Jason KrumwiedeIncrease same store sales 3-5% per quarter through validated pre-employment assessments
Certainly an absurd question, but it’s tough to get a CFO’s attention these days, isn’t it? Don’t you think it would be hilarious to have your CFO asking 2,000 sixteen year-olds probing behavioral-based interview questions this upcoming holiday hiring season? In reality, it’s not that funny, because hiring quality front-line employees is hard and critical to the retail sector in improving same store sales. They want to make sure these employees have the right stuff and work habits to successfully service and up-sell their customers every day.
Listen to any large retailer’s recent quarterly earnings and a key operating metric for the overall health and prosperity of their business is same store or comparable store sales growth.
But really, how do you clone or scale this superhuman interviewing CFO? The web-based pre-employment assessment. Bingo. So….don’t rely on a store manager gut feeling or the “fog-a-mirror” approach? Nope. What pre-employment assessments allow retailers to do is use the same measuring stick across the board for all store hires and not depend solely on a hiring manager’s instinct.
“Intuitively, every hiring manager knows that employing better employees is going to lead to better results,” Robert Ployhart Associate Professor of Management, Moore School of Business, University of South Carolina said. “The reality, though, is that many retailers maintain a certain amount of skepticism about the value of investing in frontline service employees.”
Ployharts’ research, published in the Academy of Management Journal, sets out to provide proof to executives that hiring better people can increase sales revenue. Working with a large retail chain, they analyzed about 114,000 employees across the United States.
Dan Russell, senior vice president of Aon’s Consulting Talent Assessment division says, “operational excellence is the mantra of most CFO’s and our clients are looking for new ideas especially during the economic recovery…..and a web-based pre-employment assessments for store level managers and associates is a great high-impact lever executives can quickly implement to improve same store sales or profits.”
In fact, stores with the higher skilled employees averaged about $4,000 of sales per employee per quarter more than those stores with employees whose test scores ranked lowest. That’s an average growth of 3-5 percent per quarter, which accumulates over time and can be quite significant, noted Ployhart.
Russell corroborate Ployhart’s study, “With one of our quick serve restaurant clients, the our assessment improved annual store profit by $7,500.”
Retailers are obsessed with metrics, especially CFO’s, and when you can back it with data that improving the quality of hire, even in small 1-2% increments, will significantly improve the overall financials, well, you’ve really have got something here.
Russell adds, “The best place to start with assessments is with the store managers. They set the overall tone for the store, call the plays…and they need to motivate their employees’ everyday. What we have researched is a successful store manager needs to be both task-oriented and people-oriented. The best way to get at these behaviors quickly is a web based pre-employment assessment. “
In today’s bumpy recovery, CFO’s are pulling multiple levers─ add new stores, training, incentives, product line, supply chain optimization etc to improve same store sales. Why not pre-employment assessment? Scientific research clearly shows that using a validated pre-employment assessment improves the sales and profits at the store level
I believe HR executives can flex their “talent strategy” muscle here and present the pre-hire assessment business case to the CFO. This tool will help to improve an important retail operating metric as the 2010 holiday hiring season quickly approaches. Then, HR can drive it home, by implementing a validated, online pre-employment assessment into the hiring process for store level employees. The ROI can be measured in dollars and cents figures so that HR will have hard facts proving the value of the assessment tool.
CFO’s can also start asking HR these questions about pre-employment assessments?
- How do we assess store-level applicants?
- What assessments or behavioral interview techniques are we using today?
- Do they work?
- Do we know what behaviors or core competencies drive our high performing stores?
- What is the store level turnover?
- Do store managers know how to interview for our core competencies?
- Has the front line sales clerk job description changed over the past 5 years?
Jason Krumwiede is Vice President of Human Capital for Aon Consulting. He can be reached at jason_krumwiede@aon.com or 615.771.8155.
Filed under: Pre-employment assessment Tagged: | cfo, pre-employment assessment, recruiting tools, same store sales growth
The pre-employment assessment is a rouse. I interviewed many employees of companies throughout the Northeast. They were colleagues from my daughters graduating class, last year from University. Many classmates completed pre-employment assessments on line for a friend or even for money, depending on the job and whether the job involved on line in depth knowledge of various windows operating system functions, e mail and navigating internet explorer or even excel problems.
These phony attempts to screen competency often do the opposite and bring in employees who are of one type candidate. This stagnates the work force and often singles out those who clerk sales and others who have a passion and a natural talent at qualifying, assessing and closing the sale by asking for the sale. If we want to hire competent employees we must engage in having experienced HR departments. Often HR departments are made up by the least experienced. New HR associates who just received their certificate with the ink barely dried. These company associates do not even know the corporate mission other than have the experienced competencies in evaluating candidates for important corporate positions. Often employees that test well are not a good fit for face to face interaction. In order to find a good company fit and the skill sets necessary for the position. A season, experienced, intuitive and knowledge of the whole company, its mission, their goals, direction and desires of what makes up the corporate talent is what a company needs to acquire. Having a CFO do the job is a joke !