Talent Management in Today’s Workforce

Labor costs are higher than any other costs in the cold storage industry. If an operation has a lot of case picking and laborers, it can far outpace the second and third highest expenses – energy and property taxes.

And yet, the industry averages a 50 percent worker turnover in the first 90 days of employment. Both in return on investment as well as smooth and efficient operation of the business, it pays to recruit your workforce carefully and retain that workforce wisely.

Recruiting: Hire for Attitude, Hire to Stay

“If you’ve got a 50 percent turnover rate, somebody is not good at hiring, not paying enough, or not being honest about the future that worker has at that company,” sums up Brian Fox, Director of Sales at Terminal Cold Storage and a seasoned recruiter and cold storage operator. “Turnover costs a lot of money and if your turnover rate for new recruits is anywhere close to 50 percent, I suggest that company needs to go back and look at the basics of what it takes to hire and keep a good workforce.”

Fox says good recruiting begins with knowing what you want. “You can’t successfully recruit without fully defining the position you’re trying to fill and knowing what you are willing and able to compensate someone in that position.”

Fox also says the recruiter should think carefully about how much education their recruit should have and why. “Often when you hire someone with a military background, you get a disciplined, hard working individual who might not have a degree. The recruiter has to ask themselves if they really need that degree and if they’re willing to pay for it.”

And finally, says Fox, you have to be honest. “The recruiter should be completely forthright about the career potential for the position, what the nature of the job really is, and what the company really can pay.”

“Hiring is an art – it’s a slow, methodical process and the longer you take, the better off you’ll be in the long run,” advises Larry Sokolowski, Vice President, Human Resources and Insurance for United States Cold Storage (UCSC). “We use a 90-day probation for new recruits, we train them, we ensure they understand the job, and if they can do the job, we recognize that. Otherwise, if we don’t get them in the right job, we try to move them along.”

“We hire for attitude, which is the opposite approach to the more typical, ‘let’s hire for skills and hope they fit in method’,” explains Mike Bolander, Vice President of Operations at Columbia Colstor. “We’re looking at people who might not have prior experience but do have the soft skills we want – demonstrate a genuine interest in the company, express an ability to show their interpersonal skills, display curiosity, and come across as a good team player.”

Bolander says they glean these traits by using a structured interview and asking questions designed to test how the candidate will interact at work, their attitude towards customers, and other behavioral responses. He says the interviewers are trained to identify the behaviors they’re looking for and interviews are always conducted by a panel so there is more than one assessment of the candidate.

“Since undertaking this approach to hiring, and training supervisors to be more effective at selecting the folks they’re going to supervise, we’ve experienced a significant decline in turnover,” admits Bolander.

Henningsen Cold Storage has a similar approach.

“When we hire, it’s really all about the interview and the interaction between the candidate and the supervisor and others who are doing the interviewing,” says Paul Henningsen, Jr., Vice President of Corporate Development and Engineering at Henningsen Cold Storage. “We’re a family-owned business and we have a family-oriented culture and we stress to our managers to hire people that fit into our culture and share our values.”

Henningsen adds that the company stresses good people skills and candidates who communicate well with groups. “And we really put that to the test whether we’re interviewing a potential intern or a general manager. The candidates may sit down with an entire executive team during the interview process and for some, that’s a fairly stressful situation.”

And while all the companies like to promote from within, that’s not always possible.

“Getting a good pool of talent from which to select new employees can be a challenge in our industry,” points out Bolander. “Storage facilities are so often located in sparsely populated agricultural communities – it’s easier on the distribution side as those operations are more closely located near urban areas.”

“We maintain a positive identity in the community and sponsor activities like children’s sports team, community fairs and parades, and also encourage our employees to volunteer in the community. We even have a parade float that we use as a recruiting tool,” says Bolander. “We use as many ways as possible to communicate our message, from craigslist.org and other electronic methods to 4x8 foot sandwich boards that say ‘Now Hiring’ to attract walk-ins.”

Bolander advises that it’s also essential to connect with the local education system. “We speak about our company and industry at the local high school career awareness days and support the community job fair. We also participate in a regional job training program that is a collaborative consortium of manufacturing employers. The state employment agency refers candidates and the local community college hosts training events and each employer holds sessions at their facilities.”

“We often depend on relationships with local universities to recruit new employees,” says Henningsen. “We get to know individuals while they’re active students. We hire them as part-time or seasonal workers or as interns or we meet them through job fairs and community social activities, and when they graduate, they know who we are and vice versa.”

Henningsen says his preference is to put a recent graduate into the company’s internship program for 90 days and if that is successful, move the graduate into Henningsen’s management training program after an offer of employment has been made. This gives the recruit the opportunity to work at different Henningsen facilities, learning different jobs so they can figure out what they like and gravitate towards that position.

Henningsen also uses an employee bounty system at some of its facilities. If a worker refers a friend for a position at the company and that friend remains employed by Henningsen for at least a year, the worker can pocket up to a $1000.00 finder fee.

Continuous Improvement Means Continuous Training

“Training is integral to retaining your best employees,” says Fox. “It helps them determine their career path, understand the objectives of their job and feel accountable for meeting those objectives, and gives them the tools they need to be successful and feel good about their relationship with their employer,” says Fox.

He believes every company should have its own training program and not rely on what employees have learned elsewhere. “You have to certify your forklift drivers and teach case pickers how to do their job -- this is not easy work. Unlike a lot of professions, when you switch companies in the 3PL world, everything is different,” explains Fox. “The WMS is different, customers are different, and there are regional differences.”

Fox suggests companies should track and record their training efforts, conduct work-behinds and walk-behinds, and management should persistently follow-up and check on how employees are doing with their training.

“Training is not a one-off deal. It should be ongoing for all employees, new and veteran, and managers should be hands-on observing the results of that training – not to try to catch the employee at something but to support them in their efforts to improve.” Fox concludes, “Continuous improvement means continuous training.”

Sokolowski says USCS offers training to develop employee skills at all levels and in every department, at its new “USCS University.” “Managers, supervisors, engineers, and administrative staff participate in their own company-sponsored programs focusing on job-specific skills as well as general warehousing, logistics knowledge, business communication, and management skills.”

USCS line personnel also have similar training programs says Sokolowski. “Each of our facilities conducts a range of training programs with its staff in coordination with an in-house OSHA/EPA training coordinator who oversees all regulatory compliances. These programs include Forklift Safety, Material Safety Data Sheets, Risk Management Plan, Process Safety Management, and Hazard Analysis & Critical Control Points.”

For senior managers, USCS offers specific advanced education at the Swire Group Management training program at a leading global business school located in France.

Henningsen says that while they do most of their training in-house, they do send a lot of associates to the WFLO Institute for additional management and technical training. And he adds, “We also offer tuition reimbursement for any classes, as long as it’s related to work.”

Retaining the Excellent Employee

Once a company has invested time and training in its employees, Fox believes the best way to get a full return on that investment and retain those employees is to pay for performance.

“It’s been proven time and time again,” says Fox, “that you keep the good workers by paying them fairly for the basic work they do, but you pay for good performance on top of that. The competition is healthy and the employees are earning more money so they’re happier and in the long run, you won’t have to pay as many workers.”

Sokolowski reports that one policy USCS has that helps with employee retention is that the company is transparent in communicating the value of working at the company.

“Work is much more than the dollars they take home in a paycheck,” states Sokolowski. “We are always trying to come up with things employees need to do their job and make their life better and communicate that to them. We give them comprehensive statements about our medical plans, voluntary benefits such as vision or spousal life insurance, our generous pension plan and USCS’ contribution to their 401Ks.”

“We want to keep our associates happy, we want them to stay with us and be their employer of choice and one way we do that is by having an outstanding open door policy,” says Henningsen. “If an employee has a good idea, we make it easy for them to go through the chain of command to the company president and when an employee does have a problem, they know resolution can come if they can call the company president who will then ensure the right people respond to that employee.”

Henningsen adds, “My expectation is we all need to be challenged in a good way. We don’t want a bunch of ‘yes’ people. If an employee doesn’t agree with something, we expect to be challenged in a professional manner -- leave your pride at the door and figure out the best solution together.”

Bolander reports that Colstor recognizes three fundamental areas to successfully managing employment relationships. “First, we offer a competitive salary, good benefits, a good environment. But, it goes beyond that. Highly motivated workers aren’t satisfied with just the fundamentals, they need to see the value of the work they perform individually, identify with their responsibility, and self-reinforce their experience of success – if I do a good job, I know it, I can self-assess.”

“Second, we support this motivation by allocating responsibilities and accountability with distinctive boundaries,” explains Bolander. “Workers can say this is my part of the building, this is my shift and this is my function, this is me and my group, this is my team. We provide the opportunity to know where their responsibilities are and how much they are accomplishing.”

“And third, we work hard to make our employees proud of the organization they are a part of by displaying a genuine commitment to our values and delivering on them. We’ve extracted tangible measures from our mission statement so we can determine if we’re making progress and are competitive within the industry and within our own company,” says Bolander. “By doing this, we get employee buy-in to the welfare of the company and management and workforce have mutually inclusive objectives.”

And, Bolander says, it pays off. “We have low turnover, improved productivity, and such a significant decline in safety incidents, we’ve been able to reduce our workers compensation insurance.”

Sokolowski says USCS has conducted employee opinion surveys in the past and is now implementing them on a three-year rolling basis. “We conducted our first survey five years ago, implemented changes based on the survey results, and just recently completed another one,” he says. “We looked closely at our prior survey and our current survey and realized huge positive things have come about -- we’re doing things better. It’s not only a way of making sure employees have a voice to tell us what’s on their mind, it’s turned out to be a great management tool.”

“Our philosophy on managing our workforce is we want to do everything we can to send everybody home to their families at the end of the day as healthy and happy as they can possibly be,” states Sokolowski. “ If they want to come back tomorrow, wonderful. If they don’t want to come back, don’t. There are too many miseries in this world without having to add being miserable at work.”

By Alexandra Walsh, Vice President of Association Visions and a contributor to COLD FACTS. Email: awalsh@associationvision.com. This article was originally published in in the January-February 2014 issue of COLD FACTS Magazine.