In This Chapter

Staffing your store can be one of your most difficult challenges. You must decide how many employees you should hire, how much you should pay them, what they will do, and what qualifications they must have. After you hire the people you need, you’ll have to train and groom them to be the type of sales associates you want and need for your store.

Attracting the right people for your store, educating them, and keeping them motivated are an absolute must if you want to succeed. In this chapter, I discuss how you establish staffing requirements, attract the right people, select the best among those you have attracted, and then train and motivate them to sell and amaze your customers every day.

As you get ready to start hiring sales associates, you will need to understand that not everyone can work in the retail business. There are some “square pegs” out there that simply will not fit into the “round holes” your business offers. You cannot take just anyone and mold that person into a good employee for your store.

Your choice of sales associates will be critical to the success of your business. A mistake in staffing is fundamentally different from a mistake in something like your buying. When you make a buying mistake, you just take out your red pen, record a markdown, and learn from the experience. But you cannot do something equivalent with your staffing mistakes. Labor laws in some states and provinces see to that.

Termination is an area fraught with legal landmines, and, in any case, most business owners hate firing an employee. It is much better for all concerned if you simply avoid the whole situation by hiring properly in the first place.

If you do make a mistake and hire the wrong person, you will definitely lose customers because they will not be treated appropriately. That alone could end your relationship with a customer who might have had a “lifetime value” of $50,000 or more to your business. A square peg can also destroy the team spirit of all the “round pegs” that are doing a good job for you. The square peg can aggravate both your customers and your staff.

The entire experience of hiring a square peg wastes time and money. You will have invested significant time in training the square peg and paid full wages to a less than productive person. You will then throw all of this away as you start over with someone new.

Before you start hiring people for your store, take the time to develop a written job description for your staff and, most important, your sales associates. The job description should define the perfect sales associate for your store. Perfect cannot be an ever-changing notion in your head. Having a printed document will give you something to refer back to, pass around, and measure applicants against.

As your business evolves, you will no doubt revise your job description for sales associates to keep it current. However, you should not use this as an excuse to avoid putting pencil to paper now, even if you just come up with a preliminary sketch.

You may wonder how you can even get started writing a job description. In case you need some help, here is a sample job description appears later in this chapter. Now let’s take a look at how you develop each section.

You should always start with a job title. People like having a job title that explains what they do. They find it much easier both in the store and when out with friends if they can tell others that they are a “something.” As a job title, “sales associate” has been around for at least 100 years. When it denotes a true professional, as it always should, this is a title that people can be proud to have.

The next section provides a summary of the sales associates’ duties and responsibilities. This will be a thumbnail sketch that you can use when discussing the job with other people, but you will need to create the duties section of the form before you fill in the summary section.

The people who work for you must have a clear understanding of the reporting relationships in your business if you want to avoid needless he-said-she-said conflicts. You must make it clear at the outset that the sales associates report either directly to you or directly to the store manager if you employ one. In the latter case, the sales associates might report indirectly to you.

The core of the sales associates’ job description is a list of their duties in the order of priority and the relative importance of each duty to the total job. This is the section of the document that you really need to get right, but it is the toughest one to think through.

For example, you should not list a duty that says sales associates must, “Be nice to customers. ” This is not specific enough for everyone to know what it means. You could waste time in endless debates about whether this or that behavior qualifies as “nice to customers” and the whole point of having a job description would be lost.

Instead, you need to list a duty that says sales associates must do something observable and measurable—in language specific enough for everyone to know what it means. This could be something like, “Make customers feel welcome in the store by giving them a warm and friendly smile and saying, ‘Good morning’ within fifteen seconds of them entering the store.”

In the sample job description, I have allotted just eight lines for the sales associates’ duties, but as you start to think through what you want your employees to do, you likely will realize that they will be doing hundreds of things every day. You can’t list them all, so you need to prioritize their duties and then list the top 8 to 10. Setting a percentage of importance helps your employees know where to focus their efforts.

You really need to decide what you are trying to achieve in your business before you can assign a relative importance to each of the sales associates’ duties. If you place a high importance on housekeeping, you will have a clean and neat store. If you place a high importance on greeting customers, you will have customers that feel welcome.

I do not doubt that you will want to have a clean and neat store, but in your mind, is that clean and neat store more or less important than welcoming your customers? Or are these two tasks more or less important than having your sales associates spend more time with customers and consistently suggesting additional items for a complete solution to the customers’ needs?

Once you have established the duties, then you will be able to write the narrative summary of the sales associates’ duties and responsibilities. This is the thumbnail sketch you will use when discussing the job with other people.

As you define your sales associates’ duties, think about what you want them to achieve. Prioritize these duties and list them in order of importance. Here is an example of a priority list based on the nine steps of selling in my book, Retail Selling Ain’t Brain Surgery, It’s Twice As Hard:

While the sample job description provided earlier identifies duties and responsibilities in general terms, here we dig deeper and define them in behavioral terms. This will ensure that any new hire or current hire knows exactly what duties she is responsible for and how she should perform those duties for best results.

After you’ve clearly identified the duties and their priorities, you then need to think about the characteristics you want your sales associates to have in order to do the job. In other words, you will not hire anyone who does not have the characteristics on this list.

You’ll see that having a positive attitude tops the list. It is tough to measure this scientifically, but you will know one when you see it. People with a positive attitude tend to approach things with a “go for it” mentality and see life as a glass that is half full instead of a glass that is half empty. People with positive attitudes make significantly better sales associates than people who are less positive.

You want candidates with a degree of extroversion— outgoing but not overbearing. Shy people just do not make good sales associates. The job entails meeting new people and building long-term relationships with them. Candidates who have trouble looking someone in the eye will be hopelessly lost when it comes to having the two-way conversation that is crucial to understanding a customer’s needs.

Sales associates also need a healthy ego. The day-to-day life of sales associates involves a certain amount of skepticism and rejection. Customers tend to doubt what they hear and they often say no. If your sales associates feel okay about who they are and have a high level of self-confidence, they will understand that this is not directed at them personally and they will not get discouraged.

You also want to find people who have empathy. This is the ability to identify with another person’s situation, feelings, and motives—to stand in another person’s shoes and see things from that perspective.

Selling professionally involves asking a series of good open-ended questions, listening to the answers, and responding with an appropriate merchandise presentation that is what the customer needs and not what the sales associate feels that they should buy based on their taste or value system. A sales associate might feel that $1,200 for a barbeque grill is a huge amount of money, but if this is what the customer is willing to spend to have the perfect solution, that is what she needs to sell the customer. The customer’s value system (and purchasing power) might be different from the associate’s, and the latter needs to look at things from the customer’s perspective. Empathy enables a sales associate to present merchandise that meets a customer’s needs.

Other necessary characteristics could be things like friendly, goal oriented, neat in appearance, and willing to learn.

Under the heading “necessary qualifications,” you should list the qualifications that people must have in order to do the job. In the case of qualifications, you can hire people who do not have every item on the list initially because you can always provide training to help them become qualified. As was the case with characteristics, you need to walk with caution here because you are on shaky legal ground.

The retail industry does not have an “appropriate authority” that tests and certifies sales associates. The skill set that people need to work in your store could be very different from the skill set they would need to work in another retail store. This leaves you—and hundreds of thousands of other owner-operated retailers—on your own to set qualifications and standards.

If you operate a store that sells only high-performance racing bikes, it would be considered fair in most jurisdictions to require that your sales associates have a high level of experience with those specialized vehicles. A “weekend athlete” might simply not be able to answer the technical and performance questions posed by your knowledgeable customers.

It would also be fair in most jurisdictions to require that your sales associates have a life experience that is appropriate to the store’s target customers. For example, an individual who has some personal experience with travel would probably be better qualified selling travel accessories than somebody with no travel experience, because he would better understand the difficulties that travelers face.

You also can require proficiency with math in most jurisdictions, because your sales associates will be dealing with cash, checks, and charge-card transactions. Have you ever shopped at a store where the sales associate got confused while recording a multi-item transaction or could not count the correct change even when the cash register indicated what that change should be? Do you really want to put your customers through that kind of torture?

Legal issues aside, you need to be careful not to set qualifications that screen out potential “superstars.” Do people really need a college education to work in your store? If so, then list that as a necessary qualification—but spend a lot of time asking “why” before you do. Remember, you may find a candidate that doesn’t have product knowledge and technical skills to the necessary degree and yet is just perfect for the job because of her attitude and people skills. If that’s the case, hire her and then train her on your product so that she can reach the desired level of competence.

When developing the objectives section of the job description, lay the foundation for much of the coaching work you will do with new sales associates during the first three months of their employment. (I discuss coaching in Chapter 17.) These objectives will be the yardsticks by which you ultimately measure your new sales associates’ success or failure.

Your list of objectives should be your expectations for the first three months of employment, which includes specific objectives that new sales associates must meet during their “probationary period.” In most jurisdictions, employers have a certain time during which they can dismiss new employees without legal notice, “just cause,” or severance pay.

This probationary period exists because people make mistakes. No matter how careful employers are in their hiring and employees are in their job searches, things sometimes just do not work out. The probationary period lets either side walk away without penalty. After the probationary period is over, different rules govern the employment relationship. You will find it critical that you read and understand all of the employment laws that apply in your jurisdiction. If something isn’t clear to you, consult your attorney to be sure you don’t run into problems with the Labor Department or end up with a lawsuit.

Your sales associates’ main objectives are their sales goals. You are hiring people who have the job of selling to customers. While you may want to allow for some kind of a learning curve, new sales associates must get up to speed quickly in order to become productive members of the team. You should express their sales objectives in dollars per hour, because you cannot know for certain how many hours per week people will be working three months after they start.

You also want to set average-transaction objectives. Thirty percent of their job is suggesting a complementary product for a complete solution of the customer’s needs. The main product will look, feel, taste, or perform better with all the additions that sales associates (who are the experts) should always recommend.

Other objectives to be met in the first three months could be things like completing the store’s standard new-employee training program, learning how to create an in-store display, and learning how to shut down the POS system at night. These are not as crucial as average transaction, but they are good things to include.

You may have noticed that I am not drawing any distinction between full-time employees and part-time employees in our job description. This is because your customers do not care whether sales associates work full time or part time, they only care about receiving professional service. All of your sales associates should have the same title, duties, characteristics, qualifications, and objectives. The number of hours they work should not enter the picture.

You should develop a printed job application form so that every candidate who applies for a job will be providing the same information and answering the same questions. If a candidate has a written resumé, she can submit it with the application form, but she should still answer all of your questions.

The best way to develop a job application form is to visit some of the major retailers in your area and get copies of their application forms. These stores will undoubtedly have sought expert legal advice when designing their forms, so you should be able to find out what you can and cannot legally ask in your jurisdiction based on a close examination of what others are doing. Even after you have done this, it would be a good idea to let your lawyer review your wording.

An employment relationship will last only when it is a true win-win relationship between the employer and the employee. The truth of today’s labor market is that, while almost everybody needs a job, nobody needs a job in your store. This is why you need to sell the benefits of working in your store to prospective employees.

The competition for good sales associates is fierce. It always has been, and it always will be. You’ll find it easy to attract average and below-average sales associates. But you will have to work hard if you want to get and then keep the good ones.

Long before you start interviewing, you will need to think through the list of benefits that you plan to offer prospective employees. Viewed as a whole, this list must be strong enough to get the sales associates that you choose excited about the possibility of working for you.

First think about the “hard” benefits you can offer, such as pay and insurance coverage. Although money may or may not be the most important item in your employee benefits package for any particular sales associate, it certainly is the most visible. You need to pay a competitive wage. You cannot expect to pay 10 percent less than the store down the street and keep good sales associates.

Money being equal, the medical and dental insurance coverage you offer could well be the deciding factor in winning or losing the battle for a good sales associate. Providing medical and dental insurance coverage is not cheap—in fact it costs a lot of money—but this can be an important way that you identify yourself as a “real” and fair employer.

People who work in other industries generally have medical and dental insurance coverage, and I believe that the people who work in the retail industry should, too. If you do not provide that kind of coverage, it is only fair that good employees—who offer both experience and productivity—move somewhere else to get the protection they need.

As an owner-operated retailer, you have many other benefits to offer prospective employees. The following list includes some of the “perks” you may want to present as the “soft” benefits of working for you.

One of the realities of retailing is that you will probably hire at least some students who do not intend to make your business their careers. Although these young people may be working primarily to earn tuition money—or to buy their first car—you have a lot to offer them besides money.

A job in a well-run retail store provides opportunities to take responsibility and demonstrate self-discipline. The understanding of customer service and the selling skills first learned in the retail business will be surprisingly useful in every job that person ever holds.

Staffing your business will be a classic “what comes first, the chicken or the egg” situation. You cannot get good people until you pay good wages, but you cannot pay good wages until you get good people making high sales. If you want to run a profitable retail business, you must break this cycle and take a stand.

By yourself, you could at best be one-half of a mom-and-pop business, the generally accepted smallest form of retail that can survive. As such, you would need to be in the store every hour that it is open—and deal with all of the other business-related matters as well as have some sort of a personal life after that.

Even while you are building your business in the early days, you should have the help of at least a few competent and capable sales associates. If you cannot pay them an hourly wage that is at least competitive and still make a profit, you might be better off getting out of the business gracefully. The writing is on the wall.

The retail industry uses three basic methods of paying store managers and sales associates: a weekly wage or “salary,” an hourly wage, and a straight percentage of sales or “commission.”

A store manager typically earns a weekly wage. You agree to pay so many dollars for so many hours of work. In most cases, the employee’s hours of work and earnings do not change from week to week. In other cases, store managers are paid a weekly salary plus a bonus at the end of each quarter or year based on sales results. This is the case for larger stores, where the store manager has broad management responsibilities, a sales goal to achieve, and a large staff to supervise and lead.

Part-time or full-time sales associates typically earn an hourly wage. You agree to pay so many dollars for each hour of work. In most jurisdictions, this would be up to 20 hours a week for a part-time sales associate and up to the maximum number of hours allowed (usually 40 hours) before you must pay overtime for a full-time sales associate. Employees’ hours of work and earnings may be set or they may change from week to week.

A full-time sales associate in a “selling” store—a store with a strong sales focus— typically earns a straight percentage of sales. You agree to pay a certain portion of every dollar that the employee rings through the cash register. Although minimum wage laws still apply—and overtime laws cap the employee’s hours of work—earnings are “open-ended” and totally dependent on sales. For some employees, this is a strong incentive to sell more effectively.

One of the advantages of paying straight commission is that you always know what your selling cost will be. For example, if you pay your sales associates 10 percent of their sales, your selling cost will always be 10 percent plus the cost of their benefits— typically 2 or 3 percent of their sales.

This system can work well for all concerned as long as your employees never earn less than the minimum hourly wage for your jurisdiction, usually calculated over a complete pay period.

Weighing against this is the fact that some perfectly good sales associates are truly afraid of working on commission. Although they could probably earn more money on commission, they prefer the stability and predictability of a set wage. There is nothing wrong with that as long as you enjoy a win-win employment relationship.

In an effort to get the best of both worlds, some stores “blend” the above methods and pay a weekly or hourly wage plus a commission. In addition to a weekly or hourly wage that at least satisfies minimum wage laws, you agree to pay a certain portion of every dollar that the employee rings through the cash register. Because you are “guaranteeing” part of the employee’s total earnings, this commission rate should be lower than the one you pay to straight-commission employees.

Under a “blend” pay system, the employee’s hours of work may be set or they may change from week to week, but earnings are always “open-ended.” For some employees, this is a strong incentive to sell more effectively.

As long as you stay within the labor laws in your jurisdiction, there is no right or wrong pay system to use in your business. The one that feels comfortable to you and lets you get—and keep—good sales associates is the one that you should use.

After you have thought through your job description for sales associates, developed a printed job application form, built a competitive benefits package, and decided on a pay system for your store, you will be ready to start interviewing prospective sales associates.

Interviewing is not something that comes naturally to most owner-operated retailers. If you have not done it before, you will first need to understand the process and then work hard at improving your skills. Here are some guidelines you should follow to avoid the most common mistakes that interviewers make:

The best way to conduct your hiring interviews is to give them structure and always follow a set routine. You should ask the same basic questions of every candidate and hold each discussion under approximately the same circumstances. This will let you be consistent and fair, and help you make meaningful comparisons between the candidates.

Evaluating candidates against the necessary characteristics and qualifications on the job description will help you make meaningful comparisons and the right decision. Ignore any superficial “first impressions” you get at the start of an interview and listen to all of the candidate’s answers before forming an opinion. Also ignore the “contrast effects” that will make any candidate who follows a good candidate look less attractive. And finally, stay away from your natural inclination to select someone who is similar to you. Each prospective sales associate will offer a unique set of strengths and weaknesses. Your challenge is to have a good understanding of these by the end the interview.

You should probably include at least some of the following standard questions in your interviews. As the candidates answer each question, you should follow up on one specific part of their answers and then move on to the next question on your list. The reason for asking everybody the same questions is that this gives you a good basis for comparing the three candidates you interview.

As soon as the candidate leaves, you need to spend some time making notes and thinking through the candidate’s strengths and weaknesses for the position of sales associate. This is the time when the duties, characteristics, and qualifications you spent so much time developing earlier will pay dividends by making your decision much easier.

For each duty in the job description, you need to decide if the candidate demonstrated an ability to handle that duty or not. This should be either yes or no, although you may prefer to use a five-point scale if you are interviewing experienced sales associates. In Appendix C, I’ve included a sample “Job Interview Evaluation Checklist” that you can adapt to your interview style and the items that are most important to you.

After you have interviewed all three candidates for the job, you need to review your summaries and interview notes from all three meetings, decide on one of the candidates, and then do some reference checks. If everything seems fine, you can proceed to offer the job to the most qualified person.

Eventually, you may hire an apparently nice person who is either a low performer or who lacks integrity. You cannot eliminate this, but you can at least reduce the odds of it happening by hiring properly and checking references thoroughly.

Many owner-operated retailers do not check references, but it is not a difficult thing to do. You just pick up the telephone, call the candidate’s last two or three employers, explain why you are calling, and ask if they will speak with you.

You certainly want to ask about the characteristics that I have identified as important: attitude, extroversion, ego, and empathy. You may also want to ask about things like friendliness, goal orientation, appearance, willingness to learn, punctuality, honesty, and selling ability.

Some employers are reluctant to talk about previous employees for various legal reasons. Most, however, will answer one standard question: “Would you rehire this person?” If the answer is yes, you can interpret that as a green light to go ahead and hire.