Jobs

Retail hiring goes high tech as holiday season nears 

Oct. 3, 2013 at 5:05 AM ET

Job seekers fill out applications the old fashioned way as they wait in line to enter a job fair at a new Target retail store in August 2013 in San Francisco, Calif.
Justin Sullivan / Getty Images
Job seekers fill out applications the old fashioned way as they wait in line to enter a job fair at a new Target retail store in August 2013 in San Francisco, Calif.

As retailers gear up to hire hundreds of thousands of seasonal workers for the holidays, job seekers are likely to notice the application process has gone more high tech. 

In-store kiosks may electronically blackball some candidates. They may also send a text message to managers about other job hopefuls who might be worth hiring on the spot to start training. 

"It literally can all happen within one hour," said Adam Miller, CEO and co-founder of Cornerstone OnDemand, a talent consultancy with clients such as Neiman Marcus, Walgreens and The Container Store. 

Good hires are especially important to the retail industry, where the turnover rate is about 57 percent, with most of that coming within the first 90 days, said Craig Rowley, vice president and global leader of the retail practice for the Hay Group. That can add up fast, since the cost of hiring a new hourly worker is about $600 to $1,000 if you factor in the cost to advertise the job and the time to conduct interviews and do basic training, Rowley said.

"The objective is to get people who fit," said Rowley. For small retailers, the ability to work flexible hours may be a primary need, while others may craft behavior and capabilities questions to gauge honesty and other values. 

One of the biggest staffing problems in retail, he said, is people who just fail to show up for a shift. How do you guess that in advance? "You can ask questions around it," Rowley said. "How important is it for you to be on time?"  

It's still unclear if these tests are worth the money companies are spending on them, but at least one study of personality tests used in hiring found the employees learned to manipulate their results with ease.   

"I think the consensus from the research is that faking does happen, but it doesn't really change the predictive role of the test. … They learn to be who they need to be to fit that job," said John Hausknecht, an assistant professor of human resource studies who focuses on the study of hiring and retention at Cornell University's ILR School.  

"Job candidates who fail a personality test the first time often change their responses dramatically on the second test — even though adult personality is known to be generally stable and unlikely to change in the short interval (in this study, one year) between tests," Hausknecht wrote in his 2010 report

The research does support testing for one skill, though: conscientiousness. If you pay attention to details on the test, you're likely to do the same in your job, Hausknecht said. 

Software for the hiring and retention of employees ranges from off-the-shelf options to customized systems that even allow virtual tryouts of jobs using video simulations, he said. 

The technology also has improved training for new employees, which is key to slowing turnover, said Cornerstone OnDemand's Miller. Most people who leave within the first 90 days quit because they don't like their job, and one big reason they don't like their job is that they didn't have the proper training to do their job. 

"What you find in exit interviews is, it's almost never about money," Miller said. Reasons for quitting are usually people who said they weren't learning anything, did not have flexibility in hours, didn't feel empowered to do their job well, or didn't communicate well. 

While turnover has been historically high in retail, not all companies think of it as a major problem, said Ellen Davis, a senior vice president of the National Retail Federation. 

"Retailers realize that when you have thousands of people in entry level jobs, it's going to be a natural occurrence," Davis said. For some, it's enough to hire for a good personality and great customer service skills, even if that person is only on the job for three months. 

"Retailers are very used to turnover in our business. That's the nature of the business," she said. "You're not going to say: 'I'm not going to hire a great high school student.' … Half of all working teenagers work in retail." 

The slow improvement in the economy is also increasing retailer turnover. While Rowley at the Hay Group said retail turnover stands at 57 percent, that's up from 50 percent two years ago. Davis said private data her group collects also indicate a rise in turnover at retail cashier positions during the past three years. "However, it's still not back to pre-recession levels," she said. 

The recession, unemployment and underemployment have given retailers a big pool to choose from, said John Challenger, the CEO of Challenger, Gray & Christmas, Inc. 

"Retailers have had the ability to really sort through and find the people who will stay and do the job well," he said. "It's a big data problem. They're using technology to target the right people."


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