The Eighth Annual CSD/Humetrics Human Resources Benchmarking Survey identifies the key employee issues affecting convenience store retailers and what chains can do to overcome them.
By Mel Kleiman, President, Humetrics and John Lofstock, Editor
Convenience Store Decisions and Humetrics have again collaborated on our eighth annual Human Resources Benchmarking Survey. The results reported here are based on respondents’ recent experiences and expectations, providing some industry-wide insight as well as a number of useful benchmarks.
This year’s survey asked 43 questions (a few about general business conditions and the majority about specific human resource issues) and collected responses from mid-February through mid-March.
Respondents’ employers ranged in size from 25 or fewer employees (32.8%) with less than $1 million in annual revenue (10.5%), to more than 500 employees (20.7%) and more than $500 million in annual revenue (8.8%). Most respondents fell within either the smallest company bracket or the largest, with 5.1% of participants comprising the middle 51-100 employee category.
When looking at respondents by job title, 44.6% were corporate personnel while store managers and human resources professionals represented another 23% each.
EMPLOYEE SCREENING AND STAFFING
As has been the case for the past seven years, the biggest human resources challenges in 2015 were finding and keeping good people.
According to responses, 71% expect that to be the case again in 2016. For the past seven years, as shown later in this report, few respondents are taking any proactive measures or doing anything differently to meet this challenge.
When it comes to screening and staffing activities, approximately 75% of these responsibilities (recruiting, pre-screening, interviews, reference checks, drug tests, etc.) continue to be handled primarily by store owners and managers while corporate HR personnel account for another 20%.
Of this year’s respondents, 33.8% increased staffing levels in 2015 and 26.5% expect to add more personnel in 2016. The greater majority, however, reported staffing levels stayed about the same in 2015 and 60% expect they will not change significantly in 2016. Comparably, 4.4% reduced staff in 2015, 8.9% expect a staffing decrease in 2016.
When it comes to employee turnover, even though the respondents reported a 28.3% increase in 2015, they still experienced an overall hourly employee turnover of only 55%, which is significantly lower than the National Association of Convenience Stores (NACS) published average of 77%. Average turnover for corporate staff and managers was 8% and 15% respectively.
When we look at the recruiting methods used to attract both hourly and salaried employees, the tools deemed “most effective” were:
- In-store ads/outdoor signage
- Re-recruiting former employees
- Local newspapers
- Company websites
- Internet job boards
- Re-recruiting former employees
- Company websites
- In-store ads or signage
It is interesting to note that referrals, whatever their source (employees, referral award programs, social networks), are all highly effective and comparatively inexpensive. While the use of social media tools is increasing, their effectiveness is not yet significant.
When asked about the tools employers use to screen applicants, those most widely in use (other than employment application forms and resumes at 91%) are criminal record checks and reference and background checks (53% each), drug testing (38%), the telephone prescreen interview and skills testing (30% each). In spite of the fact that most employees are fired for attitude problems (statistics follow), only 26% of respondents use pre-employment attitude assessments and only 11% expect to add this tool in 2016.
The top reasons hourly employees most frequently give for leaving:
- 62% More money
- 33% Differences with manager/supervisor
- 30% Family-related reasons
- 30% Scheduling conflicts
As mentioned above, the reasons hourly employees are most frequently fired are attitude issues, including dishonesty (77.3%), absenteeism (66.6%), and because “they would not meet performance standards” and, yet, only 26% of respondents use pre-employment attitude screening tools.
Only 50.8% of respondents said they have some sort of formalized, hourly employee training program and those range anywhere from 1-44 days (with an average of only seven days) and a budget of $0-$2,000 per person per year (with an average of just over $325). Management personnel training programs averaged $1,200 per person per year.
Approximately 70% reported that training programs stayed about the same in 2015 and about 44% expect them to stay about the same in 2016. Of those who will increase their investment in training, the greatest emphasis will be on customer service skills (78%) followed by foodservice safety/sanitation (44%) and manager/district manager training and, finally, teamwork (43% each).
VALUES VS. CULTURE FIT
Often, when hiring and recruiting employees, interviewers try to determine how well an applicant would fit the existing corporate culture by asking questions like:
- “Are you willing to work late hours?”
- “Do you prefer to be part of a team or to work independently?”
- “Is it important to you to have a private work space?”
While culture fit should be considered, insisting upon it denies you the benefits diversity brings in terms of points-of-view and new ideas. Moreover, it is much more important to hire for values like those expressed through attitudes like work ethic, integrity and a willingness to take responsibility. After all, perhaps the person who is willing to work late only wants to because of a difficult relationship at home, not because it’s important to get the job done no matter what.
LABOR COSTS AND BENEFITS
54% reported that their local government recently had or will soon raise their minimum wage so, not surprisingly, 72.9% of respondents expect labor costs will increase in 2016.
Currently, for this reporting group, store managers’ salaries range from $24,000-$90,000 annually with an average of just over $43,000. Assistant managers’ range from $10,000-$40,000 per year with an average of $28,000.
The annual income for a full-time employee ranges from $14,000–$45,000 with an average of just over $23,000, while part-time people earn from $5,000–$30,000 with an average of $13,000.
When asked: “Which statement best describes your current pay policies,” respondents have noted a shift away from “across-the board raises” and “selective raises” over the past three years to more “pay for performance” schemes for both salaried and hourly employees.
In response to the effects of Obamacare, approximately 40% said the program has had no effect on staffing levels, growth plans or their employee mix. Those who believe it has had or will have a negative impact on all three came in at about 30% (down about 15% from 2014). It seems, in spite of dire predictions from some quarters, the industry has been able to adapt and survive.
There have been no significant changes in the array of benefits offered to full-time staff by the reporting group as compared to the responses given in 2015. The top four are still: paid vacation/sick leave (71%), medical (68%), bonuses (62%) and dental (45%).
At least 75% expect benefits packages to stay about the same in 2016, while about 16% expect they will increase.
Nearly 60% saw healthcare costs increase last year and also expect them to rise in 2016.
Approximately 60% said employee-related lawsuits “were at about the same levels” as 2015; while 65% reported levels for worker’s compensation claims were about the same and 50% expect them to be the same again this year.
When asked: “Has your company been audited for any labor-related issues in the past year, 10% answered “yes,” which was down from the 21% of those respondents recorded last year.
When asked if any efforts are underway to unionize employees, 72% said “no,” 3% “yes,” and 22% responded “don’t know.”
When asked about Work Opportunity Tax Credits, only 26% of survey respondents reported they are participating in the program while 77% “don’t know if they’re worth the effort.” This probably represents an awful lot of money being left on table and we can only surmise this oversight is due to a lack of education about the benefits of the program and how to use it.
As for new technologies acquired to improve the hiring process and/or increase productivity, nearly 60% reported no additions in 2015 and 50% have nothing new planned for 2016. The implemented or planned additions most often mentioned by the other 35% were an assortment of new systems (payroll, recruiting and scheduling).
Finally, when asked: “How was business in 2015 and how do you think 2016 will compare in each of the three categories listed below,” a preponderance think 2016 will at least hold steady or even grow, while about 25% predict a rocky road ahead for the U.S. economy in 2016.
Our thanks to all those who took time out of their busy schedules to participate.