Do more full-timers give Sheetz a competitive edge?
The vast majority of those employed in retail stores are done so on a part-time basis as employers seek to keep costs down and retain greater flexibility in scheduling. But a small number of companies are adding full-timers in an attempt to lower the costs associated with employee turnover while improving customer service.
According to a Wall Street Journal report, the convenience store chain Sheetz is one of those who see the business benefit of full-timers. The Altoona, PA-based company currently has 53 percent of workers in its stores on full-time duty. Management believes that, while initial costs of more full-timers may be higher than with part-timers, the financial benefit becomes clear over time as costs associated with recruiting and training are reduced.
Sheetz cites further benefits such as full-timers being more willing to put in the extra work required to make their stores successful. The chain’s management also believes that customers familiar with seeing the same workers behind the counters also leads to greater comfort and higher sales.
The chain has long been known as one of the better employers in the convenience channel. Sixty-eight percent of those rating it on Glassdoor say they would recommend working at the chain to a friend.
In January, Sheetz announced raises in the minimum wages it pays entry-level employees and managers. At the time, the company was quick to address concerns that it might need to cut back hours to help pay for the higher wages.
“While other businesses in the industry might have to cut back on employee hours or new hires as a result of wage increases, Sheetz is working hard to provide full time hours to as many employees as possible, providing them with an opportunity to earn more and secure health benefits,” said Stephanie Doliveira, vice president of human resources at Sheetz.
Discussion Questions
DISCUSSION QUESTIONS:
Where do you come down on the costs/benefits associated with hiring full- and part-time workers? Do you think the current hiring and retention model at retail is in need of change?
Poll
BrainTrust
Shep Hyken
Chief Amazement Officer, Shepard Presentations, LLC
Adrian Weidmann
Managing Director, StoreStream Metrics, LLC
Keeping costs down isn’t the only thing. Full-time employees are better-informed, happier and more likely to bond with regular customers. What’s better — having an associate greet a customer, or having an associate greet a customer they know?
Given the experience that I believe most of us have with underwhelming associate service in most retail establishments, and the apparent lack of interest with which many (if not most) approach their job, the answer is to invest in full-time, competitively-paid workers. It’s one of those ‘pay me now or pay me later” situations. Turnover costs retailers a lot of money, and service by dissatisfied employees costs retailers even more.
Having more full-time workers will surely give a retailer an advantage. Several retailers do this so Sheetz is not unique. The challenge is not so much the cost but rather finding employees who are worth training and paying. Over the years we have seen retail as being a career, or temporary employment of “warm bodies.” Retail workers fall into various classes just like in baseball. You have Major League and then various levels of Minor League. So not all retail workers are equal.
Right now I would consider non-management retail workers that are over $20 a hour plus benefits as being the Major League with the Minor Leagues being various levels below $20 a hour. Walmart and Target have set the warm body minimum wage at around $10 per hour. Still at $20 a hour you are going to have a difficult time finding hard working ambitious people. Many retailers would love to change their hiring and retention model but the pool of fit, hard working, honest, reliable workers is too small. Our social safety net programs also have strict limits on income and some workers would actually lose money by working more hours. In order to solve our labor shortage issues we need to find better ways to encourage the available labor force to want to be a Major League retail employee rather than be a perpetual warm body.
No doubt that turnover is expensive. The cost to hire and train is a big part of that cost. The “ramp-up” time needs to be considered as well. And the cost of having a part-time employee who is not trained properly making a bad decision or losing a customer can be a huge cost to the company.
Then the emotional connection must be considered. Full-time employees might be more engaged and willing to go “above and beyond” more than part-time employees.
Depth of knowledge also comes into play. A long-term employee will understand the culture and history of a company. They will also get to know the customers they see on a regular basis. Over time, this makes a difference.
It’s not just cost control but the ability to have a better associate to service your customers. It may also bring productivity gains with full-time vs. part-time as they are more adept at doing the job and may care more.
As with most issues there are pluses and minus to shifting from relying on part-time to using more full-time staff. In the latter case costs are higher and so is the ongoing cost primarily due to benefit costs. So is the cost of replacing a single employee. There the hard and soft costs that equal up to the employee’s annual wage. The good news is that the turnover rate is typically much lower and so net cost is less.
There are other benefits as well as pointed out in the article. One not discussed is full-timers are the source for your upwardly mobile employees. They are the talent pool from which retailers can draw upon for management. They already know the company, its policies and procedures, etc.
A full-time employee is more empowered and engaged ultimately providing a better customer experience. From my perspective, Sheetz is doing a great job of positively differentiating their brand by empowering their employees relative to their competitors.
Full-time employees are more engaged in their job versus the typical part-time worker, as it is their livelihood. Part-time employees typically feel limited investment in their job, as it truly is a “part-time” or temporary role.
As customer service and the related expertise and engagement gives physical stores a clear advantage over online shopping, retailers should focus on attracting and retaining full-time associates.
Having part time workers make the most sense, since it minimizes costs while offering maximum flexibility to a workforce that demands this.