Blinds to Go: Staffing a Retail Expansion Essay.
The main objective of this report is to evaluate the problem faced by Blinds To Go in recruiting the right set of people and developing them in order to achieve the company’s growth objectives. The report starts with a brief summary of BTG wherein there is a discussion about the company’s hiring objectives and the changes made to the compensation structure along with reasons for the same. In order to find more suitable employees, BTG is using several channels of hiring like employee referrals, internet sourcing, newspaper advertising etc.
There were few problems which have been observed in the case that made them make certain changes to the recruitment strategy, such as the quality of workforce and unprecedented growth due to which they want to open 50 stores per year and cultural differences wherein some people agreed to the commission structure while some were satisfied with the salary based structure. `The solution objectives are about analysing the two huge periods of unrest faced by the company and also help look into why people were not interested to work with BTG once the commission structure was changed to salary based.
We have recommended a few solutions through which they can implement the job requirements in a phased manner that consist of a comprehensive understanding of the job, problem definition phase, understanding the behavioural terms of the executive and then finally a list of competencies that are required in the new employees. The company can hire people in the short time they have, by giving rewards to employees who make use of their employee referral program and customer referral programs etc. Apart from this the company must use certain schemes and development programs for its employees in order to retain the right talent. These include skills development programs, giving surprise gifts to its employees and an employee reward program.
Blinds To Go (BTG) is a retail fabricator cum retailer of window dressings and has been very successful in its field due to a unique business model and a dedicated workforce. The company has always placed tremendous importance on having knowledgeable and dedicated sales staff who are able to answer any query of a customer. In such a business, where the sales staff guides and informs the customer regarding the product, having an excellent service level is key to improving customer satisfaction. The stores usually had four positions for employees and promotions were based on performance. The four positions were – sales associate, selling supervisor, assistant store manager and store manager, with new joiners usually joining as a sales associate. The hiring process focused on ensuring that the quality of employees was good and in-line with certain criteria that BTG wanted in their sales force.
This stringent hiring process involved a store visit for the interested candidates, a telephonic interview and two personal interviews. BTG also ensured that their staffs were very diverse with an equal mix of both genders and a diverse spread age-wise from 18 to 50 years. Initially BTG implemented a total commission based structure for its sales force that not only promoted healthy competition, but kept the employees motivated as they knew their earnings would have no limit as long as they could close many sales. Subsequently this structure was changed to incorporate a salary section as well, but this was soon revoked as this structure was not motivating the employees sufficiently. Currently, BTG has in place a commission based structure that also guarantees a minimum amount even if the employee can’t make sales.
Both times that BTG changes its commission structure there was a certain amount of attrition within its sales force. Currently, BTG has several channels through which it conducts hiring – Employee referrals, Internet sourcing, professional recruiters, newspaper advertising and store generated leads. Those who join BTG through referrals are most likely to stay with the company as they are already aware of the culture and job expectations. The turnovers usually came from the first 4 months of an employee’s stay at BTG. Turnovers also occurred later if employees felt like they could not keep up with the better performers in their group. The professional recruiters hired by BTH were able to recruit only four people in a month whereas BTG needed to hire that many people in a year.
The company has been steadily expanding the number of stores across North America. In the year 2000, the company is experiencing tremendous growth, with plans of adding 50 stores per year in Canada and the United States. The vice chairman is concerned with the lack of staff in some of these newly expanded stores. Along with plans of an initial public offering within the next 2 years, senior management at BTG is concerned over recruiting the right people for its stores and determining changes necessary in the recruitment strategy and how to develop staff that will help them achieve the company’s growth objectives.
Underlying reasons due to which BTG faced difficulty attracting and retaining retail staff: •Unprecedented growth rate; planned to add on an average 50 new stores per year for the coming 5 years •Quality of staff much more important than bulk staffing when in emergency •All the 6 qualities difficult to be found in a single individual •Different culture across US and Canada especially with regards to pay •Paradoxical paying problem. If pay was salary based hiring in bulk became easier but the quality was not great •If commission based pay system was used the quality of the sales personnel were excellent but turnover was higher as people left when they though they weren’t doing as well as their peers •The hierarchical system of promoting the sales associates to supervisors and who in their turn became the assistant store manager and then the store manager was too strict and did not keep room for outside talent acquisition
•Analysing the cause of two huge periods of unrest. Once the sales dropped 10 to 30% across stores when the compensation based system was changed to salary based system. Again there was huge employee turnover when the salary based system was changed to the semi-flexible compensation based system and providing solution to prevent such abrupt employees’ turnover. •There were two major turnover points per year which have to be targeted 1.After 4 months the initial turnover
2.The larger turnover of people who were terminated due to under-performance 3.Also during the same time employees who could not perform as well as their peers left.
•Attrition rate at starting few months are very high which need to be handled properly. At the 4 month period the employees leave because they are disillusioned about their jobs. Thus before looking for candidates, the company should understand what the job opening demands for and then they can focus in finding a suitable fit for the post offered. But the following should be kept in mind before-hand: oA team should be formed who will command the job requirements in coherence with the company’s strategy oThus a general overview of the company’s situation is also required. For example, a company going for a joint venture needs different skills than a company looking to diversify into new markets. Implementation of the job requirements can be done in a planed and phased manner as described below: oFirstly, gain a comprehensive understanding of requirements of the job opening by using certain questions.
Then prioritized them, the search team needs to identify the ‘critical incidents’ or situations that the incoming executive needs to face in the future. By polling similar managers within the company, the critical incidents can be understood. Previous jobholders can also help in this regard. Listing critical incidents is however time consuming, thus, this is normally left out of the hiring procedure. oSecondly, comes the problem-definition phase. A list of competencies starts emerging however to create a final list of key competencies, a search team should start with the minimum level of educational qualification and experience required for the job. For long-term success, the search team should focus on the key competencies.
Thirdly, Care should be taken to describe them in behavioural terms in order to impose clarity. Only mentioning the adjective as a key competency tends to create an ambiguous picture. For example, the word ‘marketer’ may be construed by different people in different forms. Giving a proper definition of the word helps impose clarity to the job definition. Every job description should have the emotional intelligence competencies critical to getting the work done. oFinally, a consensus has to be reached that the list of competencies prepared ably defines the job of the new executive. Thus BTG could ask what their aspirations were and try to fulfil them accordingly.
•The employee referral program was the best source of hiring for BTG. Thus there should be better incentives for the employees. They had already set targets for the DSMs to achieve in a particular month; they could do the same with the employees. •They were ignoring a big hiring pool and not giving it enough attention. That was the walk-ins. It is said it was only successful in densely populated areas, which could be improved by making the sales job an inspirational job in the small towns and sub-urban areas. Or it can organise Walk-ins in big cities/towns and then can offer candidates with the option of joining remote location along with high reallocation amount and other fringe benefits
•Further customers referral programme can also be focused on by giving customers good incentives like discounts and other lucrative offers if they could refer to some employees. •The hiring quota for the coming year is given below. The normal course of action would be to promote 50 assistant stores manager to store manager, and then 50 supervisors to assistant store managers and then 50 sales associates to supervisors and finally hire 550 sales associates from external sources. There could be a change brought in this, that if at any level the employees are found lacking, at that particular level of job hiring would be done from external sources and not only of sales associates. PositionCurrent complementExtra personnel needed for expansion Sales Associate1000500
Asst. Store mangers15050
•As evident from Exhibit 1, that in current situation the top performing managers (Top 20%) are given $67500/yr. This remuneration is $7500 less with respect to original situation. So BTG can increase the variable component of salary from 1.5%-2.5% to initial level of 1.5%-3%. This will help the company retain top performing managers with little extra cost involved. •At the 8 month end employees are either terminated for underperformance or they leave because they are not doing as well as their peers. If BTG sees an employee with potential they could retain them by putting them through special training programs under successful sales associates.
•Internet as a source is not being much used. They could use banner ads in popular websites. •Launching Skills Development Program: Everyone is always eager to learn new things and move ahead in their career path. Thus if BTG can offer certain technical certification courses then this can act meet the soft requirements of employees in-terms of enhancing knowledge.
•Surprise benefits and Gifts: Giving some gifts at the time of one or two festivals to the employees can really make them feel good and similar activities like taking employees to free trips with families, celebrating anniversaries, sports activities, etc will help in improving the relationship between employee and the organisation. So they would be more emotionally liked with the organisation. Thus can help increase productivity and reduced turnover •Employee Reward Program: A positive recognition inspires the motivational levels of employees. Recognition can be made explicit by providing awards like star performer award or punctuality award. These employees can be award in terms of gifts or token money.