Madison Reed has raised $32.1 million since launching 15 months ago.
Automation helps in hiring and retaining employees, one of thebiggest challenges that the retail industry faces.
Robb Simons admits that at first he was skeptical. Five years ago, Unicru Inc. came to him with a plan that was going to streamline hiring in G.I. Joe’s Inc. stores and Simons, director of human resources for the 22-store chain, wasn’t buying it. “I asked, ‘What is this? Are they gong to make my life more difficult?’” he recounts. “The entire time I interviewed them and looked at what they had, I was playing devil’s advocate.”
What he was looking at was an electronic, kiosk-based system of accepting applications and screening applicants. Store managers would use the kiosks to input information from prospective employees. The system formatted and processed the information. Even that basic move into electronic applicant processing was such a big improvement over the paper-based system that GI Joe’s had been using that Simons quickly became an advocate of the process.
A major challenge
Today, with the system operating over the Internet to accept information, process it, short circuit unqualified applicants and feed applications to the store manager’s desktop, Simons says his enthusiasm hasn’t flagged since he became a convert.
Hiring and retaining employees is one of the biggest challenges that the retail industry faces. Portland., Ore.-based GI Joe’s 168% annual employee turnover five years ago was not-and still is not-uncommon in retailing. Thus retailers are enthusiastic for any system that can help them speed up the hiring process and hire better employees to start with.
GI Joe’s has reduced employee turnover by more than half in the past five years to 80%. Hand-in-hand with decreased turnover is increased longevity. The average employee now has 52 months of tenure vs. 36 months five years ago. “It’s not all due to the Unicru system, the economy definitely had a role, but we have noticed a better quality of employee working for us,” Simons says. “Part of it is that we found a better fit between what we wanted and our employees. We were able to identify employees who had the right combination of customer service attitude and willingness to work retail hours.”
Furthermore, hiring is a paper-intensive process and a web-based process can reduce paper. GI Joe’s generates 350 applications a week. “Imagine that in paper,” Simons says. Until the company installed the Unicru system, GI Joe’s managers-as most retail managers-reviewed all applications manually.
Prospective employees are directed to a web-enabled kiosk where they enter their pertinent information. Applicants also receive assessment tests related to customer service, dependability and honesty and management potential. Applicants who don’t pass the dependability/honesty portion are not offered the option of going any further. The screen flashes a message thanking them for applying and they are sent on their way.
The rest of the applicants are screened further and rated red, yellow or green, based on the retailer’s criteria. About a third of applicants get the green treatment. “Rather than reviewing 100 applications and having to discard those that don’t fit, the store manager starts by looking at 30,” Simons says. “That saves a lot of time.”
The process further flags any areas that need more explanation, so the manager can start the interview paying attention to the most critical elements of an application, such as a gap in employment history.
Job seekers can also apply online-about half of GI Joe’s applicants do so-and that has helped fill managerial ranks, Simons says. “We get applications from across the country and that especially helps in filling general manager (GI Joe’s title for store managers) and district manager positions,” he says. Unicru reports that chains with small stores, such as Blockbuster Inc. and Hollywood Entertainment Corp.’s Hollywood Video, rather than install a kiosk direct applicants to apply online.
In addition to better hiring, the web-based system has also reduced costs. “The average human resources department has one h.r. staffer for every 100 employees; we have three h.r. staff for 1,300 employees,” Simons says. Those three are a trainer, a health and benefits administrator and Simons, manager of the department and h.r. generalist.
Furthermore, the automated system identifies employees whose hiring qualifies the employer for special tax breaks and prompts managers to file the appropriate papers. Simons says that aspect in itself saves GI Joe’s five figures a year in tax costs.
The system also makes applicants easily available to other stores. If the store manager has not pulled the application from the web site within a certain number of days, the application enters the prospective employee pool for all stores within a 50-mile radius of the applicant store, Simons says. “It provides all the stores with highly qualified potential hires,” he says.
What ties everything together, Simons says, is the web. Such functionality could be delivered via a private, store-maintained network, he says, but the web simplifies everything. For one thing, there are no network maintenance expenses as there would be with a private network. And the web enables the process to be administered outside the company, which not only saves money but also allows a level of objectivity in screening applicants, he says. “The concern about someone at the store not hiring an applicant because they didn’t look right is gone,” he says. “You can’t tell if they’re tall or short, fat or thin.”
While it won’t reveal details, Unicru says the cost of installing kiosks in retail locations costs several hundred dollars a month per store, depending on the number of programs that the kiosk runs.
Unicru numbers Albertson’s Inc., The Kroger Co., Kroger’s subsidiary Fred Meyer, Blockbuster Inc., CVS Corp., Duane Reade Inc., The Finish Line Inc. and others among its customers.
Building on its success with store-based hiring applications, the company is now expanding into headquarters hiring. “Corporate hiring is a separate process,” says Chris Reed, chief marketing officer of Unicru. In addition, it’s a different process, he says. “Professionals have resumes and backgrounds that store-level employees don’t have,” he says. “Hiring professionals is a much more sophisticated process. The underlying processes support recruiter-centric hiring.” He says Albertson’s and Circuit City Stores Inc. are using the corporate hiring technology.