Wegmans Food Markets wins SN's Champion of Diversity Award
While Wegmans is widely known for innovative programs providing opportunities for advancement and knowledge for employees, "diversity" isn't a word the company often uses in discussing them. So on the morning SN arrived at Wegmans' Rochester, N.Y., offices to discuss the retailer's diversity efforts with chief executive Danny Wegman, he gathered other top company officials — his daughter Colleen, the company president, and Jack DePeters, Wegmans' senior vice president of store operations — to sit in on the conversation with him.
"This will be a good exercise for all of us to focus on this topic," he explained. "And by focusing on it, we can get better at it."
In the interview that followed, Wegmans executives, including Karen Shadders, Wegmans' vice president of people, explained how diversity isn't necessarily a goal in and of itself at Wegmans, but rather a result of a code of values woven into the company's business strategy. Diversity is expressed not only in the faces of Wegmans workers, but also in its thoughts and deeds.
"We define diversity as equal success and opportunity for all Wegmans people, regardless of race or gender or religion," Danny Wegman said. "The common ground we all share is diversity of thought. That's what's most important to us at Wegmans. In fact, our whole business strategy is to try to give consumers a choice they don't have at the moment. That, almost by definition, is diversity."
In honor of supporting such diversity, including training and development programs for students and at-risk youth; earning the No. 1 ranking in Fortune Magazine's 2005 list of the 100 best companies to work for in America; and for the promotion of women into executive management positions, Wegmans is the recipient of SN's first annual Champion of Diversity Award. SN made the decision based upon editors' feedback, industry nominations and consultation. A representative of Wegmans was to accept the award Jan. 22 at the Friends of the Industry Dinner at the Phoenician Hotel & Resort, Scottsdale, Ariz., during the 2006 FMI Midwinter Conference.
Diversity of Thought
"Our whole business philosophy is based on a different way of thinking," Danny Wegman continued. "We respect people who think differently, and we encourage those who, when everyone in the room says it's black, aren't afraid to say it's blue. At the end of the day we have to be in agreement, but we want people who are confident enough to express their own opinion. For that to happen, you have to have a feeling within a company that different thoughts, and different ways of doing things, are good, not bad."
Wegmans is certainly not guilty of a lack of thinking differently. Its stores radiate with differences from the typical grocery chain: They tend to be larger, livelier, and carry more fresh and prepared foods than competitors — with 400 varieties, a Wegmans' cheese counter could win a diversity award by itself. Above all, they simply appear better staffed. Officials credit Wegmans' success to the effort of employees to service customers, and in turn, the company's effort to support its employees. "We believe we have to give incredible service to our customer, but unless we give incredible service to ourselves it's hard to practice what we preach," DePeters said.
Knowledge through training and development is at the heart of the approach. DePeters estimated Wegmans spends $1 million or more on training for each store it opens, and in the case of its recent foray to new territory in Northern Virginia, more than $5 million. An orientation program emphasizes Wegmans' stated values — caring, respect, continuous improvement, empowerment and service — and endeavors to provide new employees with a clear picture of their opportunities to grow with the company, said Yolanda Benitez, manager of training and development for Wegmans.
"We not only talk about company history but about work policies and benefits, and we really focus on inclusion in the workplace because we talk about our values," Benitez said. "They get a clear picture of how to be a part of the Wegmans family."
Wegmans runs specific programs to support young and minority employees. The Hillside Work Scholarship Connection, founded by Wegmans in 1987, provides part-time employment and a mentoring program for at-risk students from inner-city school districts in Rochester and Syracuse, N.Y. The program, run through the Hillside Children's Center and supported with state funds, has been a resounding success, reducing school dropout rates to 20% for students in the program, compared with 50% for those who do not participate. A similar program in New Jersey helps staff stores in areas like Princeton with workers from inner-city Trenton. All school-age employees at Wegmans can be eligible for college scholarships of up to $6,000.
While larger community benefits are rewards in themselves, programs like Hillside have also been a boon to Wegmans, which like any supermarket hungers for part-time employees with incentives to stay in the franchise. "We found that doing what's right for the minority population in Rochester is also doing great for our business," Danny Wegman said. Many hundreds have remained with the organization on into their post high-school careers, and as a result Wegmans sees turnover rates that are well below industry averages. Because training expenses run well above industry averages, turnover is a cost Wegmans can ill afford.
According to Shadders, annual turnover at Wegmans in 2005 was 9.7% for full-time employees and 34.5% for part-timers (the latter group includes students who leave for college).
Hearing these numbers, Danny Wegman's eyes widened. "The turnover rate among our disadvantaged people is around 15%. So we're actually doing a better job with our disadvantaged people than with our non-disadvantaged people," he marveled. "That suggests to me the next challenge we face: How to give more support to everyone. That's the kind of thing we think about at this company."
Suggestions to improve can come from anywhere, and are encouraged at Wegmans, officials said. A requirement of the scholarship program is a senior project that student-employees work on with the help of coaches from their department. Projects — generally focused on a specific aspect of the store, its customers or food — are presented at a daylong event attended by Wegmans officials and parents held every spring. A brochure making recipes easier to understand and a presentation on knife skills for customers are among the student projects that have since been rolled out in Wegmans stores. The program also encourages loyalty and trust between Wegmans and its young workers. "It says to parents: Here's an organization that's listening to youngsters, that encourages a diversity of thought," Danny Wegman said.
Shadders told of a Wegmans worker who suggested a design for a special front-end workstation for a disabled co-worker. Wegmans had it built and subsequently realized a whole new workforce had opened up for it. "There's a million of these ideas, and they can only come from an environment of trust," Shadders said.
Diversity of Opportunity
Isabel Mayer, a training coordinator at Wegmans' Dulles, Va., store, started as a part-time high-school student in a Rochester-area Wegmans store 15 years ago. Fluent in Spanish, she offered to help translate for some Hispanic customers who had a question at photo finishing, and eventually went on to manage that department. A Wegmans scholarship helped her through college, after which she returned to the company, first at human resources, then to training and development. She was among hundreds of employees offered a transfer to Virginia as Wegmans prepared to open its first stores there. Her husband, Paul, whom she met in the photo department, came along and today is a grocery manager. (The Mayers are among an estimated 8,000 families — married couples, siblings, and employee sons and daughters — employed by Wegmans).
"Many people talk about the corporate ladder but the analogy I like to use is the corporate tree," Mayer said. "There are so many branches you can go to."
Wegmans encourages its workers to gain experience in as many departments as they like, fostering a "diversity of opportunity" its officials say provides benefits for its workers and itself.
"It's something we believe in strongly because it helps one gain an appreciation for what other people around the organization do, and it's more fun," said Colleen Wegman, who prior to being named president just over a year ago served as a store manager, a senior vice president of merchandising, directed e-commerce and developed Wegmans' natural/organic department. "It also provides a constant challenge, and a learning atmosphere that we want here."
"There's a limit to what we can pay people," Danny Wegman added, "but the amount of opportunity we offer is limited only by our imaginations."
Opportunities — particularly for women — have broadened as the grocery business has changed in recent years, Danny Wegman explained. "One of the things that helped us with diversity is that the business has evolved in ways that are more knowledge-based than physical work-based," he said. "And as our business has changed, having more to do with selling and knowledge and how to use the various products we sell, I think it's become more woman-friendly."
Wegmans stores also increasingly reflect a multicultural workplace, particularly as the retailer expands in places where unemployment is low such as Northern Virginia. That has required Wegmans to train managers to be proficient in conversational Spanish, and in some cases arrange English classes for in-store employees. Some Web-based training programs have been translated to Spanish and Mandarin Chinese, said Benitez.
"We try to meet the employee halfway," she said. And to meet the needs of multicultural shoppers, Wegman employee nametags today include the languages they speak, written in the respective languages.
When it sensed the importance of minority workers in the food industry, Wegmans began to seek to staff its stores with 50% minority employees. "I remember there was a store where we were just under 50% diversity," Shadders said. "And I said to Danny, 'When we get to 50%, what do we call it then? If it's over 50% you can't call it a "minority" anymore.'
"I never forget what Danny said," she continued. "He said, 'We'll call it the future.'"