The Changing World of Human Resources

NACS virtual HR Forum session discusses the biggest takeaways from the just-released NACS Compensation Report.

March 10, 2021

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By Sara Counihan

ALEXANDRIA, Va.—The employment landscape changed dramatically in 2020, and COVID-19 impacted businesses in unprecedented ways, including human resources and labor, according to Jayme Gough, research manager for NACS, who presented during the virtual NACS Human Resources Forum that kicked off yesterday.

Gough shared that new questions regarding the mitigation of COVID-19 are included in the newly-released NACS State of the Industry Compensation Report of 2020 Data, available now for purchase. According to the report, convenience retail companies spent an average of $45,006 on pandemic-related safety protocols and training, or about $482 per store. Additionally, companies that participating in the survey spent $259,583 on personal protective equipment, plexiglass shields, cleaning products and supplies, averaging to $1,571 per store. If you projected the average company’s per-store reported spend across our industry of over 150,000 retail locations, the industry would have spent approximately $308,494,307 to mitigate the spread of COVID-19 in 2020.

Employee turnover continues to have a huge impact on the convenience store industry. In 2020, turnover rates remained in the triple digits at 123% for store associates, according to the NACS Compensation Report. The average turnover rate for full-time hourly store associates was 91.8% and part-time hourly store associates was 153.9%. The turnover rate for managers dipped slightly to 20% in 2020 from 22% in 2019.

The costs associated with employee turnover is substantial, and the costs aren’t always tangible. A Work Institute study broke out the cost to replacement an employee into hard and soft costs. Hard costs take up 33% of the total cost, while soft costs are 67%.

Hard costs to hire include background checks, reference checks and drug testing. According to data from the NACS Compensation Report, the cost to hire a manager is $3,396, and it’s $1,341 for a full-time hourly sales associate. The cost to train a manager is $3,507, and a full-time hourly sales associate is $1,082. Soft costs include time, as  store managers go through 2.9 interviews before they’re hired, and full-time hourly sales associates complete 2.0 interviews. Other soft costs could include the number of days until an employee reaches full productivity—it takes a store manager 78 days to reach full productivity and a store hourly employee 17 days.

“Adding all of these soft costs together, though we may not have an actual number on them, there’s a lot of costs associated,” said Gough.

So how do c-stores prevent turnover? It’s important to understand why employees are not happy enough to stay in their positions.  Gough pointed to a 2018 study Work Institute, which found that the No. 1 reason people quit their job is because they did not feel their position gave them enough career development.

“One thing is to look to your recruiting and hiring process. Try to make the right decision first,” advised Gough.

She also specified four segments that can be helpful in the hiring process.

  1. Set clear expectations: The primary way to do this is through job descriptions, said Gough.
  2. Hire for the person: Gough suggested to hire for culture first and skills second. Data from the NACS  Compensation Report shows that the store manager turnover rate was 92% in 2020, and there was a 40% termination rate and a 59% resignation rate. Among the companies that implemented reference tests, personality tests, values tests and situational judgement tests, they had a 70% turnover rate, 21% termination rate and 17% resignation rate. “If you conduct these values tests, there’s to support that that’s going to lead to longevity in your hiring,” said Gough
  3. Put your best foot forward: More time during the interview process showed higher rates of acceptance and lower turnover between positions.
  4. Lead by example: Per the graphic below, Gough encouraged employers to provide an extraordinary employee experience, including the following ways:

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Gough also stressed the importance of engaging and retaining employees, noting that disengaged employees cost U.S. organizations around $500 billion a year. “Disengaged employees do not provide anything for you,” she said, adding, that convenience retailers “have a great opportunity to engage employees when they’re least engaged—to reenergize them when they think maybe they’re feedback is not being listened to or maybe they’re not being trained enough. We need to find ways to intervene at these points where they are at their most disengaged.”

Finally, Gough outlined the baseline benefits that c-stores can consider offering  to remain competitive.

The average hourly wage for a store associate was $11.89, which is up 40.5% in the past 10 years. Gough shared that convenience stores are competing inside and outside of the industry in terms of wages. “Our employees have lots of options to where they can go, so we need to stay competitive,” she said.

The main competitor for the c-store industry in 2020 was unemployment. Workers in half of U.S. states received higher unemployment pay than their normal salaries. So, to stay competitive, employers must offer baseline benefits. “If you’re not offering some of these baseline benefits, you’re not able to compete across the industry,” Gough said.

According to data from the NACS Compensation Report:

  • 92% of companies offered medical coverage to store hourly employees
  • 84% offered dental coverage
  • 83% offered prescription coverage
  • 84% offered retirement
  • 77% offered life insurance
  • 76% offered vision

“When it comes to baseline medical benefits, we’ve had the highest number of companies offering these benefits in the history of compensation report,” said Gough.

The NACS Human Resources Forum is a virtual experience that continues through March 11. Stay tuned to NACS Daily this week for event coverage, including highlights from industry experts and convenience retail HR professionals on topics such as virtual recruiting, mental health and total rewards.

Sara Counihan is the NACS content project manager. She can be reached at scounihan@convenience.org.

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