Diamonds in the Rough

Steve Wing, director of government programs at CVS/pharmacy, and Debra Autry, pharmacy lead technician at CVS/pharmacy in Akron, Ohio

Of all the assets on the store floor, the most valuable is the associate representing your company. Not every retailer would agree with that statement—certainly not Circuit City, which recently announced it would lay off about 8.5% of its in-store staff, about 3,400 employees. Most surprising was the indication that these layoffs would involve the highest paid, presumably meaning the most productive, experienced and senior-level, employees.

At best, this was a desperate attempt to salvage cash flow—one that would potentially relieve short-term concerns but at a potentially huge cost to long-term infrastructure. Financial analyst Joe Feldman, managing director, hardlines retail analyst, at New York City-based Telsey Advisory Group, agreed the overall message was negative. “From a customer-service perspective, Circuit City is killing morale,” said Feldman.

“Bob Nardelli cut the top-paid employees in Home Depot stores and had four consecutive years of 20% earnings growth,” Feldman remembered. “But it cost him in the long run and customer service in the stores plummeted. Now, Nardelli is gone and Home Depot is again adding more qualified people to its stores.”

The majority of retail executives concur that the caliber of in-store employees correlates directly to the success of the retail enterprise. For most, the problem is finding and retaining the best possible associates.

Welfare-to-Work Success Story

For 20 years, Debra Autry depended on government support to make ends meet. She was working for a temp service cleaning offices when she met a CVS/pharmacy manager who recruited her to work as a cashier at the front of the store.

That was more than 10 years ago, when her daughter was 20 years old and her twin boys were 12. Today her daughter, who also spent time working for CVS, attends Akron University where she is studying to become a respiratory therapist, and both sons have good jobs.

Autry, 50, enrolled in the Welfare to Work program at CVS in 1996, excited to have found a program designed to help people on welfare find jobs and eventually wean away from government support.

After starting as a cashier, she moved into the pharmacy so that she could work more hours.

Training to become a pharmacy technician also allowed her to utilize typing skills that she had developed in high school. “I always thought I wanted to be a secretary, but the work was monotonous—working as a pharmacy tech is great and I’ve really enjoyed the people and working for CVS,” she said.

Many people whom Autry has worked with over the years have known that she is enrolled in the Welfare to Work program, but she has not experienced any discrimination or mistreatment.

Before starting the program, she had to pass a state test for eligibility purposes. Autry remembers finding the test very difficult, but her greatest challenge came later when she tested for pharmacy tech certification. Although CVS provided classes online and in person to teach the skills needed to perform the duties of a pharmacy technician, there was a lot to learn. “I was afraid I didn’t know everything I needed to become certified, but I passed the test and then became lead technician—and I’m still learning new things all the time,” stated Autry.

Staffing needs are particularly vexing for a growth retailer such as CVS/pharmacy, the retail division of CVS Caremark Corp. The Woonsocket, R.I.-based retailer employs some 176,000 workers, including 20,000 pharmacists. About 80,000 of its workers are part-timers, logging less than 30 hours per week.

Like all drug store chains, CVS/pharmacy discovered that in-store staffing issues were compounded by the growing shortage of pharmacists in a market where demand for health care is soaring. CVS, which ended 2006 with more than 6,200 store locations and sales in excess of $43.8 billion, has recruited some of its strongest associates from the most unlikely backgrounds: inner-city youth in schools with high drop-out rates, single mothers dependent on welfare and senior citizens retired from the work force.

Snowbird Pharmacist

For the past three years, John E. Johns, 67, has worked as a part-time pharmacist at CVS stores in two states. During the summer, Johns works at the CVS in Sea Aisle City, N.J., and when he and his wife, Patricia, go to their winter home in Cocoa Beach, Fla., he takes his part-time job to the CVS store in Melbourne, Fla.

“This is a very flexible situation and it works well with what I want and what CVS needs,” said Johns. “If I want time off to travel, or need time for family, I just take a leave of absence for a few weeks or a month and then come back.”

In addition to the flexibility, one of the things Johns needs and appreciates is the benefits. As an employee averaging 30 hours a week, he and his wife are covered by CVS’ employee insurance. Although the continued income is nice, it’s not about the money. It’s more about the flexibility, health-care benefits and being able to stay involved in a profession that he has enjoyed for almost 40 years.

“Last summer, I worked at several different stores in New Jersey—and that’s OK because all CVS pharmacies are set up the same, with the same procedures and things are kept in the same place,” he explained. “However, I prefer to work in one store in each location so I can get to know the people.”

He jokes that he may add a third state to the schedule, working part of the year in Connecticut so he can spend more time with his son and grandchildren.

Pathways to Pharmacy

Ryan Powers, 19, just finished his freshman year at the University of Illinois at Chicago’s (UIC) College of Pharmacy, where he is pursuing an undergraduate degree in psychology that will be followed by pharmacy school. Participating in the CVS/pharmacy Pathways to Pharmacy program convinced Powers that a career as a pharmacist was right for him. It also paved the way for a scholarship to UIC and employment while in school.

Powers was accepted into the Pathways to Pharmacy program during the summer of 2005, between his junior and senior years in high school. He subsequently was hired at CVS as a pharmacy technician in a Chicago store, where he worked for the remainder of high school. He has continued to hold this position.

“I’ve had diabetes since I was 3 years old and have been dealing with medicines most of my life,” explained Powers. “A career in some area of medicine always interested me, but I didn’t want to spend all the years in school required to become a doctor. The Pathways to Pharmacy program confirmed that pharmacy would be great for me.”

In addition to working part-time at CVS while enrolled at UIC, Powers parlayed his CVS experience to obtain a pharmacy technician position at Children’s Hospital in Chicago.

CVS/pharmacy has taken a proactive hiring approach, developing partnerships with nonprofit organizations, government agencies and faith-based entities that would enable the retailer to recruit good people from difficult circumstances, said Steve Wing, director of government programs.

Starting young: On the night he talked with Chain Store Age, Wing, 57, who also serves on the board of directors for Corporate Voices for Working Families, had spent the day in Washington, D.C., meeting with Congress about what corporations need to be doing to help youth plan careers and enter the work force.

A cornerstone of CVS/pharmacy’s youth recruitment is the Pathways to Pharmacy program it started in 2000 to help disadvantaged youth in inner-city and rural settings explore careers in pharmacy. More than 6,000 teens have gone through the program since its inception, and another 2,000 are expected to participate this summer. The program has expanded into almost 40 cities and continues to grow each year.

Potential applicants are nominated by teachers and complete a rigorous application and interview process. Character and integrity are as important as grades. “Students don’t have to have a 4.0 GPA to be eligible; if a teacher says this program could be the turning point for a kid, we want to talk to him,” said Wing.

Once selected for the program, students enter into a paid internship that is divided between class time at a partnering university’s pharmacy school and local CVS stores. The internship lasts about eight weeks, after which students are eligible to be hired to work by CVS/pharmacy.

Mature Career Options

“At this point in my life, I don’t have to be anywhere I don’t want to be,” declared Karen Tuttle, 60. An elementary-and middle-school teacher for more than 30 years, Tuttle retired in 1999 but wanted to keep busy.

She briefly worked in an antique mall, then decided to look into training and employment opportunities at her local CVS/pharmacy in Springfield, Ohio. Tuttle was drawn to the pharmacy tech profession because she liked the challenge of learning something new, and it was very different from anything she had done.

“I’d never even run a cash register before this job,” she said.

“It’s exciting because I have to keep learning new things and I enjoy meeting people.”

When she started at CVS/pharmacy in 2003, Tuttle worked part-time, but has since gone to full-time and plans to keep working for at least another two or three years.

“The students, typically rising high-school juniors and seniors, who complete our Pathways to Pharmacy program and maintain a 3.5 GPA in high school, are automatically accepted into pharmacy school at the participating college,” explained Wing. “Additionally, CVS/pharmacy offers tuition-reimbursement programs and forgivable loans so there is no reason these kids can not pursue a career in pharmacy and graduate from college debt-free.”

Another critical component of the program is mentoring by seasoned CVS pharmacists, who encourage and advise the youth, reminding them of the responsibilities as well as potential rewards of a career in pharmacy. “It’s a great career path and pharmacists often start with annual salaries of $80,000 to $90,000, and in some markets more than $100,000,” said Wing.

One of CVS’ objectives is to ingrain life skills in the young people that will prepare them to be more caring and productive contributors to their communities in whatever career they choose.

“One of the points we emphasize at CVS/pharmacy is the need to make an emotional connection with the consumer,” noted Wing. “Typically, customers in a pharmacy are either not well or someone whom they love is not well. That means these customers may not be as friendly or patient as in other circumstances, so it is important for pharmacy workers to be able to show empathy and support the customers.”

Roads to recovery: When it comes to sharing empathy, CVS/pharmacy raises the bar for corporate commitment. Since 1996, the retailer has hired more than 50,000 former welfare recipients.

Debra Autry, pharmacy lead technician at one of CVS/pharmacy’s busiest stores in Akron, Ohio, entered the Welfare to Work program in 1996, after spending 20 years as a welfare recipient. (See employee profile on page 29.)

“Debra told me that when she got her first paycheck her daughter and sons went to the grocery store with her so they could see her pay with cash—it was a family event for them, and that’s when I realized we weren’t just hiring people, we were changing lives,” said Wing.

Recruiting individuals from disadvantaged circumstances has a collateral benefit for CVS/pharmacy—not only does the retailer build a team of hard-working, dedicated employees, it also forges a relationship that is stronger than the typical bond between a store associate and corporate retailer.

“A few years ago we ran a newspaper ad to recruit pharmacy technicians; it was a fairly expensive ad in a Washington, D.C., paper and we got zero responses to it,” reported Wing. “I met a minister from a church in the same inner-city area and he agreed to let us participate in a job fair at his church. We saw over 100 people at that event, called 70 back for a second interview and hired 40 of them. Faith-based organizations are a wonderful partner for reaching the inner-city population, where people often have trouble trusting government agencies or large corporations, but they have a strong bond with their churches.”

CVS/pharmacy also partnered with churches on an employee-assistance project that was begun in October 2006. Through its “Prescriptions to Home Ownership,” CVS/pharmacy enables employees who might have trouble obtaining a mortgage to purchase a home. Employees working in hourly or lower-management jobs can borrow money to purchase a home at 1.5% below the prime rate.

“This is a service we provide for individuals who are working in hourly or lower-management jobs,” said Wing. “We began testing the program in Washington, D.C., and again we worked through churches because many of our associates were more comfortable working with realtors and banks when they were referred by a faith-based organization. We’ve already closed on 31 homes, and now we plan to expand the program to Los Angeles, Chicago, Boston and Atlanta. Employees aren’t just looking for more money; they’re looking for benefits that improve their lives.”

CVS/pharmacy is as innovative in its approach to retaining workers as it is in recruiting. A “Snowbird” program allows workers to split their full-time positions between stores in different states, which is particularly beneficial for mature workers who may have summer homes in one city and winter homes in another. (See employee profile on page 30.)

“If we take care of our employees, they take care of our customers,” concluded Wing. Additionally, there is a financial argument for many of the special government programs, which often qualify for tax credits. Over the years, Wing said, the government programs division has actually become a profit center for the retailer, “not a huge revenue generator, but enough to offset the costs of running the programs.”

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