Smart Labor Strategies for Small Operators
NATIONAL REPORT — For independents and small convenience store chains seeking to hire and retain employees, the deck may seem stacked against them. Likely unable to pay the same salaries that large c-store chains can, as well as having less money available for technological upgrades to help solve today’s labor crisis, the industry’s small operators face unique challenges.
Large c-store chains are currently offering hourly salaries in the $15- to $20-per-hour range. They also offer paid time off, tuition reimbursement, overtime at time and a half or double time for holidays, as well as a full benefits package, including medical, dental and vision insurance, according to Mark Millman, president and CEO of the Maryland-based Millman Search Group, a 40-year-old hospitality and retail recruiting firm.
“Companies are also adding sign-on bonuses for employees after a 60- or 90-day period. Employers are doing everything they can to attract and retain employees,” he said.
Due to these impressive packages being offered by large retailers, some small operators have had to close their doors because of lack of staff. Even some bigger c-store chains have had to close locations due to staffing shortages, noted Millman.
There is some good news, however. Small operators are armed with aces up their sleeves that they can use now to hire and retain employees, and better compete against bigger players.
Examining what employees seek most beyond money is a good first step.
“Beyond competitive pay, frontline workers are looking for changes that will have a positive effect on their work experience in a way that also complements their personal lives outside the workplace,” said Rob Klitsch, director of the retail, hospitality and foodservice practice at UKG, a global provider of payroll, human resources services, and workforce management solutions. “A life-work balance is the ultimate goal. Employees who feel valued and excited about their work build positive and productive relationships with the customers they serve, driving sustained brand relationships and helping the bottom line.”
Employee flexibility is extremely important, echoed Millman. “Employees are asking for quality of life, time off and not working ridiculous hours, so they can spend time with their families,” he said. “Beyond that, employees want an employer who truly cares about them, their well-being and treats them well, while providing a safe and friendly environment. Employees want to feel good about going to work and be around someone they trust.”
The promise of training and incentive programs based on sales are other ways small operators can draw in and retain employees. “A big thing we’ve seen is new hires start as an hourly employee, but then begin a management program and become an assistant manager and eventually a manager, where they can get nice salaries and benefits,” Millman said.
Small operators can also stand out from their competitors by seeking feedback about the employee experience and, most importantly, taking action and proactively communicating the action plan. Employers should ask their workers: What do they value today and therefore should be sustained and recognized as a win? What changes would they like to see to elevate their experience? Why do they stay in their role and what is keeping them working here?
“The most critical element, however, will be to follow up with the actions that demonstrate your commitment to improving their experience,” Klitsch relayed.
Small operators should take the time to define career paths and create opportunities for employees to learn and grow. “Establishing a mentor program as part of this journey is a great way to make an immediate impact,” noted Klitsch. “In fact, there’s value for both the employee and the teacher, empowering all involved to contribute a larger role beyond day-to-day tasks.”
Investing in employees’ wellbeing is yet another way small operators can differentiate themselves and be a more attractive employer. “Think through simple programs that invest in their physical and mental wellbeing,” he added. “For example, providing health precautions to counteract ongoing risks or offering additional days off for mental health or self-care.”
Do Not Ignore Economics
Although the industry’s small operators may be unable to compete on wages alone, they cannot completely ignore economic factors. Inflation woes have exacerbated the labor crisis.
“[Inflation] is now offsetting some of the wage increases that may have been taken to attract talent in this competitive hiring market,” said Klitsch. “To help stand out among competitors, recognize your workers’ loyalty by offering financial incentives –– even small increases go a long way. Perhaps this includes loyalty bonuses, or gift cards for groceries, gas or mobile phone providers, to help offset everyday living expenses. Again, listen to the employee voice to determine what will be most impactful to your people.”
Economic incentives can be made in other ways, too. An employee stock ownership program (ESOP), where every employee participant owns shares of the parent company, is a great perk to offer, according to Millman.
“Managers basically become unapproachable by other companies and cannot afford to leave because they have so much money tied up in the ESOP program,” he explained. “It really helps retention and reduces turnover. When managers do decide to retire, they are often very well-off [financially]. They would never be able to achieve the same amount of money in other operations.”
One thing small operators should definitely not do is simply wait until the labor crisis is over.
“I do not foresee the labor situation improving in 2022. I do not see this letting up for at least one year from now,” Millman predicted. “There are major, dramatic staffing shortages throughout the country in the hospitality industry, which includes convenience store retail. Any company trying to attract employees has to make a major overhaul to their benefit, compensation and bonus programs.”