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Hiring time

Experts say a recession is the perfect time to build your team.

March 18, 2008

This article originally published in Retail Customer Experience magazine, April 2008. Click here to download a free PDF version.

An ad for a store manager for sports equipment, apparel and accessories retailer dELiA*s in the Westroads Mall in Omaha, Neb., says the chain is looking for a leader who will maintain optimum store staffing while adhering to budgetary goals.

Like hundreds of other stores, dELiA*s has the bottom line in mind when making store-related decisions, but like getting a teenage daughter to walk willingly into the mall with her middle-aged father, the balance of maintaining staffing and the budget isn't easy to accomplish.

It's a dilemma most retailers would rather not face in a period of economic recession — keep the current level of staff, lose money now but gain customers in the long-term, or maintain profit by letting go of staff and possibly losing customers through poor service.

A number of retail stores will face this conundrum when they can't afford to maintain their current level of staff because not enough costumers are coming through the door, says Michael Brown, customer service expert and author of "Fresh Customer Service: Treat the Employee as #1 and the Customer as #2 and You Will Get Customers for Life."

But some retail experts say a recession is the perfect time to make a business stand out. Not only that, but it's an opportunity to hire some of the best employees.

Up-service the customer

"The quick and easy answer in a time of recession is to let go of staff in hopes that [retailers] can make that work," Brown said.

Cutting off one employee who used to work a couple of hours may save $14 up front, but that's nothing compared to what you will lose in the end, Brown said.

Costumers are not happy to spend money during a recession. They realize they have to spend frugally.

"A lot of times they are already on edge and, by the stores making the experience unsatisfactory, it makes the situation even worse," Brown said. "When times get better, they will remember you and not come back."

Brown says retailers shouldn't cut back during this time because this is when other stores are cutting labor, giving bad service and not delivering a quality customer experience.

"You go the extra mile and, since the bar has been lowered by other stores, customers will see a diamond in the rough and remember that in the future," he said. "If [retailers] can make my day, even for a brief moment — particularly when I'm not happy about what is going on in my life — I will remember that when a recession is over," he said

Brown says if you have to make cuts, don't cut anything that interferes with the customer experience. Instead, cross-train front-line workers to do simple tasks they normally would call a manager to do, for example.

Hire up

Making a quality customer experience often relies on having the right workers. And a recession can be the best time to attract top-line retail talent, said Roberta Matuson, principal of consulting firm Human Resource Solutions.

"This is the perfect time to reshuffle the decks," Matuson said. "Some great people with strong customer service skills will be hitting the pavement looking for work.

"If we spin into a recession, it's not just going to be the losers out there, it's going to be some really great people who just got caught in the middle, she says.

"So you're going to have some great opportunities to pick up talent that you wouldn't have if the economy kept chugging along," Matuson said. And now that you know you can get these people, don't be afraid to get rid of the ones who aren't working out.

"This is the perfect time to evaluate who to keep and who to let go. You will have no trouble replacing them with customer-oriented people."

Not there yet

 While 61 percent of the American public believes the economy already is suffering through a recession, according to a January 2008 Associated Press-Ipsos poll, we're not there quite yet.

The NRF predicts that retail industry sales (which exclude automobiles, gas stations and restaurants) will increase 3.5 percent from last year. So far, sales in 2008 are doing all right. Retail sales rose 2 percent over last year.

A recession can particularly be a boon to discounters and wholesale outlets such as Wal-Mart and Costco, according to a CNNMoney.com article, because consumers try to control their expenditures.

To that point, Wal-Mart and Costco have seen better-than-expected store sales recently. Whereas Wal-Mart's rival, Target, which sells a majority of apparel and home goods, has seen its sales take a hit.

Addressing a members-only lunch crowd at the National Retail Federation's 2008 trade show, Ben Stein — lawyer, economist, White House speech writer, Emmy-winning game show host and actor — said retailers don't need to worry about an imminent recession.

"There has never been a recession where retail sales fell from one year to the next," he said. "It would be very, very unlikely that we'd have a fall in retail sales from 2007 to 2008."

It's not as easy as it sounds

Though it's important to maintain a certain level of customer service and keep the best talent, it really is not that simple, is it?

Retailers have to keep a store open with money; therefore, they have to be frugal with what they have, particularly in a recession, said Dan Butler, NRF's vice president of retail operations.

When sales are soft, retailers typically adjust advertising and staffing dollars proportionately.

"It's never their intent to reduce customer service," Butler said. "But sometimes they have to get creative in how they do things."

To maintain the same level of staff and thus the same level of customer service, stores often will ask current employees to work additional hours, and then only when absolutely needed."(The stores) take it day by day, hour by hour to make sure they are not wasting staffing," Butler said.

But experts hold firm to the idea of standing tall even when the economy slumps. In the end, customers will notice, and reward, stand-out service, Brown said.

"The way you win in retail is to do even better when your competition is down. The people that do it right will be considered the crème de la crème."

Patrick Avery is editor of selfserviceworld.com and a regular contributor to this magazine.