Staffing is one of the biggest investments in the convenience store industry. Convenience Store Decisions and Humetrics collaborated to examine the most pressing human resource issues and where companies are spending their money.
To help convenience store retailers better manage their workforce and understand what employees are looking for in an employer, Convenience Store Decisions partnered with Humetrics for our seventh annual human resources survey.
After crunching the numbers, results showed that among the top concerns for 2015 are reducing employee turnover, effective recruiting, managing benefits—specifically those influenced by the Affordable Care Act—and fair compensation, especially as chains like McDonald’s and Walmart react to criticism over hourly wages offered to employees.
The survey indicated turnover appears to be dropping to historic lows, which allows c-stores to be choosy about the kind of employee candidates they’re seeking.
This flexibility permits c-stores to concentrate less on skills and experience and hire for what really matters: attitude and enthusiasm. When an outstanding candidate is found, possessing the attitude, intelligence, physical capacities, skills and personality fitting the bill, the company can groom him or her to be a long-term staffing solution.
To keep peoples of such quality, managers often have to let them know up front that while convenience retailing has never been an industry of choice, it’s an industry of great opportunity. Tell them about your career path and other company success stories. Keep your hiring standards high, get the best people you can in the door, and then get them excited about the industry and the challenges ahead.
This year’s survey asked convenience store retailers 36 questions regarding human resource issues and practices. Responses were collected from mid-February through mid-March 2015.
Nearly 90 chains representing more than 10,000 convenience stores and gas stations participated in the survey. Company employers ranged in size from more than 500 employees (24.2%) and more than $500 million in annual revenue (12.5%), to 25 or fewer employees (36.4%) with less than $1 million in annual revenue (18.75%).
This year, a majority of the respondents were in the 101–500 employee range (50.9%) with annual company revenue ranging between $10 million-$50 million.
When we look at the respondents by job title, 39.3% of respondents fill executive-level positions, such as vice president of operations and marketing, 28.6% are corporate human resources professionals, 25% multi-site managers and 7% district level managers.
When it comes to hiring and training activities, including recruiting, pre-screening, testing and interviewing, reference checks and drug tests, most of these responsibilities continue to be handled by store managers, with the exception of drug testing, which is often handled by corporate human resources managers (32.1%) or a third-party vendor (18.6%).
Nearly one-quarter of the chains participating in this year’s survey reported that sales growth required them to increase hiring. Approximately 24.3% of respondents said their companies had increased staffing levels in 2014 and 27% expect to add more personnel in 2015. A majority, however, reported staffing levels stayed about the same in 2014 and 70.3% expect they will not change much in 2015.
Though 10.8% reduced staff in 2014, only 2.7% expect a decrease in 2015—versus 19.4% last year who expected staff reductions.
Employee turnover is still at historically low levels, but is significantly higher than reported in 2014. On average, turnover for managers, full- and part-time employees was 15%, 34% and 53%, respectively.
More than one-third (38%) of the survey participants expect to devote more time and money to employee recruiting activities this year (vs. 22% last year) while another one-third (33.3%) say recruiting activities are expected to stay at about the same levels this year as last.
When we look at the recruiting methods used to attract both hourly and salaried employees, the tools deemed “most effective” were:
Regarding the tools used to screen applicants, results indicate more employers are either using or plan to use additional screening tools. Other than employment application forms and resumes, such tools included criminal records checks, in-house or outside service reference/background checks, the telephone prescreen interview, skills and drug testing.
Approximately 69% are now using attitude testing and 78% report administering personality assessments and about one-third of respondents expect to add one or both of these tools in 2015.
In 2014, the biggest human resources challenges were recruiting and retaining quality employees as well as employee engagement/motivation and managing benefits/compensation. Retaining qualified workers was a top priority.
The reasons hourly employees most frequently give for leaving are:
1. More money (67.6%)
2. Number of hours available to work (54.1%)
3. Differences with manager/supervisor and scheduling conflicts (29.7% each)
The most frequent reason hourly employees were fired was absenteeism (73.7%), dishonesty on the job (65.8%) and tardiness (42.1%).
While 73.5% of respondents do have formalized training programs, the rest do not. And, once again, approximately 60% of those that do reported their training programs stayed about the same in 2014 and about 44% expect them to stay about the same in 2015.
Of those who will increase their investment in training (about 54% compared to 46% last year), the greatest emphasis will be on customer service skills (70%) followed by foodservice safety/sanitation (56.7%) and manager/district manager-level training (50%).
For 2015, approximate yearly training budgets ranged from $100 to $3,500 per employee, with an average of $700 for frontline, hourly employees and $500 to $5500 for management personnel, with an average of slightly more than $2,000.
Labor Costs & Benefits
Not surprisingly, approximately 72.9% of respondents expect labor costs will increase again in 2015.
Currently, store managers’ salaries range from $21,000 – $60,000 annually with an average of just over $40,000 (only marginally higher than last year’s $39,490). Assistant managers’ salaries range from $10,000 to $42,000 per year with an average of $31, 667 (up from $25,662 last year).
The annual income for a full-time employee ranges from $16,000–$25,000 with an average of just over $20,000 while part-time people earn from $9,500–$20,000 with an average of $13,000.
When asked: “Which statement best describes your current pay policies” the results for both salaried and hourly employees were:
1. We have a pay-for-performance program and give raises based on productivity (44%, up from 25% in 2014).
2. Across-the-board raises of 1-3% (23%).
3. Selective raises (16.6%, down from 36.1% last year).
Slightly more than 5% reported a 2014 “wage freeze” and 6% expect that to be the case in 2015 as well, especially for managers.
When asked about Obamacare, respondents were unevenly divided between those reporting it would have no effect on staffing levels (57.9%, up from 48.6% last year), growth plans (60.5%, up from 43.2%), and employee mix (55.3% up from 43.2%). Respondents who said healthcare reform has had a negative impact on all three areas was about 35%, a decline of 10 percentage points compared to last year.
As pay is trending up, added benefits, such as company-matched retirement savings, bonuses and paid personal time, have dropped slightly. The following table summarizes the benefits offered to full-time staff by the reporting group, as compared to 2014:
More than 60% expect benefits packages to stay about the same level in 2015, while 37% expect an increase. No one responding expected levels to drop.
Over 50% saw healthcare costs increase last year and 78% expect costs to rise in 2015.
Also, approximately 65% said employee-related lawsuits “were at about the same levels as 2013” in 2014 and 51% expect them to stay about the same in 2015; while 65% reported levels for worker’s compensation claims were about the same and 61% expect them to be the same again this year.
When asked: “Has you company been audited for any labor-related issues in the past year,” 21.2% answered “yes,” up from only 6% last year. Moreover, when asked if any efforts are underway to unionize employees, 85% said “no,” just 3% said “yes,” and 12% responded “don’t know.”
As for new technologies acquired to improve the hiring process and/or productivity, nearly 80% reported no additions in 2014 or planned for 2015. The implemented or planned additions most often mentioned by the other 20% were new payroll systems or suppliers, training technologies and scheduling/hiring systems.
Companies that CSD interviewed in conjunction with this survey tended to agree that technology makes the job easier. For example, at Family Express stores, scheduling is based on time motion analytics for each task encountered in the daily routine of operations, said Alex Olympidis, director of operations for the Valparaiso, Ind.-based chain. “The challenge is allocating our planned hours in a way that complements our transaction activity and thus delivers outstanding customer service,” he explained.
For well over a decade, Family Express has been using a custom-designed labor allocation system that delivers more than $140 of in-store sales for every labor hour. “But we think we can do even better,” Olympidis said. “Labor efficiency is important to Family Express, yet what is more important than efficiency is scheduling our resources in a way that serves our customers best.”
For the past couple of years, Ted Roccagli, retail marketing manager/business coach for Gainesville, Ga.-based Mansfield Oil, which services 350 c-stores, has relied on the Ruby/Sapphire cash register system to generate a report at close-out each day that breaks down the previous 24 hour period’s sales by hours and departments.
Roccagli recommends that his customers graph those results to determine peak sales times for their stores and compare the graphs over weeks to determine trending. “As technology has advanced in this industry, we are now looking at some of the newer Web-based options to make us even smarter about scheduling,” Roccagli said.
While York, Pa.-based Rutter’s, which operates 60 stores in central Pennsylvania, uses a software graphing program that recommends the number of employees to schedule at any given time, making sure that every shift is covered adequately also requires cross-training of all employees. “Every employee has to know how to take care of the customers,” said Jerry Weiner, Rutter’s vice president of foodservice.
Finally, when asked: “How was business in 2014 and how do you think 2015 will compare in each of the three categories listed below,” the preponderance think 2015 will improve or at least, hold steady.
Our thanks to those who took time out of their busy schedules to participate.