Two: turnover-what’s sales/design training got to do with it?
Retail Ideas column
Leslie Carothers -- Furniture Today, March 12, 2007
Turnover. The biggest controllable, but often not quantified, cost in the furniture business. How can you determine how much money you are losing due to turnover? Assign a dollar value to the following variables:
1. Cost of ads for hiring purposes.
2. Dollar value of time all employees (owner, manager, other associates are spending on interviewing, reference checking, etc.
3. Mgmt. time/employee time per hour for operational training.
4. Mgmt. time/employee time per hour for product knowledge training.
5. If you expect your sales consultants to spend part of their time training new hires, calculate the cost of their missed sales opportunities.
6. Cost of business cards, computer hook ups, etc. for new employees. Don’t forget to also calculate the cost per hour of mgmt. time involved in setting these items up for new employees.
7. Lost sales opportunities since new employees often lose new customers since they cannot usually remember everything they’ve learned in training before being put on the sales floor and have limited knowledge of special order merchandise available compared to a more experienced sales consultant.
8. Lost productivity per hour of mgmt. who cannot focus on strategic initiatives due to constantly having to go back and re-hire.
9. Last, but not least, cost of paying three months draw against commission and then not having the employee work out.
As you can see, turnover is a tremendously high expense for most retailers these days. Now, go back and see how many employees turned over in 2005/2006 and multiply that number by the dollar value of an employee that leaves.
Now, why are these employees leaving? They are leaving (when it’s not for family reasons, bad working conditions or weekend issues) because:
They cannot make enough money fast enough to make a living. Why? They don’t have excellent product knowledge yet. Therefore, they are dependent on their SALES AND DESIGN skills to help them make it through the first six months.
Now, go back and look at your turnover costs. Compare them to the cost of a top notch sales/design training program. Does this investment in your people make sense to you now?
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