CHICAGO -- Supermarket retailers should focus on retaining good employees rather than complaining about the tight labor market, a consultant and author told a seminar at the Food Marketing Institute's annual convention here earlier this month.
"We don't have a labor crisis," said Jim Sullivan, an Appleton, Wis.-based hospitality industry expert who specializes in employee retention and customer service issues. "We have a turnover problem."
Sullivan began his career 27 years ago in the food-service industry, and helped develop two major casual restaurant chains worldwide. His consulting firm has served a number of major corporations, including supermarket companies such as Albertson's, Kroger Co. and Safeway. He is the author of "Mind Your Own Business" (Lebhar-Friedman Books, 1999).
His presentation, which focused on building employee and customer loyalty, was based on Harvard Business School research and Walt Disney Co. programs.
Sullivan suggested employees, not customers, should be at the top of a manager's list of people to please. "I don't believe the customer's always right," he said.
Employees deserve to be treated as well as customers, he said, noting it's extremely important for managers to let workers know when they're doing something right.
"You never overappreciate people," Sullivan said.
Employee loyalty falls into three categories, according to Sullivan. A quarter of workers are in the "zone of affection," meaning they love the company. About 55% of employees are in the "zone of indifference." The remaining 20% are in the "zone of defection."
Bosses tend to pay closest attention to the unhappy workers in the final category and sometimes forget about the loyal employees, Sullivan said.
"None of us have ever been overappreciated," he said.
From a financial standpoint, it's in a company's interests to keep good workers. Losing one employee costs a company more than $5,000 in lost time, advertising, retraining and business, Sullivan estimated.
He also said there's a direct connection between employee satisfaction and profitability. Internal quality drives employee satisfaction, he said. From an hourly worker's point of view, quality is determined by a number of factors beyond a paycheck and benefits. Having a likeable boss, having a friend at work, having enough employees to handle the workload, believing the company is well managed, having the tools to perform the job and working enough hours all determine a company's quality, he said.
"People don't quit jobs," Sullivan said. "They quit employers."
Managers should be creative in their approach to recruiting workers, he said. Among his suggestions are: taking out helped-wanted ads at movie theaters, dropping job applications in customers' shopping bags, staying in touch with talented people who leave the company, asking new employees about good workers at their old jobs and including job applications on Web sites.
Even shopping mall walkers are potential sources of help, Sullivan said.
"Recruiting is a philosophy, not a department," he said.
Training is also important, said Sullivan, who has worked on revising training manuals for companies, and sees a connection between training and customer loyalty.
Sullivan said sometimes managers ask him, "What if we train our team to sell and they leave?"
He said he responds, "What if we don't ... and they stay?"
Teaching employees to treat customers in a caring way is vital. Sullivan said employees should: learn and use customers' names, smile or greet all customers who come within a 5-foot radius them, make friendly small talk with customers and always speak to them respectfully.
"Use the grandma rule," Sullivan said. "If you wouldn't say it to your grandma, don't say it to your customer."
To boost sales, Sullivan offered a range of suggestions, from being creative in endcap and deli department displays, to scattering carry baskets around the stores. In bakery and deli departments, Sullivan suggested using props, such as buttons and product samples, having product knowledge cards facing servers and staging sales contests with unexpected rewards.
And employees trying their hand at suggestive selling could make more sales by nodding at the customer during the pitch, he added.