Weak Economy Creates Hiring Opportunities

ELLIOT ZWIEBACH and MARK HAMSTRA

The economic downturn is creating some opportunities for food retailers to bolster their staffs with new hires, supermarket operators told SN.

In addition, SN examined some supermarket training programs around the country and found a variety of initiatives that supermarkets have been undertaking to cultivate leaders at their own organizations.

As one example of a company leveraging the economic downturn to its advantage, Associated Food Stores, Salt Lake City, is hiring people from other industries and, in some instances, “stockpiling” them until jobs open for which they are qualified, Dick King, vice president at AFS, told SN.

“A higher quality of people is coming to the stores for jobs and a higher quality is also coming to the office,” he said.

“We're looking at succession planning now — to determine which areas we are weak in and where we need to strengthen our operation for the future — and this is a perfect time to hire some of these people.

“We're being very cautious, but we want to look to the future to ensure we are staffed right for when the economy improves.”

Some new hires at the retailer and wholesaler have lost jobs in its operating area, which covers a large swath of the Western U.S., while others want to move back there, King explained. They come from a variety of industries, including CPG companies, other forms of retail and other industries altogether.

“So we're not just seeing people from the food industry. We've looked at people with outside experience, including people from Target or ShopKo who can help us in the center of the store,” King explained. “They have a higher level of experience and stronger backgrounds than the people we saw a year or two ago.”

Traditionally, the company saw a lot of recent college graduates — and it still does, including some from Brigham Young University's supply-chain management program, but many resumes now include much more work experience, “and that's a plus to us because we can get some good people,” he explained.

“We're not hiring a lot, but we are interviewing these people, and we have offered some of them jobs that are not quite at their level but we promise them that, when there's an opening, we will move them.”

For example, AFS recently hired a district manager from Target, and even though the company has no openings for district managers or even for store directors, it anticipates that there will be openings in two or three months.

“We hired him as an assistant manager so he could learn our systems, and when we had a store director opening, he got that, and when the time is right, we will consider moving him to a district manager,” King explained.

“It's a matter of getting the right people first, and then getting them in the right seats. We might have to pay them a better salary to keep them, but it's worth it in the long run to be prepared for when the economy shifts.”

For Associated's corporate stores, the majority of store directors come from within the business, King said, although it has also brought in some from other supermarket banners.

All outside employees and those promoted from lower levels of their companies must go through a certification program that requires them to work in the perishables department and Center Store before they become a manager.

“We would rather promote from within, and our training programs are geared to training people within the stores to become store directors,” King said. “But if someone comes to us from outside the company with the right skill set, we will look at him. But we don't do much outside recruiting for store directors.”

For management candidates, the company has AFS University, where professional educators instruct people in leadership.

Currently, the distributor has three people going through its Retail Management Training Program. All three spent six months working in all departments among the corporate stores, then attended the Food Industry Marketing program at the University of Southern California, which ended in April. Through the summer they will work outside of Associated — at Associated Wholesale Grocers, Kansas City; Wakefern Food Corp., Keasbey, N.J.; and Unified Grocers, Los Angeles; as part of those companies' summer internships — before they come back to work in Salt Lake on a full-time basis.

HY-VEE EXPANDS RECRUITING

Ric Jurgens, chief executive officer at West Des Moines, Iowa-based Hy-Vee, said his company also is being proactive in its hiring practices.

The weak economy and the layoffs that have accompanied it have “created a larger pool of candidates as we look at any position,” he told SN.

“That's one of the reasons why we are expanding our recruiting efforts, as opposed to retracting. We feel we need to invest in some of the employees that are available today, get them into a training process, so they are ready as we open new stores to take on leadership roles for Hy-Vee.”

Promotions at Hy-Vee come largely from within the company's own ranks, however, Jurgens explained.

The company offers a variety of training options, including tuition assistance and online training courses for entry-level managers to help them prepare for advancement. The Hy-Vee University training program, which combines classroom instruction with hands-on experiences in the field, is a past recipient of FMI's Maximizing Human Potential (MAXX) award.

“Also, our decentralized business structure is a great teaching tool for our young managers and corporate personnel,” Jurgens added. “The entrepreneurial spirit allows them not only to be creative, but to take risks, which helps them develop good decision-making skills.”

He said the basic challenges to providing good training remain static.

“It's about finding the right methodology to train people, and then the diligence to do it effectively,” he said. “But today's candidates are smarter and more experienced than they were in the past, so it is actually easier to get them trained and to bring people into the family effectively.”

RESTAURANT FALLOUT IS RETAILER'S GAIN

Steve Smith, CEO at K-VA-T Food Stores, Abingdon, Va., said his company has benefited from the slowdown in the restaurant industry, which has enabled him to pick up some former managers of casual-dining restaurants to work in the chain's deli and prepared-foods areas.

In addition, he said employee turnover at K-VA-T has slowed considerably — a fact he attributed both to the weak economy and to programs K-VA-T put in place to improve the workplace environment and improve retention.

“I think down economies have lots of disadvantages, but certainly retention and the opportunity to get good people is one of the positive things to come out of a down economy,” Smith told SN.

He said the supermarket industry's reputation as a reliable, steady employer that is expected to be around for the long term has helped in the recruitment of foodservice personnel at the store level.

“We have been able to pick up some people form the restaurant industry for our bakeries and delis,” he explained. “We can go out and find a casual dining manager that wants to get away from the uncertainty, and maybe the hours. While they don't know everything about our business, they understand foodservice and taking care of the customer and so forth.”

He also said he believes demand has eased for pharmacists, long one of the industry's most in-demand professions.

As part of its own effort to reduce turnover, K-VA-T has taken several steps to become a “preferred employer,” Smith explained.

Those include keeping pay scales “ahead of the curve” and being more flexible on work schedules.

“We are dealing with a different workforce than some of us grew up with, and we have made some positive changes to work with our people on getting time off,” he said. “And I think we are getting results as well — the real winner is the consumer, because they get to see the same familiar faces. Anytime you have high rates of turnover, it is disruptive for your customers more than anybody.”

SAVE MART TRAINS ACQUIRED WORKERS

After Save Mart Supermarkets, Modesto, Calif., acquired 128 stores in Northern California from Albertsons LLC in early 2007, it spent most of the year physically converting the Bay Area stores to the Lucky banner — a banner Albertsons had abandoned but which Save Mart was reviving.

In the course of the acquisition, all store-level people from Albertsons became Save Mart employees, along with two vice presidents and four senior directors.

By early 2008, a year after the store integration began, Save Mart was ready to focus on “people” issues, according to Wendy Kennedy, vice president, corporate communication and development.

Some executives had only worked for Albertsons, while others had been with Lucky when Albertsons originally acquired those stores years before and changed the name, and now they were all working for Save Mart, “so there were really three cultures we were dealing with,” Kennedy said.

“But the Save Mart culture is important to us, and the challenge was to bring all the executives together in terms of best practices and how they thought about managing, and that's been quite a ride — and it still is,” she added.

The first step was to develop new mission statements for the Save Mart stores, its warehouse-style Food Maxx units and the new Lucky stores, plus one for the entire company, Kennedy explained.

“Putting each of those statements together helped bring clarity to our differences and also helped bring unity to our similarities,” she said. “The mission statements reflected the core beliefs we've always held at Save Mart in terms of customers, employees and store service while also reflecting some of the marketing and operating differences from the Albertsons and Lucky cultures.”

Early in 2008, Save Mart conducted separate focus groups among store managers, corporate managers and executives “to determine what was working, what areas were still challenging and what questions remained about leadership and communications, and what Save Mart expected,” Kennedy said.

To keep management functioning at a high level, Save Mart partnered with Harold Lloyd, the industry consultant who had just published his book, “Am I the Leader I Need to Be?”

Lloyd conducted a series of leadership seminars with Save Mart executives, from store directors up, to help them understand what they needed to do to help lead the company forward.

Save Mart already had a “next-generation leadership initiative” in place for store-level personnel, “and we needed to take that concept higher up — to give the executives the opportunity to look in the mirror to see if they were the leaders they needed to be,” Kennedy explained, and Lloyd's workshops filled that purpose.

“During the meetings, each executive was asked to stand up and answer the call and commit himself to helping move the company forward,” Kennedy noted.

Following the seminars, “the executive team pulled together to take ownership of their jobs, with each one accepting the responsibilities in his area.

Last September, Save Mart held an off-site meeting for its new leadership team, from store-level managers up. Later in the month approximately 20 executives from the vice president level up met at a retreat “to talk about how we could continue to be who we say we are,” Kennedy explained.

In addition to the off-site gatherings, the executive team meets in alternating months to review the progress of the business, and in the months in between, they meet on a less formal basis on a Saturday morning “to revisit where we are and ask ourselves whether we're living up to our mission and our commitments and whether we're the leaders we want to be — so all of us are willing to accept accountability.

“It's a conscious effort to refocus on the commitments we've already made and to reenergize ourselves and redefine what the new Save Mart stands for.”

SUPERVALU GETS COLLEGE CREDIT

Minneapolis-based wholesaler Supervalu has expanded a training effort in which its existing, in-house Supervalu University training effort has been linked with a local university and is now providing college credits and even a path to a bachelor's degree.

In partnership with Concordia University in St. Paul, Supervalu launched the Food Retailing Merchandising, Marketing and Management program as a pilot last fall and began offering courses online in a pilot program in March. A total of 30 students are enrolled — 15 each in the classroom and online — with a targeted graduation of next May. The students are all employees of Supervalu and Minneapolis-area retailers.

“There are some great university programs out there, but they weren't meeting the needs of the industry,” said Christine Walsh, director of independent marketing and education for Supervalu, in an interview with SN last week.

She said many of the university-level training programs are intimidating for rank-and-file workers, and others seem more geared to develop personnel for the CPG industry. What makes FRMMM more accessible, she said, is that it is geared specifically for the supermarket industry, with courses that focus on such topics as managing a part-time workforce, coping with product recalls, and understanding the supply chain from the farm to recycling.

The program is supported by a $400,000 grant from the State of Minnesota Department of Employment and Economic Development. It is geared both for traditional college students as well as adults seeking to complete a specialized degree.

The grant allowed Supervalu to enhance the coursework at its own Supervalu University training program, which offers development and training for both its independent customers and its own employees, and put 30 of the courses online. Individuals who complete 15 hours of coursework can now earn one academic credit at Concordia University toward a bachelor's degree.

“With its focus on food retail, this degree is among the first of its kind in the nation,” said Craig Lien, associate dean of the College of Business and Organizational Leadership at Concordia. “The partnership enables us to reach a largely untapped education market that has already identified its need and has worked directly with Concordia University to co-create a program that fulfills the need.”

Students who have completed two years of basic coursework at another college can complete the degree in 18 months, Walsh explained.

RALEY'S SEEKS AN ENERGIZED WORKFORCE

Bill Coyne, president and CEO at Raley's Supermarkets, West Sacramento, Calif., began wondering several years ago how to leverage “the great assets our colleagues represent.”

So he hired Joan Miszak, a Ph.D. in organizational behavior, as senior vice president of organizational effectiveness “to figure out how we could be more effective and efficient at having the most energized workforce in the U.S.,” Coyne said.

The program has energized the workforce, he said, “and made them excited to serve customers and to do their jobs in ways that exceed customer expectations.

“We felt that, if we have a truly engaged workforce that felt good about the company and saw the company as a career path, then we could move the needle in that direction.”

The program was built on the premise that the most important person to an employee is his direct supervisor, Coyne explained. “So we came up with a cascading model of leadership in which we train one group of colleagues, who share their learnings with the next level, like a cascade, with everyone in the organization having responsibility for passing the message further down the line.”

Raley's developed two sets of metrics to measure its progress — one to determine the level of colleague engagement, the other to determine if colleagues were following up by engaging customers enough so that customers would promote the company by word of mouth.

To get colleagues involved, Raley's developed a 20-question confidential survey conducted once a year that's available to the chain's 15,000 employees on any computer, and the response rate has been averaging 82%, Coyne said.

“Each year we identify three or four corporate priorities, and the first coaching guide of the year talks about those priorities in general and sets the stage for more detailed discussions later on.”

The guides go to store directors, who spend 15 minutes talking to department heads, and then the department heads talk to people who work for them, and gradually the information cascades down.

Sidebars: Intern Eyes Managemetn

Tyler Nelson, 27, has worked for Associated Food Stores, Salt Lake City, for more than six years, spending six months as a stocker at one of the corporate stores before moving into loss prevention at the corporate office. He had majored in international studies at Utah State University, with the goal of going into international business or homeland security, but once he got married, he looked for work closer to home, which is why he applied at Associated.

While working in loss prevention there, Nelson recalled, he was approached by Dick King, Associated's vice president, “who told me the industry was about more than bagging, stocking and checking skills — that there was a lot more behind the scenes that might be appealing.”

King told him about Associated's management internship program, which would allow him to rotate through the company's various departments, attend the Food Industry Management program at the University of Southern California “and then come back here and work in a position that suited me.

“What interested me was the ability to find out what was out there, plus all the experience it would give me and then finding a position I would enjoy,” Nelson told SN.

As he entered the USC program, Nelson said he expected to get a broader perspective on the food industry and to get to know a lot of people and build a social network.

“I did get very close to my classmates, and hopefully I can maintain those contacts and get their help if I need it later in my career,” Nelson said. “But I also learned a lot about myself as a leader and manager and the potential I have to impact the grocery industry, and I'm looking forward to applying what I learned at Associated.”

Before that happens he will complete his internship process working for the summer at Unified Grocers, Los Angeles.

Once he's back at Associated in the fall, Nelson said he's not sure what he'll be doing. “At the beginning of the internship I spent a lot of time in human resources and working on training and retention programs, and the idea of working with people and helping them with their careers appeals to me, and if there's an opportunity to do that, I would like that.”

Intrigued by Food Retailing

Joseph Bailey, a 29-year-old management intern at Associated Food Stores, Salt Lake City, told SN he got interested in the food industry while he was a marketing student at Utah State University working at the school's creamery and ultimately working as manager of the on-campus dairy store.

“I really enjoyed working at the creamery and the store because I learned that, in the food industry, there's never a dull moment, and if you don't have something to do, it's because you've forgotten something,” he told SN.

“The industry intrigued me. It's an exciting industry. It's fast-paced and requires a lot of creativity to stay different from the competition.”

Bailey attended the University of South Carolina for an MBA in international business, then moved back to Utah with his wife and got a job at Associated.

As a management intern, he and two other trainees rotated through the entire Associated operation — picking orders, riding on trucks, working with the transportation department to learn routing , and working in marketing, advertising, finance, accounting and human resources — “to get a general overview of how everything works and fits together,” he explained.

During his time at Associated he and the other two interns set up a home-meal replacement pilot at one store for a multi-store operator, “and it turned out well enough that the store adopted the plan, and I hear it's very successful,” he said.

As part of the training process, Associated sent Bailey and his two colleagues to the Food Industry Marketing program at the University of Southern California — an intense 14-week course. “It was comparable to going through an MBA program in three months,” he told SN.

Of his four courses — marketing, accounting, business communications and business leadership — he said the business communications class helped him the most “because it taught me how to communicate better with people in the business. The other classes helped me to review what I had learned in the MBA program.”

He said he enjoyed interacting with the other students, who ranged in age from 26 to 53, “and learning about different aspects of the industry and how different companies approach things.”

Bailey will complete his internship working through the end of August at Wakefern Food Corp., Keasbey, N.J., where he expects to rotate through various jobs at the offices and some Shop-Rite stores.

He'll return to Associated in September, though he's not sure what he will be doing there. “I'm a marketing person, but where I end up will depend on what their needs are.”