Expert says: 'Hire the attitude, train the skills'

Michigan Retailers Association recently teamed up with HRgems to provide a new member service: TraitSet‘, an online employee screening tool. Phyllis Martino, Marketing Manager at HRgems, interviewed MSU business professor Dr. Bonnie Knutson about retail hiring challenges and TraitSet. For more information about this new service, visit MRA’s homepage.

Martino: What do you see as the major human resource challenge facing retailers?

Knutson: A major challenge in any industry—especially the retail industry—is the pressure placed on profit margins. This pressure is a result of consumer resistance to price increases on one end and the rising costs of doing business—particularly labor costs such as benefits, health insurance, etc.—on the other end.

Embedded within labor is the cost of recruiting and retaining quality employees. The retailer’s challenge is to find, hire, train and keep employees that “fit” with the vision and mission of the business. Finding this match is a major challenge today.

If a business can recruit those employees who share the values, beliefs and attitude exemplified in its mission statement, it improves its chances of increasing the contribution that employee will make.

Training can help employees acquire new and necessary skills, but if the fit isn’t right, the employee is usually not a long-term addition to the business.

It stands to reason that the longer a business can keep a good employee, the more valuable that employee becomes, because he or she comes to know both the business operation and customer needs better than “revolving door” employees.

Martino: How have businesses addressed or attempted to address these issues?

Knutson: I can tell you that according to the University of Michigan’s American Consumer Satisfaction Index, there is a lot of room for improvement in all sectors of the economy. Business seems to do a good job of talking the talk, but not so good walking the walk when it comes to building the employee base that provides top-notch customer service.

Martino: How might internal (employee) theft impact a retail organization?

Knutson: A business cannot bank sales or revenues. It can only bank profits. There are only two ways to increase profits: increase prices or decrease costs. As I mentioned, in an era of competitive pricing, it becomes more difficult to increase prices.

Therefore, to maintain or increase profits a business must hold the line on or decrease costs. Employee theft is a variable cost, not a fixed cost—the cost of theft can vary down to zero or it can escalate to eat away at profits.

If, before a person is hired, a business can identify that person’s propensity to be tempted to commit theft, it would be valuable information. This information could be entered into the overall “hiring equation” before any job offer is made.

Martino: How are the costs of employee theft dealt with?

Knutson: As I mentioned, internal theft is a variable cost of doing business. It varies in percent from industry to industry and from business to business within each industry.

Any “cash” business is more susceptible to theft without internal controls. But theft can also be in taking product, supplies or in “giving some extra” or “free” to friends and family.

To combat internal theft, any business has to first, hire the “right” people; second, provide a working environment that rewards employees so that they don’t feel they are being short-changed and, therefore, can “take” just to make up for what they aren’t getting what they feel they have earned or deserve; and third, provide internal controls and procedures to monitor inventory and receipts.

Martino: What character traits are best suited for working in a retail environment and why?

Knutson: This is a tough question because the traits that are best for one retail category may not be the best for another type. A technical support service business has different needs than a gas station.

In general, the adage of “hire the attitude and train the skills” seems to best apply here. Honesty, customer service and leadership are all valuable traits for retail staff.

Martino: How would knowing an employee’s potential for these characteristics prove useful for an employer?

Knutson: Information is power. Incomplete information can lead to wrong decisions.

Therefore, the more that a business can legally discover about potential employees—especially relative to value characteristics—the better the business can evaluate the potential fit between the prospective employee and the company’s mission and goals.

Martino: How do you feel TraitSet‘ can benefit the retail industry?

Knutson: I see TraitSet as a tool to help businesses identify best fits between employer and employee. TraitSet provides real-time, accurate information to the business about the characteristics of the prospective employee that are important to that business.

It is simple to use for both prospective employee and management. Moreover, it is an effective means to identify prospective and current employees who possess the attributes or traits that the business needs in its employees for profitable growth. They are, therefore, more likely to stay with the company—thereby reducing recruiting and retaining costs.

The better the information, the better the decision—the more likely that the company will hire the employee that best fits its core business and values.

Bonnie J. Knutson is a professor in the School of Hospitality Business at the Eli Broad College of Business at Michigan State University. An authority on emerging lifestyle trends and creative marketing strategies, she often consults with business leaders who want to understand and take advantage of changing consumer demands.

Her work has been featured in publications such as The Wall Street Journal, USA Today and on CNN. Her articles appear in numerous business publications, and she is editor of The Journal of Hospitality and Leisure Marketing.