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People
What has long been intuitive is now indisputable: Grocers that invest in relevant formal education for employees can reap short-term and long-term rewards that far exceed their initial expenditures. New research commissioned by the Western Association of Food Chains (WAFC) and conducted by AlixPartners offers compelling evidence that grocers can make significant cultural and financial strides by taking a more proactive, more holistic, more intentional approach to developing talent.
Traditionally, retailers have trained their employees for the specific tasks they need to execute. Employees learn how to succeed in their current role – but not always how to succeed in the next one. Management, budgeting, analytics, decision-making, critical thinking, innovation and other skills are more difficult to teach on the job. That reality poses a challenge for grocers that want to be able to promote from within and build a strong organization.
Grocery CEOs serious about developing their people either have to commit to building a robust internal educational program – a major lift to establish and maintain – or they need an external option. The WAFC has spent decades painstakingly designing the latter.
It offers two programs designed to prepare grocery employees to advance their careers: the Retail Management Certificate (RMC) for aspiring managers without postsecondary education and the Food Industry Management program (FIM) for executives. On average, RMC graduates stay with their companies for 28% longer – roughly five years more – than their non-graduate peers. FIM graduates are 108% more likely to stay than their non-graduate peers and do so, on average, for eight years longer.
Strengthening culture
Retention and turnover can be measured – more on that later – but the benefits of a companywide focus on providing educational opportunities to employees extend well beyond what can be quantified. Grocery CEOs who have embraced the WAFC’s programs as part of their business model give example after example of how graduates of the program show up differently and influence their colleagues.
- What is it worth to have more employees arriving invigorated each day as they apply the new skills they’re learning?
- What is it worth to have employees who can teach their team members and their peers more competently and more confidently?
- What is it worth to have employees that approach their work with a new understanding of how it contributes to the company’s bottom line?
- What is it worth to have water cooler conversation among colleagues include discussion of different skills and tools they’re attaining through their education?
- What is it worth to go from being an organization where employees are uninterested in education to an organization in which everyone is raising their hand to learn and improve?
One CEO described a recent store visit during which an assistant store manager came running over, her eyes lit up, to share how her increased understanding of Excel spreadsheets was allowing her to make key calculations and better-informed decisions than she could before she began the RMC program.
In another organization, which has been leveraging the WAFC’s programs for years, visitors to stores describe employees with a remarkable sense of ownership – eager to talk about their products and services, about the positive experiences customers have shared, and about what’s coming next.
Mitigating turnover
Retention of the high-potential leaders who participate in the RMC and FIM programs is the return on education investment that’s easiest to measure, but it doesn’t stop with participants themselves. The Coca-Cola Retailing Research Council found that turnover in grocery is closely correlated with management performance, and above-average managers make a meaningful impact on retention.1 Similarly, turnover is much lower on teams with average managers versus below-average managers.
Everyone who graduates from the Retail Management Certificate and Food Industry Management programs is in a leadership role or soon to be promoted to one. As those employees gain skills that make them better bosses, the associates they lead are also more likely to stay with the company longer.
High turnover has long been a challenge for the grocery industry, and many have come to accept it as an unescapable reality of the business. For grocery CEOs willing to attack the problem creatively, however, there are significant cost savings to be realized.
Not only does turnover monopolize the resources of HR, but it requires a significant amount of management time and energy as well. Service levels and productivity often suffer as a result. For the veterans on teams with high turnover, continually picking up the slack for less experienced associates can be draining and prompt them to consider leaving as well. The Coca-Cola Retailing Research Council reports that, given all those factors, turnover consumes up to 10-20 percent of industry profit. 1
Retaining leadership
Retention isn’t only important to avoid the hassles and expenses of turnover. Grocery CEOs need to be thinking about their talent pipeline, about who they can be developing to make key decisions for the company in the next 10-20 years. The best stewards of a grocery organization will always be those who have an intimate knowledge of the industry and its traditional best practices but also have had exposure to broader business concepts, processes and knowledge that will allow them to bring in new ideas.
While succession planning might be most often prioritized for C-suite positions, building the bench is imperative for roles throughout the organization. Researchers have found that, in retail broadly, having more experienced employees has a material impact on revenue and profit. In one study cited by Harvard Business Review, researchers discovered that stores with a customer-facing employee base that was more tenured, more skilled, more skewed toward full-time, with more experience in rotations, generated 50% more revenue and 45% more profit than stores on the other end of the spectrum.2
Creating a legacy
For all the ways that investing in employee education can benefit companies, ROI isn’t even close to the whole picture for the executives who have embraced the WAFC’s programs. For them, it’s about legacy. It’s about opening the door to careers with unlimited advancement potential by giving people the opportunity and confidence to pursue their education.
More than 5,600 associates have graduated from the RMC program, and 68% have gone on to earn additional certificates or degrees. Most had no postsecondary education before the RMC certificate, and the program sparked a realization in them that they could aspire to more.
As for the FIM program, more than half the graduates are currently in senior leadership or executive roles – and highly likely to pave the way for more people to advance in the same way they have.
Grocery CEOs can accept the status quo when it comes to turnover. They can accept the status quo when it comes to what defines a successful career. Or, with the programs created by the WAFC, they, too, can aspire to more.
Sources
- Fighting What’s Different Differently: Retention in the Grocery Frontline. Coca-Cola Retailing Research Council, Jan. 2024, www.ccrrc.org/content/dam/ccrrc/us/en/pdf/north-america-large-store/Fighting-whats-different-differently-final.pdf.
- Gautier, Kate , et al. The Value of Employee Experience, Quantified: Technical Research Paper. Jan. 2022, hbr.org/2022/03/research-how-employee-experience-impacts-your-bottom-line.
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