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Hearth & Home December 2017

Most Important Asset?

By Mark Brock

Specialty retailers agree it’s their employees, but finding the right ones is quite a challenge.

It takes many elements to assure success for a specialty retailer – high-visibility location, creatively merchandised showroom, interactive web presence and strong relationships with suppliers of quality products. While all of these elements are essential, a recent survey by Hearth & Home magazine found specialty retailers in agreement that the single most important element is people – employees who are experienced, committed and well trained, and who have a passion for sales and customer service.

“Employees are critical to us in specialty retail because they are the face of the company and determine the kind of reputation we’ll have in the marketplace, which translates to sales,” said Bruce Erickson, who opened a Summer Classics Home licensee store in Highland Park, Illinois, in March 2016.

“It’s through good people that we separate ourselves from the Internet, which is mostly people looking at computer screens, and Big Box stores, where it’s mostly help yourself,” he continued. “The most important thing that a retailer can do is to create a comfortable environment inside the store that your employees will enjoy, and look for fun opportunities for them outside the store – going to lunch or dinner or to a baseball game. You’ve got to give people responsibilities. You can’t micromanage people because that approach burns them out pretty quickly.”

Hearth & Home People Survey

Erickson is one of 126 specialty retailers who responded to a recent readership survey by Hearth & Home magazine that was designed to learn more about how specialty retailers value their employees, and the challenges associated with recruiting and retaining talented associates. According to the survey results, the vast majority of specialty retailers view their employees as their most valuable asset. At the same time, retailers report that recruiting good employees is difficult, primarily because many applicants lack the knowledge, experience and personality to be successful at specialty retail. The survey also revealed that specialty retailers are working hard to demonstrate to their employees just how important they are to the business. Retailers say that providing a quality work environment is the most effective strategy for assuring employees of their value to an enterprise.

Daily personal communication, regularly scheduled meetings, recognition for outstanding achievement, and involving employees in decision-making are also among the many steps that specialty retailers are taking to support their associates as their most valuable asset. Retailers also offer incentive programs that make compensation packages attractive for those who succeed.

While specialty retailers view employees as their most valuable asset, management consultants and business owners share a word of caution when it comes to using this phrase. It’s easy to praise a workforce as essential to success, they say, but it is much more challenging to demonstrate that importance with policies, procedures and compensation in the increasingly competitive world of retail. Business owners also point out that it’s a two-way street because employees typically have opportunities to demonstrate their value to the business through commitment, extra effort and measurable results.

Two-Way Street to “Most Valuable” Asset

Casey Thornton grew up in and around specialty retail through her family’s spa and patio business. When her parents decided to retire in 2009, she and her husband, Jay Thornton, purchased one of three locations, which is in Watkinsville, Georgia, near the University of Georgia in Athens. Thornton agrees that employees are the most important asset, but it’s definitely a two-way street. Their store, Southern Spa & Patio, will provide the opportunity, but employees have to show initiative.

“Good employees do set us apart from the Internet and the chain stores, but good employees are hard to come by,” she said. “For someone to succeed in this business they have to be organized, they have to have the desire and they must gain product knowledge. A lot of people look to make top dollar from the first day on the job, but it takes time to learn the products and show that you have the desire to win. For the right person who shows initiative, we’ll provide the training and do what it takes to help make them successful.

“For employees who make the commitment to gain product knowledge, the rewards are there, for the store and for employees,” Thornton said. During a 60-day probationary period Thornton looks for employees who are focused on learning about products and the sales process. Employees who demonstrate their commitment are transitioned to the sales floor and lucrative commission opportunities.

“Employees who have the desire and make the commitment can earn more here than they could working in some other jobs that require a four-year degree,” she said. “We want to write larger commission checks because that means the store is also making more money.”

Supporting Your Most Important Asset

Wally Adamchik, president of FireStarter Speaking and Consulting, is a specialist in business leadership development and often hears the phrase “people are our most important asset.” From his experience, this comment can be a bit of a mixed bag for some businesses.

“People are our most important asset is one of the biggest clichés in business. Anyone can say it, and they know they need to say it, but far fewer back it up,” Adamchik said. “It seemingly comes down to dollars and cents, but the challenge is actually to create a workplace where people are the most important asset. A manager can tally the cost of benefits, but it’s more difficult to tally the savings from low turnover, although there is plenty of research to quantify the multiple. Salary hits the bottom-line, but what about positive customer service by an engaged employee?”

While salary and benefits are where the rubber meets the road in terms of how employees are valued, Adamchik proposes that there are many strategies that management can follow to help assure that their employees are in fact their most important asset.

“Employees are actually willing to work for a bit less if they are treated well,” he said. “Treating employees well means with respect in an environment characterized by trust, pride, and camaraderie. I can see how this would be especially beneficial in the specialty retail environment where customer service can be a trump card over the Big Boxes and the Internet. Leadership is required here, and often the owner of the small business is not spending a lot of time getting better at leading. They run the business, are in the weeds and manage the business, but what’s really required is leadership.”

So what are the essential steps toward leadership?

“It really differs across people and across life stages. But universally we know that trust in the boss, pride in the organization and camaraderie with those we work with create a great place to work,” he said. “We should never neglect what employees tell us about what’s important to them – recognition, positive work environment and communication. It’s up to management to communicate more, keep people informed, listen and get to know their employees as individuals. The most essential element is selection – you have to hire the right people not only in terms of work qualification but also in terms of fitting into your culture.”

Mentoring Offers Path to Forming Valuable Employees

Black Hat Chimney & Fireplace of West Seneca, New York, specializes in a broad array of fire-related products, ranging from fireplaces, stoves and inserts to outdoor kitchens with pizza ovens, gas grills, charcoal grills, smokers and furniture. It’s a business that requires highly trained and skilled employees.

“The labor market right now is not great for what we do,” said Bob Kladke, owner of Black Hat Chimney & Fireplace. “The emphasis for young people is for going to college and studying for jobs in computers or technology rather than the trades. When people join our company, they may not be the person that we ideally need so we have to train and mentor them until they become that valuable person.”

Kladke and other specialty retailers invest in their people through attendance at factory-sponsored seminars and closely supervised hands-on experience. Jobs range from lead generation and sales to construction and installation of technical products. Cultivating these kinds of employees requires careful monitoring of the work, and patient mentoring to bring someone along to become a valuable contributor to businesses’ success, which might require a year or longer. In many ways, the apprentice system of past generations is being revived.

“I came into the business when I was in my mid-20s, and I have more than 30 years of experience now,” Kladke said. “We learned this business on our own over many years; we have the experience. It’s now up to us to pass that knowledge along to the next generation, and mentoring is a big part of how we can pass along that experience. We have an opportunity to teach someone a craft that will last a lifetime.”

Specialty Retailer Emphasizes Personality, Teamwork, Relaxed Setting

There’s one personality trait that’s essential if you want to be a valuable asset in the world of specialty retail sales, according to Wes Mator, owner of Labadie’s Casual Furniture in Trenton, Michigan.

“You’ve got to be a ‘people person’ to make it in sales,” said Mator, who purchased the 46-year-old business in 2000. “In sales there is naturally a lot of rejection, people you spend hours with who don’t buy anything. You’ve got to be a naturally pretty upbeat person to succeed in those situations, and that’s a quality that’s part of someone’s personality. You can’t learn to be a people person. That’s the quality we look for in our salespeople and that’s what makes for a valuable employee.”

Mator also believes that teamwork, along with a relaxed, no pressure environment, is important in creating an employee- friendly setting. Labadie’s employees are not on commission. They receive base pay, and there is a monthly bonus program that everyone shares in.

“With our approach, it’s not uncommon for two or three of our salespeople to help a customer all at the same time while they’re in the store – someone is chasing down fabrics, someone else is showing umbrellas,” he said. “Outdoor furniture should have a relaxed air about it, so without commission pressure, it’s more laid back. In addition to more than 20,000 sq. ft. under roof, we also have several thousand additional square feet for an outdoor patio. We work in a pleasant setting where enjoying the outdoors is central to everything we do.”

The other essential that Mator emphasizes in creating a positive work environment for his employees is confidence in their abilities.

“My motto here is that, even though I’m the owner, if one of our people couldn’t close the sale, then I couldn’t have done it either,” he said. “I have a lot of confidence in my people, and I never second guess them. It will never happen.”

Employers Urged to Take Action to Support Workers

Roberta Matuson, president of Matuson Consulting, is known globally as The Talent Maximizer and is a go-to resource for expert advice on talent acquisition and development by leading corporations. Her primary advice to business owners is to “walk the talk.”

“Businesses should stop saying ‘people are our most important asset’ and start taking action,” she said. “I can pretty much tell my clients exactly what their employees find troubling about their workplaces. My clients know this as well, yet some still insist on doing another survey. I advise them to take the money and time they would spend on surveying and fix the problems that they are already aware of.”

While Matuson agrees that many factors contribute to a great work environment, business owners should face the fact that pay is important.

“The people who say that pay is not the most important factor are usually the people who are paid well and don’t have to worry about money,” she said. “Now let’s talk about the rest of the population. Many younger employees are saddled with college debt, and they would eventually like to move out of their parent’s basements. A $10,000 bump in pay may very well allow them to do that. All it takes is one call from a headhunter with an offer for a jump in pay and your well-trained employee will be gone.”

While acknowledging that pay and benefits are essential, Matuson is quick to add that many other factors come into play in attracting, motivating and retaining great employees who are truly an asset to their employers.

“The factors that are most important to employees vary based on individual values and needs. But one thing they all seek is a great boss,” she said. “People don’t work for companies. They work for people. If you want to attract and retain talent, then there is no better investment you can make than to develop your leaders. Be very careful who you let in the door in terms of hiring and promoting managers.”

Adding Value in a Family Business

A great many specialty retailers are family-owned businesses that have both family and non-family employees working side-by-side. Margo Goodwin, who owns United Brick and Fireplace of Madison, Wisconsin, with her brother, Joseph Goodwin, sees this situation as an advantage in assuring that employees are treated as an asset to the business and everyone works together as a team. Her staff is made up of half family members and half non-family members. The dynamic of such a team strengthens everyone’s contribution to the business through a sense of shared purpose as an extended family.

“Our business is growing, and I know that growth comes from the knowledge and experience of our staff that’s invested in what we do,” Goodwin said. “Whether someone is a member of our family or not, we all share the commitment that comes from being part of a team.”

Just as with a close family, Goodwin emphasizes staying in touch with her employees in ways that benefit the business and help foster a feeling that everyone is in it together. She and her brother have been running the business for 22 years, following in their father’s footsteps and continuing his commitment to taking care of employees.

“We give our employees a good environment to work in and we offer flexibility,” she said. “If something comes up with their families, we give them time off and we offer good compensation. It’s important to me that we can give our employees the things that make them feel important.”

Goodwin’s commitment to treat employees as an asset to the business has resulted in a close-knit organization where employees are given a chance to make mistakes, learn from their mistakes and grow. It’s also an environment that encourages open communications, just like in a family.

“My dad had an instinct about people and could always tell if something wasn’t going right,” Goodwin said. “I have some of that same instinct, and I invite people to open up to me, even if it includes something I’ve done that they don’t like. We have to give our people opportunities to succeed, and you can only do that when you know them well, including their strengths and weaknesses. My dad always wanted to give people a better opportunity in life than he had, and that remains an important part of our business and an important part of our family.”

Specialty Retailers Offer Comments on Value of Employees

The Hearth & Home survey concerning the value of people struck a chord with specialty retailers, generating a number of insightful comments. You will find some of these comments below concerning how readers view the role of people in their businesses, the many different challenges they face, and the ways in which they are working to create positive work environments that inspire great work.

Importance of Employees

“I believe that employees are of utmost importance to my business; if they are happy and involved in the business they will do their best for our customers, which translates into more sales.”

“Employees are absolutely key. Without them I have no business; I would merely have a job.”

“Employees are the face of our company, and the impression they leave with our customers is crucial to making sales and developing long-term relationships.”

“We try to constantly let our employees know how much we appreciate and depend on them. We have more employees with 20+ years with us than we do with five years or less. We value our employees greatly and they reward us by making our business a success.”

“Employees represent your company with the consumer every day and are your best advertising and referrals for business.”

“We have nothing if not for knowledgeable, motivated and well-compensated employees. They make the difference with our competition; I can’t do this alone!”

Challenges of Recruitment

“Without a doubt, obtaining, training, and retaining employees is, and has been, the biggest obstacle in getting my business to the place where it needs to be.”

“Employees are extremely important to us, but finding motivated people is challenging. There is a big difference between employees who just want to take customer orders and those who really want to engage in a sales process.”

“We have a difficult time finding employees who want to work during the hours when we are the busiest – evenings and Saturdays. I understand that, but the reality of retail is evenings and weekends.”

“Retention is based on hiring the right people, which is tough. We hire employees who want a career and a sense of belonging, not someone just looking for a job. If you are good at hiring, retention takes care of itself, within reason.”

Advantages of Family Involvement

“As a true family business, we strive to offer non-family staff all of the same benefits that family members receive. Our staff is the reason for our long-term success.”

“We are a family-owned and operated business in today’s world of employees; we are so blessed to have family who can commit themselves and understand what it takes to run a business today. I have found that if you give back to your employees with rewards such as gift cards, weekend getaways or lunches at the office, it helps to change the culture.”

“As a family-owned company, we sell a lifestyle, so a friendly, positive environment is so important when a customer walks into the store. It helps that everyone is family and there’s strong knowledge of the product line to guide customers to what would be best for them.”

Tips on Creating Positive Work Environments

“We try to compensate our employees as best as possible for the job they perform, but I also try to involve them as much as possible in decisions that will make us a better company. When employees feel ownership of the job or the project, they always perform better. Having them involved in the decision-making process from sales, ordering, scheduling and installation, makes the jobs run smoother and the employees happier.”

“Keeping your employees involved by asking for their input on products, ads, events and general day-to-day things can be a great benefit to your company by keeping employees engaged. Little things like buying them lunch or a staff dinner creates camaraderie between management and staff.”

“We try to be flexible with hours and schedules in regards to family time. If someone has a young family and it’s important to be home for dinner, we try to start their day earlier. If someone has to look after an elderly parent, we give them shorter days or certain days off. We try to work together so that everyone gets their work done, but also can deal with life’s other demands.”

“We are lucky in the fact that we have great employees who all get along with each other and work well together. We get comments all the time about this. A really high percentage of customers recommend us due to our employees. We pass this information along to the employees, which helps keep up their morale.”

Communications and Recognition Essential

“For us, the best approach is to make lists of what we expect of each employee. In weekly meetings we recognize employees who have met their goals. It’s just hard being a small family business to afford to compensate and keep up with prices online as well!”

“I have a weekly staff meeting where we review both good and could-be-better stuff. Some people respond best to compliments in front of their peers.”

“I keep employees in the loop so that they see why we need to change in order to grow. If they have an understanding of what things cost, they can come up with ideas to save the company money and have a feeling of really being part of the business.”

“You have to involve employees in factory-sponsored training and cross- train to ensure every employee can excel in each discipline.”

“Employees are your best advertising and referrals for business. You need to recognize their achievements and show them appreciation for their success; that is the tricky part – how to keep them interested and happy – we’re still working on it.”

“It’s essential to allow your employees to have input on the operation of the store and the areas in which they work. Specialty retailers need to provide employees with a sense of ownership of their jobs by keeping them involved in deciding schedules and roles.”

“Retaining employees isn’t always money based. Recognizing great work goes a long way. Flexibility with schedules, to an extent, is also huge. Emergencies happen with everyone, and how you deal with them is what makes the difference.”

“We work in my customers’ homes, so it’s important that my employees are friendly, honest and well trained. Often the last impression of my business is the employees as they finish a job. That is why I would never use third-party installers as I have no control over their relationships with my customers. My employees are rewarded with a paycheck, continued employment and occasional praise for their work. There’s nothing I like to hear that’s better than the customer tipped my installers at the end of the job.”

More Stories in this Issue

2017 Retail: Past & Future

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Hearth & Home interviewed 48 specialty retailers of hearth, patio and barbecue products throughout the U.S. to determine how well they fared in 2017. For some it was a great year, for some it was a bad year, and for most it was an acceptable year.

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HEARTH: A Good Year for Most

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PATIO: Not All Roses

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BARBECUE: A Generally Good Year

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The Carys of Wichita

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