For many retail enterprises, using store managers to hire for individual locations seems like a natural solution. After all, isn’t recruitment and staffing a fundamental part of the store manager function?
Relying on local managers to manage recruitment could actually be doing more harm than good. Making a bad hire can mean wracking up unnecessary costs. According to one estimate from the U.S. Department of Labor, the cost of a bad hire is equivalent to at least 30% of the employee’s first-year earnings. And the impact can be more than just financial: drops in employee morale and productivity can quickly spread when a bad hire joins a team.
Here are three reasons why enterprises should consider taking recruitment off their managers’ plates:
1. Store managers aren’t expert recruiters
Every retail employee is a $22,000 commitment. Given the number of hourly employees hired across an enterprise, recruiting represents a serious investment.
For store managers, recruitment is just one demand on their time–and one where they may lack the expertise or resources to execute on it properly. When there are multiple competing priorities, implementing a thorough recruitment process can fall by the wayside.
However, forward-thinking companies recognize that recruitment is an investment that should be treated as a strategic priority, not something store managers need to fit in around their other responsibilities.
2. Time spent by store managers on recruitment is money lost from value-generating activities
In Canada, the average salary for a retail store manager is $44,239. Assuming a 40-hour work week, that means an enterprise spends approximately $21.27 for every hour of a store manager’s time. Every hour a store manager spends on recruitment (going through resumes, screening candidates, interviewing, etc.) therefore costs $21.27, an expense which is then multiplied across all retail locations.
Store managers are the linchpins of many retail businesses and can add tremendous value to their company. But if they’re too focused on recruiting, store managers may be forced to divert time and attention away from value-added activities and their areas of expertise. This is time managers could be spending on activities such as coaching existing sales staff to improve customer experiences or focusing on new ways to meet sales goals–all opportunity costs enterprises should consider.
3. What happens in one store has a ripple effect across the company
For any enterprise, it’s a numbers game. While it may seem like asking store managers to take on the recruitment process is a way to save money or time, often the opposite is true. When store managers can’t focus on what they’re good at, ripple effects can multiply fast. High turnover might mean store managers are always recruiting and never able to get to those business-boosting value-adds. Sales downturns in one store quickly spread. Patterns emerge at regional, national, or even international levels—and the less money that’s coming in from sales, the less money a company can reinvest in the business.
Working with a recruiting partner like Mindfield can help store managers get back to focusing on what they do best: improving their stores, coaching their staff, and ensuring high levels of customer satisfaction. As experts in retail recruitment, we help enterprises find high-quality candidates, at scale. Find out more about how we can help free up your managers’ time.
Mindfield is a Recruitment Outsourcing solutions provider that partners with companies to create powerful hourly workforces. Our solutions combine a recruitment team, simple to use technology and a data-driven hiring strategy that promises to improve the quality of your hourly workforce. This approach focuses on tying business outcomes such as sales performance, tenure, and engagement to the selection, hiring and measurement of quality candidates.