While the economy may be struggling along, the third annual CSD/Humetrics HR Benchmarking Survey finds that the industry’s turnover is shrinking, hiring is increasing and investments in technology have never been higher.
In order to support the convenience store industry’s forecasting and planning responsibilities for 2011, Convenience Store Decisions and Humetrics have collaborated on our third annual Human Resources Benchmarking Survey. Once again, the results provide industry-wide insight into the actions others are taking, or planning to take, over the next 12 months.
This year, we see some interesting changes and emerging trends affecting chains of all sizes, including the use of social media as an employee recruiting tool and the increased use of technology to enhance training programs.
This year’s survey asked 48 questions relating to major staffing issues affecting operations and collected responses over a four-week period from February to March 2011.
Industry respondents ranged in size from more than 500 employees (15.2%) and over $500 million in annual revenues (2.4%) to 25 or fewer employees (26.1%) with under $1 million in annual revenues (9.8%). Compared to last year, we had fewer respondents in the $10 million and under range (43.9% vs. 54.2% in 2010) and many more in the $100-$500 million category (22% vs. 6.3% last year). These differences should be kept in mind when comparing year-to-year results.
While last year’s figures revealed significant concerns about the economy, this year’s results paint a different picture for the convenience retailing industry. Looking to the next 12 months, more than one-third (37.5%) of the respondents expect to increase staffing, and 50% expect staffing levels to remain the same. Only 12.5% predicted staffing levels may decrease.
Recent research studies indicate that employees and job seekers now cite stability as one of the most important things they look for when deciding whether to stay with an organization or accept a new job. So, while convenience retailing might not be an “industry of choice” for many job seekers, hiring managers in a recruiting mode would be wise to capitalize on the industry’s stability and security to attract quality personnel.
Staffing the Stores
When it comes to staffing levels, the results are almost exactly the same as the 2010 survey with only a slight increase in those predicting a need to add full-time hourly employees, which rose (from 58% to 62%). Of all the respondents in hiring mode (88% compared to 74% in 2010), this group anticipates increasing part-time hourly associate staffing levels by 8.31% and to add 7.14% to full-time hourly workers.
Store manager staffing is forecast to increase by 3.86% and multi-unit level managers by 4.45%. The 12.3% (versus 26% in 2010) of respondents who predicted decreased staffing in 2011 said the cuts are expected to mainly affect full-time hourly workers (7.35%) and corporate/office staff (3.95%). The industry’s commitment to training remains strong, with 95.9% planning to increase their training activities and increase budgets or at least remain at the same expenditure levels as 2010.
Of those who will increase their investment in training, the greatest emphasis again is on customer service skills (80%), followed by safety at 56.7%, foodservice safety/sanitation at 43.3% and tobacco and alcohol sales at 36.7%.
Back in 2009, 58% were committed to increased manager/district manager training vs. only 38% in 2010. This year, that number has risen slightly to 43.3%, which may reflect an increased sense of optimism on the economy or a feeling that “the worst is over.”
Managers’ salaries varied wildly, the survey found, ranging from a low of $15,530 to the high of $75,000 per year with an average of $38,256. Assistant managers’ pay ranged from $15,000-$39,000 per year with an average of $25,000. The hourly rate for a full-time employee ranged from $7.50 to $13 per hour with an average of $9.05. If there was any kind of silver lining to the recession, you can find it in the changes in the industry’s historically high employee turnover rates. In our last survey, 56% said turnover had decreased. This year, 43.8% reported turnover has decreased while 47.9% reported it has stayed the same.
In spite of all the attention given to job boards, Web sites, Facebook and Twitter, the best employee recruiting sources for new frontline, hourly employees (based on the average for all three years we have done this survey) continues to be:
• Employee referrals, 74.5%
• In-store advertisements, 44.7%
• Walk-ins, 40.4%
Company Web sites were deemed by 28.8% of respondents to be highly effective, followed by Internet job boards (14.9%) and recruiting through social media (6.4%).
Finding Store Leaders
When it comes to the three best sources for recruiting managers, 73.3% promote only from within. Referrals scored 42% and, a breakout in this category, the company Web site at 24.4%, pulled slightly ahead of job boards and want ads (20% each) for the first time.
When asked about the tools employers use to screen the best job applicants, in the first two surveys the results were identical: testing for skills, attitude, personality, IQ, police records search and online background searches. This year, we added two more tools as choices and got significantly different results, best illustrated by the following table:
In 2011, another 15% of respondents plan to add a check of social media sites and 25% plan to add testing and online background searches.
In another big change we’re glad to see, this year 65.2% of chains surveyed said they are filing for and collecting Work Opportunity Tax Credits versus only 31% last year. That’s a big improvement. However, there are many operators still missing this opportunity, with 21.7% reporting they don’t know what these credits are, and another 13% reporting that they know about them, but don’t file.
Determining why 34.7% are not claiming these tax credits is outside the scope of this survey, but according to Time magazine, from October 2007 (just before the financial crisis) to December 2010 (the most recently available statistics), the number of people on food stamps rose 62% to 44.1 million. That equals 13.1% of the population, up from 9% a little over three years ago. This means there’s still a lot of money being left on the table by those who don’t, or choose not, to file.
Dealing with Healthcare
In response to our query about healthcare reform last year, the prevailing opinion was that it would negatively affect the cost of benefits (72%) as well as negatively affect the organization’s ability to compete with other retail industries (52%). This year, 42.6% reported they believe benefit costs have increased since the bill’s passage, while 29.8% say costs have stayed the same and 27.7% don’t know what effect it had.
Over 85% of respondents reported no changes to benefit plans in 2010 and no plans to make changes in 2011.
When asked, “Which statement best describes your current pay policies for hourly employees and managers?” the most frequent response for both exempt and non-exempt employees was: “We have a pay-for-performance program and give raises based on productivity.” This was followed closely by, “We are giving selective raises” for hourly employees.
While respondents reported that the number of both employee-related lawsuits and workers’ compensation claims were about the same in 2010 as in 2009, this year 42.6% said workers’ compensation claims have stayed the same, but 40.4% actually reported a decrease. Approximately 58% reported lawsuits have stayed about the same, while 17.8% experienced a decrease.
When asked about investments in systems or technologies designed to manage labor costs, improve the hiring process or improve productivity, 51.1% (vs. 48% in 2010) reported making no new technology investments at this time. Perhaps this is where the economic slowdown is having its greatest effect.
For those who are investing, most plan to add new training technology or scheduling systems (13.3% each); payroll systems (12.5%) or automated hiring systems (11.1%).
When asked, “What is your labor cost as a percentage of sales?” the answers ranged from 5-40% with an average of 17.75% (and a median of 15.89%). Labor cost as a percentage of overall expenses ranged from 10-83% with an average of 39.8% and a median of 40%. Cost of benefits as a percentage of payroll ranged from as low as 3% to as high as 30% with an average of 9.8% and a median of 9%.
Despite the tough economic times, nearly 40% of convenience store retailers surveyed reported they are bullish on expanding retail operations in 2011. Just 8.3% said they were downsizing.
52.1% Stay the Same
Interesting to note is that profit sharing, bonuses and incentive pay show the biggest increases while the decreases are led by education benefits.
The average number of in-store transactions per store, per day was all over the map, from 50-6,368. The average was 949 (versus 1,123 last year) and the median was 600, down from 800 in 2010.
Likewise, the average number of employees per store was also down ranging from 3-25 with an average of nine a median of 7.5%. The number of employees per shift ranged from 1-6 with an average of 2.37 and a median of two.
Respondents that participated in this survey and requested the in-depth report have been given access to the detailed findings, which will serve as an important benchmarking tool for those charged with staffing, strategic planning and other human resources responsibilities in the convenience store industry. To participate in future benchmarking surveys please contact CSD Editor John Lofstock at firstname.lastname@example.org.
When asked to list any new employee training technologies they have recently added or are planning to add in 2011, approximately one-third of respondents cited Webinars as the most recent improvement to their training processes, while another one-third said they haven’t added, nor do they plan to add, any new technology at all.
Ten percent are going the computer-based training route and the remaining 25% were taking different approaches including social media training, video conferencing or training programs via the iPad. Current training plans include:
• Corporate Webinars, 33%
• Do nothing, 32%
• Computer-based Internet training, 10%
• Social media training, 5%
• Video conferencing, 5%
• Independent iPad study, 5%
• Online videos, 5%
• Intranet-based programs, 5%
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