 |
Employee Retention Strategies Drive Revenue Growth at Sears
Author: Chris Young  | Posted: 09-03-2007 | Comments: 0 | Views: 92 | Rating: (81)  (?) 
 Employee satisfaction is essential to any effective employee retention strategy – any good HR manager knows that. However few managers think of the impact that employee satisfaction has on their customers and ultimately company profits. One can assume that happier, more productive employees will make more sales, treat customers better, and ultimately make more money for the company, but few companies have analyzed this assumption to the extent that Sears, Roebuck and Company has. Sears has put this common assumption to the numbers test and the results are intriguing to say the very least.
1992 was the worst year on record for Sears, losing almost 4 billion dollars on over 52 billion dollars in retail sales. The early and mid 1990s were truly trying times for the retail giant and tested the will and resolve of managers and employees alike. During this time the company was in near shambles, morale was low, revenues were suffering, and the bottom line was hemorrhaging red ink. This was in stark contrast to nearly a century of stellar results that Sears had comfortably enjoyed. For Sears, something needed to be done, and fast!
Sears began their turnaround by identifying three key objectives: Creating a compelling place to work, a compelling place to shop, and lastly creating a compelling place to invest. One of the tools used to establish these objectives was the employee-customer-profit chain. The employee-customer-profit chain is essentially a flow chart that diagrams revenue creation starting with employee attitudes and satisfaction, followed by its effect on customer satisfaction, and ultimately the effect on revenue and bottom line profit generation.
One thing Sears realized it needed to do was exert a greater effort focusing on the customer. This is often times easier said than done for many organizations. However Sears took an innovative approach to increasing customer focus. Based on the employee-customer-profit chain, it realized that it could not better focus on the customer without first focusing on its employees.
For Sears 70% of its workforce was part-time status and turnover among its part-time workforce had become alarmingly high. Sears suspected that low morale and poor employee attitudes towards the company were to blame. Sears began a rigorous process of measuring employee attitudes and satisfaction via a 70 question employee survey. The results of this survey were then juxtaposed to customer satisfaction surveys and ultimately compared to revenue and profit trends for the company. The correlations drawn from the data were greater than Sears could have ever imagined.
Undoubtedly Sears expected to see some positive correlation between employee and customer satisfaction and ultimately revenue and profit generation; however they were amazed to see just how great an impact employee satisfaction levels had on the bottom line. The data revealed that for each five point improvement on the employee attitude scale, there was a subsequent 1.3% improvement in customer satisfaction, and a 0.5% increase in revenue growth.
A 0.5% increase in revenue might sound miniscule, however when it is based on revenues of over 50 billion dollars it adds up quickly and significantly. For Sears this would equate to a 250 million dollar increase in revenues a year! This revenue increase does not require investments into advertising, new facilities, or improved operations, only an investment into the satisfaction and happiness of employees.
There are also cost savings that can be attributed to improved levels of employee satisfaction. It should come as no surprise that happy employees stay in their jobs longer than unhappy employees. By focusing on increasing employee satisfaction Sears was able to concurrently increase revenues and reduce the costs associated with employee turnover. Sears was also able to determine that employees with greater levels of satisfaction and a favorable attitude towards the company were more likely to speak positively about the company and recommend shopping there to friends and family members. By increasing employee satisfaction Sears was able to generate free word of mouth advertising spread by its employees, thus in a way reducing the reliance on paid advertising to generate revenue. Sears realized the importance of its employees and their levels of satisfaction and made it a corporate goal to increase levels of employee satisfaction throughout the company.
Sears feels that employee satisfaction levels are so important to the company’s health and vitality that it treats attitude and satisfaction numbers the same as “hard” financial numbers. Sears is so committed to these numbers that it has them audited by an accounting team to ensure validity and reliability just as it does with all of its internal financial measures.
For Sears its turnaround did not take place overnight. It took several years of hard work and dedication from managers and employees at all levels. Improving levels of employee satisfaction was not the sole contributing factor to Sears’ remarkable turnaround. However it is fair to assume that without the focus on the employee as a base to better focus on the customer the turnaround at Sears would not have been as quick or amazing as it was.
As business leaders we should all pay careful attention to the approach that Sears took to improving its bottom line. The urge to drastically cut costs through outsourcing, layoffs, reducing benefits, and streamlining operations might well be overly complex solutions to a relatively simple problem. In lieu of cost cutting initiatives to preserve profit margins, a customer focused approach might be a better solution. As we can learn from Sears focusing on the customer ultimately begins by focusing on the employees who serve the customer. Give it a shot, your employees, your customers, and ultimately your shareholders will thank you for it!
At The Rainmaker Group we are committed to helping your organization maximize possibility through its most valuable assets – its people. We have the tools and techniques to help you improve levels of employee satisfaction. From selecting and retaining great employees, to coaching existing employees to realize their full potential we have what it takes to create a work culture that employees enjoy and appreciate. Your employees and customers will thank you. Give us a shout today!
1-866-988-7246
Rate this Article:
Current: 0 / 5 stars - 0 vote(s).
Article Source: http://www.articlesbase.com/human-resources-articles/employee-retention-strategies-drive-revenue-growth-at-sears-115115.html
About the Author:Chris Young is founder of The Rainmaker Group of Bismarck,ND. Young and his team specialize in selection and development of human talent within organizations. They are especially focused on efforts to reduce employee turnover within organizations to help drive revenue and profit growth. Check them out online or give them a shout today!
1-866-988-7246
info@therainmakergroupinc.com
Employee Selection and Retention Strategies
|
Submitting articles has become one of the most popular means of generating quality backlinks and targeted traffic to your website. Join us today - It's Free! |
|
Related Articles
Stop the Revolving Door of Employee Turnover
By: Robert Cameron | 28/12/2005 | Management
Stop the revolving door of employee turnover: Employee assessment tools have advanced so companies can now more effectively identify, select, and retain top performing employees.
Employers Keep Screening Out Great Sales Candidates
By: Robert Cameron | 28/02/2006 | Sales
Companies hiring sales reps stick to the same old hiring practices, and hire low performers that turn over, while screening out some of the best candidates. Robert Cameron examines two hiring myths and shows you how to easily select sales people who can s
Why Leaders Grow Employee Engagement Cultures...and How!
By: Timothy Wright | 11/01/2008 | Leadership
A quick-fix from some new management fad does not ensure employee engagement.
True employee engagement comes from the organization's culture. Culture stimulates employees to invest and involve in the work they do, how they do it, and why they do it for this company.
Transform Your Organization With Facilitative Leadership
By: Glenn Brome | 14/06/2006 | Leadership
Effective leadership is a critical factor in the success of every organization. Learn the skills necessary for facilitative leadership to transform your organization and the bottom line.
All This Talk About Employee Engagement: What is It, Anyway?
By: Timothy Wright | 11/01/2008 | Management
In my Manager’s Views of Employee Engagement survey, a substantial number of respondents requested definition of employee engagement. Below, I cite several definitions and explanations from websites, blogs, and corporate communications.
Employee Retention: What Employee Turnover Really Costs Your Company
By: Ross Blake | 22/07/2006 | Affiliate Programs
It's one of the largest costs in all different types of organizations, yet it's also one of the most unknown costs. It's employee turnover.
Employees Don't Come With Instruction Manuals
By: Robert Cameron | 10/09/2006 | Coaching
Employees are often difficult to understand and manage, even the good ones. Managers need to have better information about their employees persoanlity and behavioral makeup.
Why Employees Leave
By: Ross Blake | 24/09/2006 | Affiliate Programs
One of the questions we're frequently asked by employers of all types, including those in different countries, is "Why do employees leave?"
Here are 10 of the most common reasons employees leave; we haven't ranked them in their order of importance with
Latest Human Resources Articles
Outsourcing Payroll Brings Peace of Mind
By: 10x Marketing | 25/07/2008
Is your business growing? Consider the time you could save by outsourcing payroll management…
Performance Technologies Schedules Second Quarter 2008 Earnings Release and Conf
By: atomxiao | 25/07/2008
A conference call will be held on Friday, July 25 at 10:00 a.m., New York time, to discuss the results. All institutional investors can participate in the conference by dialing (866) 250-5144 or (416) 849-6163. The call will be available simultaneously for all other investors at (866) 494-3387 or (416) 915-1198. A digital recording of this conference call may be accessed immediately after its completion from July 25 through July 29, 2008. To access the recording, participants should dial (866) 2
Develop Skills to Beat Recession
By: Gary Howes | 24/07/2008
Business leaders offer start-ups advice on how to ride through the slowdown.
Preparing for Disclosures Under New Form 990 - are You Ready?
By: Paul R. Dorf, Ph.D., APD | 24/07/2008
Many not-for-profit organizations will be utilizing the new Form 990 for filing tax information this year. The recent issuance of these "final" regulations on financial reporting for tax-exempt organizations is a long-awaited reaction to misfilings that have occurred over the years, whether intentional or not. Reporting under the new Form 990 is an outcome to actions caused by the Sarbanes-Oxley Act and the Securities and Exchange Commission relative to good governance and disclosure of execut
Workers Compensation Insurance as Employee Benefit
By: PeterSam | 24/07/2008
Employers have a legal and a moral responsibility to provide their employees safety at their workplaces. But despite the best of safety measures in place, accidents cannot be totally eliminated and they can, at best, be minimized. It is the responsibility of an employer to maintain a safe workplace, have workers compensation insurance covering his employees and protect the workers from financial hardship in the event of a workplace injury. Workers compensation insurance covers workers injured no
Building Your Credit From No Credit or Bad Credit
By: Shyr Miles | 23/07/2008
For those who want to open a business but is apprehensive about their credit scores should not dismay. Fortunately, there are ways to break into building your credit score, even if you have no history or bad credit history. The secret is to start small and stay responsible.
Lyons & Wolivar, Inc. (l&w Investigations) Offers Tips on Workers Comp Claim Abuse
By: Steve Dubin | 22/07/2008
Lyons & Wolivar Inc. (L&W Investigations), the foremost private investigations firm specializing in insurance claims, offers tips or red flags on how to spot possible abuses of a workers comp claim.
Utilise Space With Office Plants
By: PaulZ | 22/07/2008
Specialist office plant suppliers will be able to help you make use of any awkward spaces by utilising planted office displays
More from Chris Young
Would you Hire Fred Again?
By: Chris Young | 13/08/2007 | Human Resources
Ever hired a "Fred"? An employee who turned out to be a hiring mistake and just wasn't right for the job and your organization? Chances are you have - almost all hiring managers have.
The following article discusses how to handle "Fred" situations and prevent hiring mistakes from happening again in your organzation
Exit Interviews - It's not You, It's Me
By: Chris Young | 13/06/2007 | Human Resources
Many organizations rely on data retrieved from exit interviews to improve their employee retention programs. Unfortunately much of this information is highly suspect at best.
The problem is that many employees leaving an organization do not feel comfortable revealing the true reasons for their departure.
The End result is an exit interview where the employee takes the high road aand tells his or her employer: "It's not you, it's me"
Can our Recruiter Really Do That?
By: Chris Young | 15/05/2007 | Human Resources
In hopes of identifying more qualified job candidates, many organizations are turning to recruiters and employments agencies to assist in finding these candidats. However, many organizations are unaware that their recruiter might also be assisting their competition to find candidates for the same or similar positions. This creates an obvious dilemma, however there are actions that organizations can take to ensure they find and hire great employees
The Real Costs of Employee Turnover
By: Chris Young | 06/02/2007 | Human Resources
An examination of the costs associated with high employee turnover and poor retention including some costs that may not be so obvious such as decreased morale and reduced productived. Also what can be done about this alarming trend.
Employee Selection - are you Gambling at Work???
By: Chris Young | 31/01/2007 | Online Gambling
An examination of the growing use of personality assessments as a key part of the employee selection and hiring process. These tools can dramatically increase the chance of a successful job hire while offering invaluable insights into what motivates employees as well as how to communicate more effectively and improve retention
|
|
Business 
