CareerBuilder survey: One bad hire costs business more than $50,000 on average
Chicago — According to a survey released Monday by CareerBuilder and conducted by Harris Interactive, 80% of retail companies report that a bad hire has adversely affected their business in the last year, meaning that hiring the right employees will become a top priority in 2011.
Nearly one-quarter (23%) of the 254 U.S. retail hiring managers surveyed said that one bad hire cost their business more than $50,000 in the last year. One-third (33%) said that one bad hire cost them more than $25,000.
When asked how a poor hire affected their business in the last year,
retail employers reported the following: 45% said it resulted in less productivity; 38% reported lost time to recruit and train another worker; 34% said it had a negative effect on employee morale; 29% reported fewer sales; 19% said it had a negative effect on client relations; and 11% reported subsequent legal issues.
"Poor hires can have a significant effect on customer service, which can negatively impact sales," said Ben Jablow, managing director of WorkInRetail.com. "Bringing the right talent on board is essential to help maintain their bottom line, and keep customers satisfied. As a result, retailers are working to proactively prevent bad hires through target talent research and improved sourcing techniques."
Of retail employers who made a bad hire, 42% said they think they made a mistake hiring someone because they needed to fill the job quickly, followed by lack of understanding of where their target talent is (20%) and unsuccessful sourcing techniques (9%).
Nearly half (49%) said they have an average cost per hire of more than $1,000, up from 11% in 2008.
Target to save planet too
While such retailers as Kohl’s, Walmart and Office Depot were receiving accolades for their sustainability efforts the past few years, Target was seldom mentioned in the same breath. Target wasn’t exactly destroying the planet, but it was far less vocal and precise than others about its efforts in the area of sustainability. Not any more. The company last week established some clear goals regarding resource usage, waste elimination and carbon footprint reduction and a time frame in which to achieve them.
“Target has long invested in the health and sustainability of our communities by integrating rigorous programs throughout our business that reduce our environmental impact,” said Gregg Steinhafel, Target’s chairman, president and CEO. “We believe the commitments announced today will guide our ongoing efforts to further engage Target suppliers, team members and guests in our sustainability initiatives.”
By 2016, Target said it plans to reduce waste sent to landfills by 15%, reduce water usage and greenhouse gas emissions by 10% per sq. ft. and earn the Energy Star label from the Environmental Protection Agency for at least 75% of its buildings. In addition, the company plans to improve the efficiency of general merchandise logistics by 15% to 20% through the use of cleaner and more fuel-efficient transportation practices.
Target said it has incorporated environmental sustainability into its business strategy for more than three decades, installing rooftop solar systems, converting to energy-efficient light fixtures and adopting other initiatives that have earned it Energy Star certification at more than 100 stores. Additional information on the company’s efforts is available at hereforgood.target.com/environment.
Pulling another loyalty lever
Taking the long view of what is expected to be moderate consumer demand in the United States, it is apparent the primary sources of growth for retailers are to gain share from competitors and capture a larger share of wallet from existing customers. It’s why there is so much effort expended on the loyalty front, as retailers know success is dependent on keeping existing customers happy and rewarding them ever more generously for their loyalty. Target’s 5% Rewards program is a good example, but it is only one of many, and looking ahead to 2011 and beyond the whole area of loyalty is ripe for the expansion of experimental initiatives and the development of new ones that address deficiencies of the shopping experience.
Target is already experimenting with the Shopkick mobile application that allows users to receive points and other money-saving incentives such as coupons just for entering Target stores. Just last month the company began offering the location-based app at 242 stores in such major markets as Chicago, Dallas, Los Angeles, Miami, Minneapolis, New York and San Francisco. Target has been aggressive on the mobile front and offers a robust app for its tech-savvy shoppers so it would seem likely the company would expand the location based concept after the holidays whether it is with Shopkick or another provider.
But why stop there? Most of the loyalty efforts in the retail world tend to focus on savings incentives, but shopper loyalty is driven by the experience as well. Airlines understand this and offer their most valuable customers preferential treatment in the form of seat selection and check-in. Those concepts would seem to apply well to the retail world as shoppers who achieve elite status based of their volume of spending would have access to a dedicated checkout lane.