Originally published on Fistful of Talent.
Hourly hiring is the toughest it’s been in a decade! On any single day, there are millions of hourly jobs available in the U.S. In 2016, hourly job growth in the food and beverage industry outpaced broader economic job growth by 4X! There are so many hourly jobs available right now, the only reason not to have a job, at this point, is you flat don’t want to work!
A Cornell study recently found that the cost of turnover for one hourly position was $5,864. Lost productivity for each open position you have: $3,049. Total annual turnover cost per hospitality location: $146,000! Per location!
So, I know my true HR and TA pros in the industry will say, “Tim, it does NOT cost us $5,864 to replace an hourly worker!” I hear you. I lived that life. I know what you’re saying. The real cost of hire for an hourly retail/hospitality position in non-soft-HR dollars is probably more like $750 per position.
These studies, though, are smart. They dig into the costs that we don’t in HR. The cost of training. The cost of having an open position on sales and profit, from lower productivity, increased OT, etc. It doesn’t take long and those costs jump up quickly to $5,000 per backfill! Executives don’t like to talk these big numbers because their reality is these numbers are already built into operational expenses.
But, this is how TA and HR can look like rock stars when it comes to hourly hiring and retention. The real gross profit, net income number impact we have is going to be hiring a higher quality of candidate that will stay longer, produce more, and not keep us on a hiring treadmill of continuing to replace bodies. 29% of hourly restaurant workers stay in the job six months or less. That’s a huge drag on the profit of a location.
So, what can you do to have better hourly hiring?
- Start picking from a pool of higher quality hourly applicants. To do that you probably need some technology help. We constantly have people coming to us with interest, but in many cases, we don’t have the opening that’s right for them. So, they go away. Get hired by our competitors, etc. You need technology to keep yourself engaged with those pools of talent, so you can proactively tap them on the shoulder when you need them!
You have to invest in, and religiously use, assessments specifically designed for hourly hiring. Data clearly shows these have a huge impact in tenure, productivity, guest satisfaction, gross profit, etc.
Stop hiring warm bodies. This is such a reality for so many of your locations, and you need to help them get out of this cycle. This starts with hiring people who truly are fans of your brand. Many of your best employees are your best customers, or your best customers’ kids and grandkids. Find ways to tap into these pools by location.
Get your local managers and leaders involved in community organizations. The time they invest into these organizations will come back to them a hundredfold. Hourly hiring is about tapping into local talent pools. Community organizations are mostly untapped sources of some really great hourly talent, but unless you get involved you won’t be able to take advantage!
Every single day I have conversations with real TA and HR leaders who are all struggling to find and retain great hourly talent. Those conversations are all a variation of this –
“Tim, all I want is to find people who will show up each day they’re scheduled, come with some sense of customer service, act like they enjoy being alive, and able to work well with others!”
I kid you not! This is an exact conversation! It’s a tough gig out there right now hiring hourly workers. Check out the SmashUps Video Cast next week when I’ll dig in deep to how organizations can get better at hiring hourly workers!