For many retailers, recruiting and retaining skilled employees is tough. According to a joint survey from CareerBuilder and WorkInRetail.com, 36 percent of retail hiring managers said retaining top talent is one of the most challenging parts of their job, and 29 percent said that recruiting skilled talent is a top challenge.1 Some retailers turn to volume recruiting to try to solve the problem, but the result is only high turnover.
One real solution: Implement training programs that "upskill" current workers.2 American retailers such as The Gap are looking in this direction, partnering with the White House to offer a year-long management-training program to develop employees with management potential.3 Wal-Mart is another company investing in employee training programs, as they are currently piloting a new manager training program at select stores and plan to roll them out to all U.S. locations by the end of 20164. Implementing a flexible online management training program is the most efficient way for retailers to ensure an ongoing abundance of in-house, management-level talent.
Reduce Recruitment Time and Cost
One compelling reason to develop an in-house management training program over recruitment is that it keeps costs down. The direct cost of hiring a new employee can total over half their annual salary and sometimes as much as double their yearly wages, according to the Society for Human Resource Management.5 This includes costs such as accrued vacation and sick pay, exit interviews, temporary coverage, and hiring and onboarding the new employee. Add to this the costs of training the new employee and the lost productivity while the new hire is getting up to speed.
In contrast, a training program for a current employee may cost as little as a few weeks' pay, averaging $1,208 per employee per year, according to the Association for Talent Development's 2014 State of the Industry report.6 The Container Store is one company that has taken this to heart. By investing in robust training for first year employees, the company has been able to reduce employee turnover to 1/10th of the industry average.7
Shorten Training Time
The Association for Talent Development also found that the average training program for a new employee took 31.5 hours of learning time. This highlights another advantage of upskilling internally instead of training new hires: You'll lower this number dramatically. A new recruit needs to learn everything your current employees already know about your company policies and procedures before they'll be ready for advanced management training. But current employees with potential can start management training immediately, pick it up faster and remain productive while doing it.
Build Team Morale
An internal management training program also helps build the morale of your workforce. For starters, your employees already know their new manager-in-training, eliminating the anxiety and mistrust that may come from hiring outside managers. Additionally, when current managers help train emerging managers, it creates natural mentoring relationships. Assigning each employee a mentor can create a culture within your company where it's instinctive for employees to teach each other new skills, maximizing the potential for management talent to emerge from high-potential employees.
Make Training Self-Sustaining
Building a management training program into your corporate culture helps ensure that your management talent pool continually self-replicates and replenishes itself. As training progresses, you can observe, systematize and test your training process, identifying which training methods work best and which ones need to be discarded or adjusted.
With your training methods optimized, as you identify emerging talent, you can systematically maximize the potential of each employee. In this way, your training program can sustain a perpetual supply of talented potential managers, trained in-house and ready to step in and step up as needed.
Offer a path to a high school diploma
Employers and managers in the retail industry may wish to offer a High School Completion program as part of a formal manager training program. Many times, employees can't advance into management roles because they lack a high school diploma, but by partnering with a completion program, they can earn the credential and qualify to move up with the company. Additionally, a high school completion program can be a useful tool for retailers to attract and retain top performing employees, in turn lowering turnover and hiring costs.
Recommended for You: The Cost of Hiring the Perfect Candidate vs. Training an Existing Employee
Resources: (1) Employer's Top 10 Staffing Challenges by Industry (2) Retail Should Invest in Upskilling to Close Employee Skills Gaps (3) Wal-Mart Tests 'Upskilling' (4) Gap Inc. Expanding Commitment to Career Advancement and Skills Training (5) Cost of Keeping Employees Vs. Hiring New Employees (6) 2014 State of the Industry Report: Spending on Employee Training Remains a Priority (7) Kip Tindell: How He Created An Employee-First Culture At The Container Store