Produce Departments Grow Ripe for Recruitment

The most serious shrinkage

problem in the supermarket produce department doesn't involve fruits or vegetables?it's happening in the ranks of employees.

It comes as no surprise to anyone even remotely connected with the industry that produce employees are hard to hang onto and even harder to replace. Turnover rates in the section have been measured from a low of 4.6 percent for full-time management employees in chains with annual sales between $300 million and $1.5 billion to a high of 47.3 percent among part-time, store-level workers at companies with sales over $1.5 billion. A turnover rate of 47 percent, or anything that even remotely approaches that figure, can be devastating, forcing managers to spend much of their time recruiting and training replacement workers.

FreshTrack 1998, a study recently released by the Produce Marketing Association (Newark, Del.) documents many of the personnel challenges faced by the various segments of the produce industry and seeks to establish the reasons for them. In the words of its authors, "the focus of the report is people: trends, opportunities and creative solutions to the pervasive human resource and training challenges faced by all organizations."

"Overall, we found a couple of things that are interesting. In the first case, and this was not entirely unexpected, the management-level employee has access to an enormously larger number of resources, in terms of training and fringe benefits, than does the non-management ranks," says Edward McLaughlin, professor of food marketing and director of the food industry management program at Cornell University (Ithaca, N.Y.), who was in charge of conducting the study.

"On the one hand, that's perhaps logical, but on the other hand what that often does is restrict the substantial potential that may exist in the non-management ranks for longer term retention and for promotion into higher levels of management."

Among firms of all sizes the turnover rates for management employees, both full- and part-time were drastically lower than those for full- and part-time produce department employees in the stores. This seems to bear out the report's findings that managers have more access to training resources and advancement potential, thus giving them more job satisfaction.

But while retention is certainly a significant problem, retailers report having even more trouble recruiting workers to fill the vacant positions.

"A second interesting finding is that retailers told us that recruiting new employees into the produce department was difficult, but they were much less pessimistic about retention of employees, so the implication being that once people get in the industry, they find it more appealing than they thought from the outside," McLaughlin says. "One of the challenging questions is, if it's easier to retain than recruit, what can we do to get the message across to?especially young people?that this is an attractive, appealing industry?"

Earlier this year at the 1998 Annual Produce Conference, a workshop session moderated by Harold Lloyd that focused on "developing your work force," came up with seven ideas that retailers could use for effectively recruiting workers:

1) Develop a referral program that gives existing employees financial incentives for having referred a successfully hired applicant.

2) Promote from within. Develop a program that targets employees for advancement and then provides regular training so their skills are always being improved.

3) Have company meetings in school/community meeting rooms. This allows the community to view your company as an organization that provides employment as well as groceries.

4) Post open jobs in-house so your employees feel your company offers them opportunities beyond their current positions.

5) Have a career day off-site. Work with local high schools, colleges and trade schools.

6) To make sure you're hiring the right people, consider using personality tests to build a well balanced team.

7) Use all opportunities to network?conferences, workshops and meetings. Use headhunters, interns and career days to obtain new recruits.

These ideas may seem a bit general, but that's an important characteristic of their practicality: They could apply to any department in the store. As a matter of fact, much of the information and many of the suggestions in FreshTrack 1998 can be applied to most of the fresh food sections. Employee recruiting, training and retention, as well as advancement, are critical problems throughout all of the perimeter sections. If you take these seven ideas and apply any one of them, chances are you'd be recruiting for the store in general and not just for the produce department.



Once an employee has been hired, it is the company's responsibility to train that employee. Training is essential from two points of view. First, workers have to be able to perform their job functions, so at a minimum they must be given the information and skills necessary to perform at acceptable levels. Second, employees function best and excel when their training covers how their jobs and departments fit into the scheme of things and provides skills that will allow them to eventually advance. It is this ongoing training that appears, at least qualitatively, to lead to better employee retention.

FreshTrack 1998 shows that retailers excel in offering at least the minimal training. The study found that almost 92 percent of managers and 89 percent of non-managers received technical skills training.

However, when it came to skills training that would lead to advancement, the vast majority of instruction went to managerial employees. For example, 81 percent of managers received leadership skills training compared to only 27 percent of non-managerial produce employees. Further, almost 84 percent of managerial associates versus only 32 percent of non-managerial associates received any managerial training. To make matters worse, only 27 percent of non-managerial employees took any computer skills training, compared to 81 percent of the managers.

Certainly, managers have more acute needs for all these skills, but non-managerial employees will feel they have more opportunities if they are given more exposure to such training.

Says McLaughlin, "Retailers are fairly aggressive in providing technical training to both management and non-management employees. But in terms of other training?leadership and management training?a very small percentage actually provide it. There are exceptions, but in general young, entry-level employees into the produce department don't get a company-wide orientation. I don't mean that they aren't oriented to the company policy; that does take place in nearly all cases. What they don't often get is a true understanding of what are likely to be the career opportunities and challenges there may well be in the retail produce industry.

"They are treated often as cannon fodder. There's such an immediate and critical need to get the labor done at store level that often these young people don't have an adequate opportunity to see that there are challenges and career satisfaction to be had in the produce area. In particular, there are headquarters positions that lead to very exciting and substantial careers, but when your head is deep in the lettuce sink you have little chance to get that orientation.

"I think that there's substantial talent there that's untapped. I think that an awful lot of young people see the produce department as a dead end and as unexciting and monotonous. I think that it's possible to allow the young people to see how exciting the career might be. There are different motivational techniques required for the generation of employees entering the work force today?creativity and innovativeness are called for. Young people increasingly simply refuse to accept monotonous, boring jobs."

If you've done everything correctly, then you've managed to hire and train a group of new produce employees. The third ingredient in the staffing mix is whether your company can hold onto them. We've seen how high the turnover rate can be among produce employees, especially non-managerial workers. FreshTrack 1998 actually reports the turnover statistics as a bad news/good news situation. The bad news is that the turnover is high, the good news is that it is considerably lower than it is for some other departments. For those who consider this to be good news, it is something of a misery loves company scenario.

In personal interviews given for the survey, retail executives listed some of the reasons they felt help to make turnover lower in produce than in some other parts of the store. These included:

?Produce is a more interesting work environment, more "alive."

?Produce employees are often paid more than the store average.

?The produce department is viewed as the "place to be" because it sets the image for the entire store.

?Produce merchandising can be more creative and challenging, thus attracting the best people to the department.

?The department is more dynamic: New crops arrive each week, seasons change the product mix, controlling shrink is more exacting, display specifications are not set at headquarters.

?The department is more social and fun because a team work environment is generally required.

?The department is more casual, with a "roll up your sleeves" orientation rather than a "white shirt" mentality.

These anecdotal reasons appear to point to a department where work is more exciting and less monotonous than just stocking shelves or cases. Whether from the nature of the actual work done or the image that young people have of the department, there seems to be more variety to working in the produce department. This ties in with what McLaughlin indicates is the aversion of the new generation in the work force to boring jobs.



Unfortunately, not everybody shares the "excitement" that some associates feel for the produce section, as proven by the still high turnover numbers. According to the survey, the top two reasons that employees left the department, by far, were for better pay and for better career advancement opportunities. However, these are probably the two main reasons for which people leave almost any job in any industry. Executives also cited a number of other reasons for produce employee departures, including frustration, lack of training, lack of self-esteem, hours, type of work, going back to school and full-time opportunities.

These secondary reasons point to a work force that does not feel connected to the main movement of the organization. The executives mention frustration, lack of training and lack of self-esteem, all indications that the workers do not feel they are moving toward any kind of long-term goals. They probably consider their jobs menial labor for an hourly wage and not as the beginning of a career path. Training, a show of commitment from management and more communication between the employee and the organization would appear to go a long way toward curtailing some of these feelings and thereby cutting turnover.

"An awful lot of research in other industries shows that one of the biggest costs of high employee turnover is not simply the costs of recruiting and retraining, it's the productivity loss that ensues for long after the new substitute employee is hired. That's in terms of lost sales and customer service. That's the indirect and more substantial loss to the organization," McLaughlin says.

"I think that if we invested more in not only training but in career planning, that we'd see high turnover rates reduced. This is speculation on my part, because we haven't done the research, but I think that lowered turnover would lead to greater customer satisfaction and eventual organizational profit."

Despite the problems of high turnover and consuming managerial time with continual recruiting and training, the produce department's labor is very efficient. To date, the cost of labor as a percent of department sales is less than 10 percent across the whole spectrum of supermarkets. McLaughlin feels that produce labor has remained very productive despite rapid growth in the department.

"In general, the produce department's productivity compares very favorably, if not a little superior to the rest of the store," he says. "The produce department presents a number of challenges for productivity because we continue to increase the number of products without greatly increasing the number of employees. So each department, each manager is responsible for a greater number of products.

"The number of SKUs in the produce department since the mid 1970s has grown from 65 to 500. The number of employees has not grown by the same ratio. It's a lot more difficult to manage, to order product, to establish inventory levels, to rotate stock correctly with 10 products than it is one big display of a single product. The challenge is fairly substantial in maintaining that same productivity level. I expect, if you want a cautious forecast, the productivity levels to continue to improve gradually as more limelight is shed on the overall importance of the produce department in overall store positioning."



If there is one message to retailers that comes from this research, it appears to be that more creativity needs to be applied to the recruiting and training of produce associates. By the same token, more attention has to be given to the employees, especially new employees, so they feel they are involved in something that is interesting and important to the organization. They also need to feel that the company is committed to their future. Perhaps the report itself sums it up best when it says:

"It appears from the results of FreshTrack 1998 that most produce companies view human resources from a 'traditional' viewpoint. Typically, whether a grower/shipper, wholesaler or retailer completed a survey or participated in a personal interview, responses were largely 'expected.' In other words, the tried and true methods of recruiting, training and retention continually emerged with very few truly innovative ideas surfacing from the pool of responses.

"Perhaps produce executives should cast a wider net by looking outside the produce industry for innovative and effective recruiting, training and retention methods, which together with their 'tried and true' methods, will strengthen their labor pool with quality candidates, committed to their jobs and to the company."