, it can be time-consuming and draining on staff to constantly be searching for and training new employees, not to mention costly, said IGA Coca-Cola Institute President Paulo Goelzer, citing that replacing an individual costs 16 percent of their annual wage on average. 

And yet, spending time and money searching for and getting new recruits up to speed isn’t the only way employee turnover affects your bottom line. A recent study from Glassdoor, a website where current and former employees anonymously review companies, suggests a strong correlation between employee and customer satisfaction—and ultimately, profitability for your company.   

Using a data set of about 863,000 Glassdoor employer reviews along with annual customer satisfaction ratings from the American Customer Satisfaction Index (ACSI), the study found that each 1-star improvement in Glassdoor employee satisfaction ratings translates to a 7.8 percent higher market value. For employers in high-customer-contact industries like grocery, the financial impact is potentially much larger. There, each 1-star improvement in employee satisfaction is associated with a predicted boost in market value of 18.9 percent.

“Our findings suggest employers who invest in employee satisfaction and improved workplace culture may enjoy spillover benefits that go beyond talent attraction and retention,” the study reports.  It goes on to say that maintaining a satisfied workforce—particularly among customer-facing roles—should be considered a key prerequisite to delivering the great customer experiences that, in turn, deliver higher profitability to your business.

Bottom line? Employee satisfaction matters on many levels. “The point here is simple,” Goelzer says. “You want more satisfied customers and increased sales? Make sure your people are happy.”

Easier said than done, right?  Maybe not, says Goelzer—provided your management team recognizes the part they play. “People forget that the best employees are not born, they’re made. Nothing is more important than a supervisor or manager’s role in satisfied, productive employees. Most people don’t leave the company, they leave the manager,” he said.

From on-boarding and training to maintaining a positive work culture, check out these tips for creating a workplace where employees want to stay for the long term.

Understand generational needs when on-boarding new employees

How you approach on-boarding new staff can depend on the ages of your employees and where they are in their careers. For example, Generation Z (those born in the mid-90s and later) value training, said Goelzer. “They don’t feel as comfortable in a sink or swim environment,” he said. Generally speaking, this generation is not as prepared for the workforce, and working at your store might be their first job. Being new to working, they might need extra guidance, mentoring, and/or “hand holding.” Be clear in communicating what’s expected of them and emphasizing their role in the team.

When it comes to Millennials, it’s important to mix up the workload so they don’t get bored. “With this generation, it’s important to not just throw them into stocking shelves, but make sure you’re increasing responsibility, putting them in different positions in the store, cross training, and challenging them a little,” said Goelzer. Get creative with offering incentives for training and development, and add more responsibilities to keep them progressing—just make sure you’re clear about the potential requirements of the job up front.

Jim Shook, owner of Lake Region IGA in Pennsylvania, has seen this first-hand in his store. He prides himself on employees’ longevity: five have been there since the store opened in 1987 and several others are in their 50s and 60s. But he admits he’s had his own struggles in finding quality replacements.

“The environment is changing drastically,” Shook said. "The Millennials and the younger generations that are coming in have a different approach to working than we had 30-40 years ago. It's not that it's a bad thing, but you have to adapt your business to it," he said. "If you try to force a new employee in the workforce to work the old way, they'll leave,” he added.

For his part, Shook changed his hiring process by updating the job descriptions for every department to include all possible requirements upfront.

"What we've found is that if you explain to them what's involved in the work, they're more apt to be more acceptable to it before they start working the job, as opposed to, 'You didn't tell me when you hired me that I'd have to do that,'" he said.

Maintain a positive work culture

One of the most important pieces of employee retention is to cultivate a positive work environment, or workplace culture, said Goelzer. When that’s effective, you’ll have an easier time knowing how to hire to fit your culture, and also how to keep the employees you have happy.

Why should managers pay attention to this? Because a number of long-term studies have found that culture drives performance.

Over a 10-year period of time looking at company performance and employee satisfaction surveys, one of these studies found that those with an engaged culture had:

  • 26% less employee turnover
  • 100% more unsolicited employment applications
  • 20% less absenteeism
  • 15% greater employee productivity
  • 30% greater customer satisfaction levels

Managers looking for a more active role in shaping store culture can take these steps, shared by Goelzer:

  • Start with self-awareness: First thing is to understand what kind of values you have. From there, you can build a culture that drives commitment and determine what changes need to be made.
  • Instill a sense of purpose: It is not enough to tell people what they should do, you must also tell them why it’s important. Why we work determines how well we work.
  • Engage associates: If the workplace attitude (how we treat each other) is right and workers know how their roles fit into the success of the business, a big part of the battle is won.
  • Be a model: Always practice what you preach. Leading by example is the best way to help others learn. 

Lifelong Learning

At Montana-based Gary and Leo's stores, owners Laura and John Malisani and Tracy Job—recently awarded 2019 IGA Retailer of the Year—have developed a learning-based culture that cultivates strong, reliable employees who are confident, knowledgeable, and ready to help. 

For example, the store’s Back to Basics initiative urges employees to step up to the intercom and tell customers what fresh items they just prepared, which helps foster stronger relationships with the customers and keep employees invested.

Laura Malisani said that she ensures employees stay engaged with continuous online training from the IGA Coca-Cola Institute and other training opportunities. With a group of managers approaching retirement earlier this year (thanks to 30+ years with the company!), Malisani's team hired seconds in these departments and enrolled them in Supervalu’s 26-week, online manager classes. By taking these classes as a group, Malisani says they are cultivating important relationships with each other during the collaborative learning sessions.

Looking for another in-person group experience to get your leadership team up to speed? Consider the upcoming IGA Coca-Cola Institute International Supermarket Management Class (ISMC), with two different locations this year—one on the West Coast and one on the East Coast.

IGA National Retailer Advisory Board Chairman Kevin Young, who owns three IGAs in California, makes it a requirement for all new managers to attend, and credits much of his stores’ successes with employee retention to the tactics learned in the class.

“There’s no doubt that learning is the key to keeping team members engaged and motivated,” Young said. “The training they receive through the Institute is a huge help, but for us, there’s no replacement for this in-person experience. Everyone comes back re-energized and excited, so we decided the more people we can send, the better,” said Young, who now likes to send both his store and assistant managers at the same time so there’s no resistance among the people in charge to trying new ideas.

“If you get the whole management team on board, pretty soon you see that enthusiasm trickle down to every level in the store. Once that happens, you have the kind of culture that people want to be involved in for the long haul.”

Want to hear what other attendees have to say about the ISMC? Take a look at this video testimonial from last year's class. 

 

The ISMC is open to all members of the independent supermarket industry, and both the West and East Coast classes are filling up quickly. Click here for more information and to register.

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