Sarcasm alert: you may not have noticed, but the current economic situation entails high inflation, interest rates creeping skyward, $5-a-gallon gasoline, volatile markets (including intense hand-wringing in the cryptocurrency game) and general malaise regarding the economy. Thus, the talk of a recession could certainly be a game-changer in the Great Resignation era, dampening the degree of job hopping that’s plaguing the business world.
The New York Times recently queried a number of financial institutions, economists, analysts and strategists to gauge their take on the likelihood and depth of a possible recession. Many agreed it was likely, but fewer felt the impact would be substantial. Push variables that can’t be foreseen could spell a tipping point.
The question then becomes, what impact would a recession have on the jobs market? Kevin Kokinda, owner of Resumedics Career Strategy & Solutions, opined on the very subject via LinkedIn: “Typically, the road to a recession means unemployment increases as companies start trimming employee fat to keep costs in line. Also, job turnover decreases as more employees are tentative about jumping ship in the face of ambiguity.” He added that while employees are still in a position of power, that could well change in 2023, noting, “If more companies become skittish about a slowly tanking economy, hiring freezes will be imminent.”
Thus, it’s against this backdrop that we offer this month’s State of the Industry report on hiring and retention in the age of the Great Resignation. Our panel’s dealers discuss the job markets in their respective geographies and outline what changes, if any, they’ve needed to make to become more competitive in a hotly contested market where, in some instances, the available-jobs-to-unemployed-worker ratio is greater than 2:1.
Wisconsin
Document Imaging
For Cory Spice, president of Green Bay-based Wisconsin Document Imaging (WDI), his dealership covers the eastern third of the state, from north of Green Bay and the Fox Cities to south of Milwaukee to the Illinois border. Competition for top-level workers has been intense, and while WDI taps into the newer digital outlets such as LinkedIn and Indeed, employee referrals have proven to be more fertile ground.
“We’ve been fortunate to have limited turnover,” Spice said. “However, we’ve had several retirements in the last two years, and we’ve replaced approximately 75% of those positions with employee referrals.”
It’s attractive for a candidate and employee to work for a company of WDI’s size where an employee is allowed input on the company processes, can drive change and see how their contributions help the company grow.
– Cory Spice, Wisconsin Document Imaging
Unique Circumstances
With a rash of mergers and acquisitions in the industry, Spice has also sourced employees who were reticent about joining larger organizations, along with employees who left the industry following a deal, only to decide they’d missed working in the office dealer space. With 30-plus teammates, Spice doesn’t consider WDI necessarily small, but growing competitors have positioned it among the smaller dealers in their markets.
Employees also tend to feel they have more of a voice when working with a dealer of WDI’s magnitude, according to Spice. “It’s attractive for a candidate and employee to work for a company of WDI’s size where an employee is allowed input on the company processes, can drive change and see how their contributions help the company grow,” he added.
Spice also has to wage HR battles with larger, more fortified competitors, and the inflationary pressures keep WDI in a constant state of monitoring its compensation plans to remain competitive. Retirements have, for the most part, keyed the only turnover in recent times, but Spice admits WDI’s fortunes in that regard are less about mission statements and more a product of having solid teammates who are driven by providing quality customer service.
In essence, he feels WDI’s success stems from employees knowing their roles and expectations, feeling valued and empowered to do their job, and getting recognized for their performance. The biggest stumbling block, he yields, is career advancement opportunities, given WDI’s size.
“We do try to have regular conversations with employees on what their personal and career goals are,” Spice said. “How can WDI help them accomplish those goals? This is an area we’re trying to continue to improve on as a company.”
Shifting Tides
Across the country in Valencia, California, Image 2000 has found the quest for new talent to be significantly easier than it was in 2021. Company CEO Joe Blatchford termed the previous year’s market “impossible,” but senses the tide has turned across many of the dealer’s recruitment areas of need. As is the case with WDI, Image 2000 finds employee referrals to be the go-to source for new blood, with LinkedIn and Indeed providing supplemental candidates.
Image 2000
One factor weighing in Image 2000’s favor is its readily available stock of product inventory—no small consideration in attracting sales reps when knocking heads with competitors whose OEM vendors have 90-day-plus waiting periods for product arrivals.
“We’ve definitely focused on tailoring our compensation plans to cast a wider net for strong sales people across all industries,” Blatchford remarks. “We’ve also introduced flexible/hybrid opportunities for sales reps and administrative staff. Two years ago, we introduced free health benefits to our employees, and we have added a significant number of subscribers to those plans.”
We encourage every manager to invest in the development of each member of his/her team and not to be shy about asking for help when needed.
– Joe Blatchford, Image 2000
Being a small- to medium-sized dealer, Image 2000 competes on an HR level with not only bigger dealers, but all industries with salesforces. Having cultivated a family-type atmosphere goes a long way toward fostering loyal and invested employees, according to Blatchford; gestures that acknowledge and celebrate team members go a long way—from monthly birthday celebrations to tenure milestones and achievements. Image 2000 offers gift cards to employees who receive positive feedback, either from teammates or clients, and incents top performers with an annual president’s club trip.
“We encourage every manager to invest in the development of each member of his/her team and not to be shy about asking for help when needed,” Blatchford noted. “These are the reasons we believe our turnover rate amongst top performers remains very low and, outside of sales, is well below the national average.”
Pearson-Kelly Technology
The ability to source quality employees certainly appears to be geography dependent. With Pearson-Kelly Technology (PKT) of Springfield, Missouri, the candidate well has dried considerably since the end of 2021. CEO Chelsey Bode believes the hiring game isn’t a one-size-fits-all proposition and requires a multifaceted approach. LinkedIn, Facebook and social media have yielded many “awesome candidates” in Bode’s estimation; Indeed attracts many lookie-loos, but little in the form of application filers. Referrals, again, reign supreme, and PKT incents handsomely at six and 12 months of employment for team members.
Still, recruitment isn’t completely thrust upon the HR department, according to Bode. “The leadership team must always be recruiting, whether a position is open or not,” she said. “By the time we post a position, it’s generally too late to nurture that rock star not looking to make a career change.”
The leadership team must always be recruiting, whether a position is open or not. By the time we post a position, it’s generally too late to nurture that rock star not looking to make a career change.
– Chelsey Bode, Pearson-Kelly Technology
One of the real tasks for Bode and PKT is elevating the dealer’s value proposition in the eyes of prospective employees. This can be a challenge from a generational standpoint, as a Gen X, millennial or Gen Z prospect may not all share the same value sets or prioritize them similarly. In offering higher comp plans to newcomers, that level must then be applied to the current staff to avoid losing incumbents.
Picking battles
“We’ve found that compensation alone isn’t the primary driver for most, but will admit we’ve lost a fair number of individuals due to compensation and/or wanting to get out of the industry in general,” Bode remarked. “While difficult, we have to remind ourselves who we are as an organization. Much like selling to clients, you can’t be everything to everyone.”
What attracts individuals to PKT is its culture, particularly when it comes to work-life integration. The dealer pays as well as the market bears. Remote work is possible under certain circumstances, but perhaps the greater value is in providing team members a voice to impact change within the organization. Those candidates whose check boxes fall within the narrow confines of compensation alone are generally not an optimal fit at PKT.
Retaining top talent hasn’t been much of a factor for the dealer, but the most difficult to keep are the entry-level positions. PKT has KPIs coupled with a bonus opportunity for almost every position to drive the behaviors it seeks, and Bode is working on a phantom stock program for some key positions to foster retention.
“Even more so, it’s to motivate growth in a profitable way as if it were their own company,” she added.
IT Challenges
Prosource
The same tight job market persists in Cincinnati, where Prosource’s emphasis on recruiting and retention are strategic imperatives, notes Brad Cates, president and CEO. In terms of technology roles, this is further exacerbated in a space replete with sizeable signing bonuses and the ability to work from anywhere.
“It’s a more challenging environment than it has been historically,” he said. “But the great companies will make it work to their advantage. That’s what we intend to do. Recruiting and retention continue to be our top priority, right along with the customer experience.”
It’s more about having a relationship with your employees and making sure they know you care about where they want to go and helping them get there.
– Brad Cates, Prosource
Prosource taps into LinkedIn, Glassdoor, ZipRecruiter and local industry associations. But team members are the most predictable resource, as they can communicate the dealer’s unique culture and approach to their friends and associates on a personal level, producing candidates that dovetail with Prosource’s goals and expectations. The dealer’s customer- and team-oriented culture—clearly communicated throughout the vetting/interviewing process—is a filter for attracting like-minded individuals who can relate to (and want to be a part of) the organization.
Training and development programs, including its technology sales and IT engineer training curriculums, help attract candidates who may lack industry experience but demonstrate an attitude, capability and team fit. “As long as they have those foundational things, our training programs are designed to attract these candidates, equip them with the tools for success and provide them with a clear career path and opportunities for growth,” Cates noted. “That’s the value proposition for the candidates.”
One of the greatest challenges the dealer faces is in constantly connecting and building a sense of team with its employees. Cates feels that entails being clear on what team members’ professional and personal goals are and how Prosource can help them achieve that end.
While compensation is always a driver and increasingly more important in a competitive landscape, Cates finds that employees don’t typically leave because of money. “It’s more about having a relationship with your employees and making sure they know you care about where they want to go and helping them get there,” he said. “So in a lot of cases, it’s a leadership issue to ensure your teams have the support they need to stay engaged in their work and our mission.”
The same conditions exist down in Houston, where Stargel Office Solutions finds that the process to identify an optimal candidate has shifted from conducting four to six interviews to now requiring 10—and not even all candidates show up for the interview. TJ DeBello, vice president of sales, notes the company has had the most luck in sourcing through college business career fairs and professional head hunters.
Promoting Teammates
Stargel Office Solutions
According to DeBello, Stargel is updating its marketing plan on social media to recognize and promote more employee-related accomplishments and milestones to market the dealership on LinkedIn. From an Xs and Os standpoint for the hiring process, managers ask prospects a set of questions based upon the dealer’s core values.
Not surprisingly, given the “extremely tight” hiring market and general economic conditions, Stargel has found it necessary to be more competitive from a compensation point of view. “With the current inflation trend, we’ve had to adjust or ramp up our comp plans,” DeBello added.
We’ve put the emphasis on additional comp incentives to reward those who are bringing in net-new clients or bundling service into their agreements. We’ve increased the comp payout for net-new business by around 20%.
– TJ DeBello, Stargel Office Solutions
Even during the height of the pandemic, Stargel embraced the opportunity to add staff, wanting to get a jump once the market began to gain momentum, and the strategy paid off. Even with some turnover, the dealer has been able to add reps to its tenured salesforce and maintain a vast majority of the new reps during the past year and a half.
“We’ve put the emphasis on additional comp incentives to reward those who are bringing in net-new clients or bundling service into their agreements,” DeBello remarked. “We’ve increased the comp payout for net-new business by around 20%.”
For Woodhull LLC of Springboro, Ohio, the lack of qualified candidates and thin overall pool caused the dealer to take a more active approach to attracting prospective employees instead of relying on an inbound model. Robert Woodhull, sales supervisor and marketing director, notes that with all businesses relying on the same hiring channels, recruiters and online platforms, the focus needs to shift to how the dealer presents itself and sells the company to would-be team members.
“I think the value structure of what people are seeking has dramatically changed as we come out of COVID,” he said. “People realigned and readdressed their values and what they’re looking for from their work. They’re seeking a new balance between work and life; some want remote opportunities. While not every position allows for it, you have to be transparent with them. I also think culture is more important than ever before.”
Rising Comps
Woodhull finds LinkedIn to be more effective in sourcing sales and upper-level management candidates, while admins, warehouse employees and technicians are more driven to the popular online employment resources cited. In terms of comp plans, he noted the dramatic change in the going rates being proffered by competitors, but points out his dealership remains competitive in that regard.
Woodhull LLC
“If I’m not going to match competitive pay, which we typically do, then I have to provide other values,” he said. “Work flexibility, our family culture, the support they receive. We’ve taken an approach similar to how we sell to prospects from a product standpoint. We have to get them in the building so they can see and feel the experience. They need more insight than they can get from a blurb on Indeed. We also talk about upward mobility, the opportunity to provide a real career and a chance to improve their lives.”
Maintaining the best people can be a challenge, particularly when it’s not a function of unhappy employees in search of greener pastures. New hires don’t work out, some want a new profession altogether and others get picked off by headhunters. High-performing salespeople, by virtue of their book of business and lucrative earning potential, tend to stick around longer. The real task is in getting new reps up to speed and producing, which falls upon the dealer to develop programs that can make that journey smoother.
We’ve taken an approach similar to how we sell to prospects from a product standpoint. We have to get them in the building so they can see and feel the experience. They need more insight than they can get from a blurb on Indeed.
– Robert Woodhull, Woodhull LLC
“For technicians, admin and warehouse people, it’s all about providing new opportunities,” Woodhull said. “If they get bored or find higher pay elsewhere, we can fit them into another role or provide upward mobility. I don’t think there’s a secret formula to this; communication is important to determine why they may be leaving or what would help them stay. And there’s no one-size-fits-all approach, unfortunately.”
